Here is the deal, the Japan is the largest holder of US debt (treasuries) by large margin over anyone country on earth. The promise being that the interest earned from economic investment into the US debt (interest rate) would guarantee positive economic intake. Japans Yen has recently experienced a rather strong devaluation over the last decade and is at a critical point where they need to do whatever they can to save the value of the yen. One of the biggest levers they have is to offload US treasuries and sell it back into the market to raise money to prop up the value of the yen. Not if, when this happens, this is going to send the value of the US debt down the shitter, and devalue the poo out of US debt. Nobody is going to want to exchange money for an asset that the largest holder in the world is offloading. This is very very bad for the US as the us will not be able to raise money to fund itself, because they rely on the sale of treasuries to fund its services.
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u/nebileyim_ben 9h ago edited 9h ago
its japans economic trap, worse than inflation.