ALL THINGS BIG AND SMALL 2.0

  Part 2: Why is Singapore able to sustain a Debt/GDP Ratio of 177%% without economic collapse or significant devaluation of the Singapore Dollar? Table 1:  Table 2: Singapore's Balance Sheet In Singapore’s case, what looks like a towering gross-debt ratio of 177% is really the liability leg of a much larger sovereign wealth portfolio . Because the assets are liquid, diversified and earn returns, and because constitutional rules forbid using borrowed money for current spending, markets treat Singapore’s “debt” more like sovereign investment units than true financing of deficits. Add a structural current-account surplus and large FX reserves, and there is little reason for bond or currency panic. 1 Borrowing is only for investment, not spending Under the Government Securities Act (GSA) and the Constitution, most bonds are issued to meet CPF demand or build a risk-free curve; proceeds are transferred to MAS and GIC for investment . mof.gov.sg mof.gov.sg ...

 Part 1: Why is Japan able to sustain a Debt/GDP Ratio of 260% without economic collapse or significant devaluation of the Yen? The reasons for Japan’s ability to sustain a Debt-to-GDP ratio of around 260% without triggering an economic collapse or a significant devaluation of the Japanese Yen (JPY) are complex but also instructive.  It illustrates why a country’s Debt/GDP Ratio may not be a reliable indicator of its economic health.  Below is a structured and concise explanation with supporting statistics. 1. Domestic Ownership of Government Debt Over 90% of Japan’s government debt is held domestically, mainly by: Bank of Japan (BoJ) – holding ~ 53% of all JGBs as of 2024. Japanese banks, insurance companies, and pension funds . Implication: Japan is less exposed to foreign capital flight or speculative attacks on its debt or currency, unlike emerging economies. 2. Monetary Sovereignty Japan issues debt...