Japan, long considered an economic anomaly capable of defying debt logic, is finally cracking. With a staggering debt-to-GDP ratio of 230% and a new administration launching a controversial $135 billion stimulus package, the era of stability is over. Bond yields are spiking to levels not seen since 1997, and the Yen is behaving like a volatile emerging market currency rather than a safe haven. But the real danger lies in the global ripple effect. As the largest holder of US debt, Japan’s financial instability poses a direct threat to the American economy and the global financial system. We break down the connection between Tokyo’s fiscal recklessness, the return of inflation, and the impending sovereign debt crisis facing the US, China, and Europe. This is the end of financial exceptionalism.
Credit to : Andrew Mitrich