In Japan, a near-term disruption in the government bond market remains unlikely as a result of stable domestic savings rates and healthy current account surplus. More importantly, Japan has one of the lowest concentrations of foreign sources funding (refer to the chart above) while Greece, Belgium, Portugal, Austria, Italy, Ireland, France and Netherlands have high exposure towards foreign funding.

Total Reserves less Gold-to-GDP

The nations covered in our Pan-European Sovereign Debt Crisis series also have significantly less reserves to serve as a cushion against shocks. Greece, U.S, Ireland, Portugal, Spain, Luxemburg and EU region at its entirety, all have total reserves excluding Gold below 2.5% of GDP compared with 39% for Asia and 31% for Emerging markets, and 15% against the world average.

With instability cropping up in the Middle East, there is just another reason to speculate as to when the charade in Europe will be exposed. We have our ideas who will be first. Reference First Tunisia, Then Egypt, Now Yemen: Will This Reach The Powder Keg That Is The EU & What Will Happen If It Does? and Tracing The Path Of Egypt’s Disruption Sending Contagion To The Stronger Countries Of Europe and Egypt’s Social Unrest As A Pan-European Economic and Financial Contagion? It Can Happen!!!.