Default Risk Formula

         Many wealthy countries hold debt that is more than their entire yearly GDP! Some very highly rated countries hold a large percentage of debt. In the case of a depression, countries may find it hard to meet the payments. Countries with large amounts of wealth can subsist for a long time. But if a country has large debt payments, low amounts of wealth, and a low GDP—they’re doomed. Throughout history investors ride bubbles and then bail out all at once. Countries like The United States can be a bubble if debt to GDP becomes too large.

        Countries with vast common wealth like Switzerland may be able to hold out longer than countries like the USA where common people have little wealth. Rating agencies like Moody’s and Fitch can give a country like USA a high credit rating, but when a depression sets in—debt will hurt each country differently. We saw in 2008 how Moody’s and Fitch were so inaccurate about their ratings for mortgage products. When a crises sets in, USA treasury bonds will be dramatic, and things will happen FAST! 2008 was a private sector problem. When the USD fails, it will be a government problem.

       I propose that USA treasury bonds currently do not show the correct “risk yield” or “default risk”. I say this because the risk is constant, but the realization or “spark” of a government debt catastrophe will be the real corrector in government debt yields. This shows that bond yield of the USA treasury do not adequately show the default risk. There needs to be a non-emotional and nonhuman indicator of some form of default risk indicator that is unbiased in a way that can show the REAL default risk!

        There needs to be a formula that tells of the likelihood of a government failing… Or measuring when a government will default. Also Known As, not being able to meet its debt payments. We are seeing this government debt crises now in Greece! If only there was some sort of indicator to predict that Greece would have these troubles. Looking back at how reckless the Greek government has spent its money, it is so obvious there were problems. Nobody cares until it hurts! I fully support bankruptcy, but politicians may never say yes to that! (Bankruptcy is superior to debt restructuring because the country has already tarnished its reputation, and debt is not good). Yet a formula to calculate this debt risk must be created. It must involved debt payments, private wealth in a country, and maybe GDP is a small factor of this equation.

Debt will squeeze a country to its knees and eventually kill it… Look at Venezuela.

Taiwan And Japan May Annex Each Other (Mergers and Acquisitions of these two countries)

       Taiwan is a country which is technically still at war with the Peoples Republic of China. The people of Taiwan are a small speck under the largest economy in the world--China. Taiwan is constantly under the threat of the People's Republic of China invading. Which would geographically not take very long. The PRC has the third most powerful military in the world and Taiwan is based on a small small island with the thirteenth most powerful military. Taiwan is not match for a super power. Of course, the USA may back Taiwan in the case of war. But USA cannot always be relied on for protection. Of course, USA has a military that currently far surpasses any other military in the world--but USA has shown less concern over Taiwan.
       I propose that Taiwan and Japan should unite over the fear of the PRC. It is a possibility that the PRC in the next few decades may surpass the USA in virtually everything. And the PRC will dominate Asia and show aggressive imperialistic behavior towards all nations in the eastern hemisphere. South Korea, Japan, the Philippines, Indonesia, Singapore, and even India are seriously threatened by the PRC powerhouse. Growth in China is still extremely fast and Taiwan is sure to be easily crushed and annexed into the PRC. Japan is threatened by the PRC and is one rank under the PRC in military strength-but heres the difference: Japan will become less powerful and China will increase in power. China is a threat to Japan. If Taiwan and Japan combined then their military may be a force to be reckoned with. Taiwan and Japan's military spending combined would be over $15 billion. China is currently spending just over $11 billion on defense. Taiwan is desperate for an ally and Japan may have it's own self interest in allying with Taiwan or even combining the two nations. Japan has the fourth largest economy in the world but has serious economic problems. Japan has a debt to GDP ratio of a unheard approximately 230%!!! Japan is a nation in trouble economically and on the decline. Japan's people are negatively effected by this huge debt and Japanese people understand that they need help. Taiwan would be a great fit! Taiwan is the world's 22nd largest economy. Taiwans yearly GDP (ppp) was $520 million compared to Japan's yearly GDP (ppp) of almost $5 trillion. Taiwan has a miniscule economy compared to Japan but Taiwan is heavily invests in their military compared to their GDP. It is extremely probable that Japan puts much less of their budget towards military. Japan is less threatened by the PRC than Taiwan. But Japan needs financial help and Taiwan needs security and protection from the Peoples Republic of China. Taiwan has debt of 38% of their GDP. Taiwan has extremely small debts and Japan would benefit in annexing Taiwan. The relationship would be mutually beneficial. Japan has a nation collapsing 230% of Debt to GDP and Taiwan has only 38% of debt to GDP. Taiwan is no poor country either. Taiwan has a HDI or standard of living of .883, while Japan has an HDI of .891. These countries are similar and Japan's massive debt can be repaid much faster by using Taiwans money that would have been sped on the military. Over the years Taiwan can significantly help reduce Japan's debt and surely Taiwan will benefit with the security of Japan. Taiwan will no longer have to spend an excess of their tax revenues on the military. Japan and Taiwan combined are big enough to resist the colossal PRC. Japan and Taiwan also have a similar GDP per capita of about $37,000. This relationship and annexing Taiwan to Japan cannot wait, war can overtake Taiwan at any day. I am confident that the Japanese and Taiwan people will support this idea and over the years will embrace this relationship. These island countries are extremely close to each other, already have good feelings towards each other--and are only 600 km away from each other. Their militaries will compliment each other perfectly as if they were always combined and their economies are similar and different in such a way that there will be an ideal chemistry. If this happens then Japan will have increased power in southeast Asia. The democratic world will prevail. And other threatened countries and territories of the PRC will know who to turn to for help. Japan is a staunch American ally as well as Taiwan. They both embrace democracy. Together they can stabilize Southeast Asia as the PRC gains reach in it's influence.

Taiwans debt $770 billion
Japan's debt $9 trillion

*The Taiwan people may be willing to sacrifice for this security & the timing is perfect for this to happen.
*An alliance will not be enough for Taiwan to reduce military spending and a unification of the two countries will be the only answer for the fullest security.

All this may sound nice and great one might wonder, but what if democratic nations like Japan, South Korea, Singapore, Malaysia, Thailand, and Taiwan all formed an alliance to protect themselves against The Peoples Republic of China??? The answer is that nobody wants to be in an alliance with Taiwan because Taiwan is the most likely country to be attacked by a full scale amphibian war from the confronting PRC. No country wants to be pulled into a war over Taiwan. When a war happens... Will the USA help another democratic nation?? Who will come to save Taiwan? A prosperous island Mandarin speaking country that was temporarily ruled by the Japanese. Taiwanese appreciated the technology that the Japanese brought to the island while the Japanese controlled the island. Japan and Taiwan unification are the answer to this situation. If another proposition could be brought up to save Taiwan from the PRC, I would love to discuss it.
Even a "European Union" of the nations in South East Asia may be a probable solution.

THE ONLY PROBLEMS I FORESEE IN JAPAN ANNEXING TAIWAN IS THAT JAPANESE DO NOT LIKE TO GRANT CITIZENSHIP TO FOREIGNERS AND THAT JAPANESE/TAIWANESE BUSINESS RELATIONS WITH THE PEOPLES REPUBLIC OF CHINA COULD BE DESTROYED OVER NIGHT. THE PEOPLES REPUBLIC OF CHINA CLEARLY HAS THE UPPER HAND IN THIS RELATIONSHIP. MAYBE A MILITARY DEFENSE ALLIANCE AGAINST CHINA IS THE MOST PREDICTABLE COURSE OF ACTION IN THE FUTURE.

...or we could just give taiwan nuclear weapons... but that could lead to unpredictable results. hey Iran almost has them--why not Taiwan.