19-05-2025
Japan reveals the sun is setting on old world debt economics
What is the most important price in the world economy right now? The price of gold, of oil, of rice, of the US dollar? Each can make a righteous claim to that venerable title. But arguably the one that matters most right now is the price of Japanese debt.
That price, for IOUs issued in the world's third largest economy, has huge implications well beyond its shores. For decades low interest rates in Japan, subdued inflation and huge volumes of public debt — now approaching $9 trillion — meant Japan was a siphon of capital for other nations. Japan's ability to do this alongside running up huge debt levels — worth more than 2.5 times the size of its own economy — without collapsing the
