Eli5: How can some country have trillions of dollar in debt like Japan but still functional without any consequences?
In: 101
By paying it on time, everytime and making sure that everyone is confident that it has the capacity to do so in the future…
As long as the markets have “faith” or confidence in the ability to repay, they will buy those bonds.
And if there’s nothing more “attractive” from a risk/reward pespective they’ll get cheap rates for it too…
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