NEW YORK ( TheStreet) -- Working overseas and doing research on countries, I have always noticed striking differences and what explains them. Here, I look at four countries: China, Greece, Japan, and the U.S.I chose these four for specific reasons: The U.S. is the aging empire. In the '70s, it was thought Japan would be next, but China is now is expected to succeed the U.S. I selected Greece because it has been in the news recently, along with other reasons. Let's start by looking at a few common yardsticks for economic well-being.
But let's look a bit more closely at Japan. Who buys all its debt? Unlike the U.S. and European investors who put approximately 40% of their assets in the stock market, Japanese investors put only 10% in equities. Why? Because the Japanese stock market has not performed well. For the 20 years ending at the beginning of 2008, the Nikkei 225 has fallen 28%. Over the same period, the S&P 500 increased by 476%. So the Japanese put their money in banks. And Japanese banks invest 75% of their money in government debt. And so the debt gets financed, even though the debt is enormous. Meanwhile the U.S., the aging empire, has high government deficits and debt plus a current account deficit and a $3 trillion balance sheet deficit. But apparently the world likes to hold U.S. debt, both dollars and government securities. Will this continue? Probably for a while.