“The World is Becoming Japanese” By: Severin, Shao, Setola, Shah, Seelam Group F Section C

Japanification “The world is becoming Japanese” refers to the prevalence of Japanification in other countries Japanification→ current state of Japan w/ low growth, inflation, and ineffective monetary policy result in a rise of negative yield debt. Buy bonds → Bond prices ^ → yields become negative→ investors lose

U.S Japanification Indicators of US Japanification: Low inflation rates FED cutting interest rates to support growth Still-elevated stock prices

U.S. Japanification Bond yields predicted to stay lower for much longer Only beneficial for borrowers Long-term investors suffer

Japanification of Europe Ireland, Portugal, and Spain started to produce negative yields because of borrowing at great costs Germany sold a 30-year bond at a negative rate for the first time. The UK pension deficit rose from £2 billion to £51 billion for FTSE 350 companies in July

$17 trillion worth of bonds trading with sub-zero yields

$7.3 T Japan $2.3 T France Germany 890.6 B Spain

“The US bond market is no longer the best house in a bad neighbourhood: it is pretty much the only house still standing.” -The Financial Times