The Boiling Point: Why 🇯🇵 Japan is the World’s Greatest Financial Experiment.

Japan’s debt to GDP is roughly 260%, the highest in the developed world.

If the 10 year yield were allowed to clear naturally:

Interest expense would explode

Tax revenue would be swallowed by debt service

Fiscal math would break very quickly

By capping the 10 year:

The government rolls massive debt at near zero real cost

Debt becomes functionally perpetual

Inflation erodes it slowly instead of default doing it instantly

Yield Curve Control is essentially soft default management.

But with the 10 year bond hitting 30 year highs, the market is finally forcing them to face reality and pay the piper.