Not many things keep me awake at night, but recent developments in Asia are a cause for concern. The increasingly destabilising policies being implemented by Japan have the potential to ignite a global financial conflagration with consequences even more severe than the recent crisis. 能让 我夜不能寐的事情不多，但亚洲近期的局势发展让我忧心忡忡。日本当前实施的政策日益带来不稳定因素，有可能点燃全球“金融大火”，后果可能比最近的这次金融危机更加严重。

Japanese authorities have embarked on a precarious policy of depreciating the yen, raising domestic inflation to 2 per cent, and running larger fiscal deficits in an attempt to end decades of chronic stagnation. This policy cocktail, designed to increase domestic spending while improving export competitiveness, threatens to rekindle uncertainty and upheaval across the globe. 日本政府采取了一种危险的政策，让日元贬值，把国内通胀率提高到2%，并扩大财政赤字，以期结束数十年的经济停滞。这套政策组合拳旨在增加国内开支，同时提高出口竞争力，却可能在全球再次引发不稳定和动荡。

Rising domestic inflation would result in negative real returns for Japanese government bonds, while the depreciation of the yen would further discourage foreign investment. This could lead to capital outflows as global investors seek to escape the certainty of negative real returns on yen-denominated assets. Even Japanese equities would fail to attract hard currency investment as investors would hedge their yen exposure. 国内通胀上升将导致日本政府债券的实际回报率变为负值，而日元贬值则将进一步抑制外来投资。这将导致资本外流，因为全球投资者将寻求逃离日元计价资产毫无疑问的负实际回报率。即便是日本股票都将难以吸引硬通货投资，因为投资者将对冲日元敞口。

None of those factors would have been a problem 10 years ago, when Japan amassed large annual increases in domestic savings. But since then, the ratio of retirees to the working age population has increased and Japan no longer generates enough domestic savings to finance the deficits proposed by Prime Minister Shinzo Abe. Within the next few years, Japan’s domestic savings will likely turn negative due to dis-saving caused by the country’s ageing population. 放在10年前，这些因素都不成问题，当时日本国内储蓄每年都大幅增长。但自此以后，退休人员与劳动年龄人口的比例一直在提高，日本无法继续产生足够的国内储蓄来为首相安倍晋三(Shinzo Abe)提议的赤字提供资金。接下来几年内，由于老龄化的人口动用储蓄金，日本国内储蓄将很可能转为负值。

So who will finance Mr Abe’s fiscal stimulus programme? 那么谁将为安倍的财政刺激方案提供资金？

With a 2 per cent inflation target and the need to expand the money supply, the Bank of Japan will be a willing buyer, at least for a while. As the BoJ reaches its inflation target, monetary policy will need to be normalised. This would reduce or eliminate central bank purchases of JGBs. As the BoJ steps aside, interest rates would begin to rise in order to attract private sector capital. 鉴于通胀目标设为2%，加上有必要扩大货币供应量，日本央行(BoJ)将成为情愿的买家——至少一段时间内如此。一旦日本央行达到了通胀目标，货币政策将需要正常化。央行将减少、甚至结束购买日本政府债券。随着日本央行放手，利率将开始提高，以吸引私人部门资本。

The current size of Japan’s public debt is approximately 230 per cent of gross domestic product, with total interest expense on JGBs representing about 40 per cent of government receipts. Were interest rates to rise by 300 basis points over the next five years, which is in line with Mr Abe’s stated objective of raising inflation to 2 per cent, interest expense would expand to about 80 per cent of present total government revenues, with the prospect that this ratio could continue to rise. 目前日本公共债务大约是国内生产总值(GDP)的230%，日本政府债券的利息总支出约为日本政府财政收入的40%。如果未来5年利率提高300个基点（这与安倍宣称的将通胀率提高到2%的目标相符），利息支出与政府收入之比将扩大到80%左右，未来这一比例可能还将继续上升。

What does this mean for the rest of the world? With the BoJ out of the market, and no incremental domestic savings, Japan will be dependent on foreign capital to finance its shortfall. Without that infusion of capital, interest rates could continue to rise, thus increasing deficits and exacerbating the nation’s fiscal crisis. Japan would then find itself in the dubious position of having to restructure its debt or continue to run the printing press to buy more bonds, driving inflation higher and devaluing the yen. These grim policy options would destabilise not just the Asian region, but the global economy. 这对世界其他国家意味着什么？随着日本央行退出市场，国内储蓄不见增加，日本将依赖外国资本来弥补资金缺口。如果没有资金注入，利率可能持续上升，从而导致赤字增长，日本的财政危机将恶化。届时日本将发现自己陷入左右为难的境地：要么重组债务，要么继续印钞购买更多债券，推动通胀水平上升，日元贬值。这种冷酷的政策选择不仅将给亚洲地区带来不稳定，还可能引发全球经济动荡。

The probability of this catastrophic series of events may appear remote, but the severity of their potential consequences demands attention. This global margin call on Japan would lead to a protracted period of capital flight. 发生这种灾难性系列事件的可能性或许很小，但其潜在后果的严重性值得注意。全球对日本发出的“追加保证金通知”将导致长期资本外逃。

Investors then would focus on others vulnerable to similar risk factors as Japan; specifically, nations or regions unable to finance national deficits with domestic savings or foreign capital and are dependent on the central bank to purchase bonds. Disturbingly, the leading candidates to follow Japan into the crosshairs include the US, UK and western Europe. Just as contagion spread across the countries of Europe in 2008, contagion from Japan could easily spread from Asia to other regions. 届时，投资者将关注其他容易受到类似风险因素冲击的国家，尤其是无法用国内储蓄或者外国资本为本国赤字融资、依赖央行购买债券的国家或地区。令人不安的是，可能步日本后尘的领先候选国包括美国、英国和西欧等。正如2008年的危机扩散到欧洲诸国一样，日本一旦出现危机，灾难将轻易地散播到亚洲及其他地区。

History suggests that the long-term monetisation of public debt by central banks is a formula for hyperinflation. Price increases that result from the rapid expansion of the money supply can cause an insidious cycle that requires the creation of ever-larger amounts of new money to fund government activities. 历史表明，央行对公共债务的长期货币化往往会引发恶性通胀。货币供应量快速增加会引发物价上涨，进而导致恶性循环，要求创造数额更加庞大的新货币来为政府活动提供资金。

This can also lead to a crisis of confidence due to the erosion of faith in a nation’s currency as a store of future value. 由于对一国货币作为未来价值贮藏手段的信心遭侵蚀，这还可能引发信心危机。

The world’s third-largest economy may be setting the stage for a global inflationary spiral, perhaps beyond anything previously experienced. 日本这个世界第三大经济体可能正在为一场全球性的通胀螺旋创造条件，这次经历或许闻所未闻，见所未见。

As Japan seeks to deal with the longer-term consequences of its current policy, it could easily slide down the slippery slope that leads to hyperinflation. Troublingly, the rest of the industrialised world is at risk of going down with it. 随着日本寻求解决其货币政策导致的长期后果，该国可能轻易顺着滑溜溜的斜坡跌下去，陷入恶性通胀。不幸的是，其他工业化国家也存在随之跌落的风险。