made him a welcome presence last month in Tokyo. A recent move to increase the stakes held by Berkshire Hathaway in five general trading companies has been hailed as a vote of confidence in the country’s long-ailing corporate sector.
It is not easy to supply a more informative description of Japan’s trading companies. Each is a globe-spanning corporate empire of baffling diversity, encompassing such disparate activities as apparel design, convenience store retailing and construction. It is surely not Buffett’s intent to bet against the yen. And using borrowed money to buy stock in companies with significant foreign earnings is not, of course, the most practical way to do this. Set that misgiving aside, if only for a thought experiment, and you can see how a trade like Buffett’s might in theory look attractive to a very different kind of investor.
Throughout that time, he writes, “seismic shifts always took the form of too-large debts that couldn’t be paid with real money so there was a lot of printing of money". That, in turn, “led to big debt restructurings via writing down and monetising debt”.Such prospects seem remote in Japan, which has navigated the highest ratio of public debt to gross domestic product in the G7, enduring a stagnant economy but no serious upheaval.