quote: The real problem of the japanese bond market is that it's so big. They already use 50% of their tax revenues to service the debt, compared to the US's ~10%. If the interest rate on the 10 year hits 2%, they'll use 100% of tax revenue to service the debt and it's game over. The 10 year recently hit 1%.
quote: First everybody will panic so everybody will pile into the US dollar.
quote: Yes, inflation decreases real value of debt. It's actually a very common tactics every first world country, including US, to pay debt. We really depend on inflation or our economy will tank. I'm talking about a slow 2-3% inflation annually, not 30%.