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And currently, Japan is paying for it in terms of inflation.

And currently, Japan is paying for it in terms of inflation.

The government raised rates to tackle inflation. I'll pull up the inflation chart. Japan's inflation hit a 40-year high, and this just shot up in the last 18 months. Inflation is running at close to 4% a year.

The government raised rates to tackle inflation. I'll pull up the inflation chart. Japan's inflation hit a 40-year high, and this just shot up in the last 18 months. Inflation is running at close to 4% a year.

Well, their central bank has to buy most of the debt and their central bank sets the rates. So they have a large amount, 53% of their public debt is held by their central bank.

Well, their central bank has to buy most of the debt and their central bank sets the rates. So they have a large amount, 53% of their public debt is held by their central bank.

Well, yeah, while rates are low, you see this, you know, particularly in a market like we're facing today where there's global inflation, they need to raise rates in order to reduce inflation. The problem with raising rates is this, you know, this currency problem.

Well, yeah, while rates are low, you see this, you know, particularly in a market like we're facing today where there's global inflation, they need to raise rates in order to reduce inflation. The problem with raising rates is this, you know, this currency problem.

It's just arithmetic. You're going to pay for it with either economic contraction, higher taxes, or inflation. Those are the three places it goes. Yeah. And they did test it. They've stress tested now. Yeah.

It's just arithmetic. You're going to pay for it with either economic contraction, higher taxes, or inflation. Those are the three places it goes. Yeah. And they did test it. They've stress tested now. Yeah.

Yeah, that's exactly right. And then their federal spending gets compressed because now they have to service that debt. Again, they're already spending 25% of their federal budget on servicing existing debt with the low interest rates. And they've got to support an aging population.

Yeah, that's exactly right. And then their federal spending gets compressed because now they have to service that debt. Again, they're already spending 25% of their federal budget on servicing existing debt with the low interest rates. And they've got to support an aging population.

We're about a trillion a year with a proposed 7.3 trillion budget. So we're at 13.6%. And Japan is at 25%. Over the next 10 years, isn't our debt service supposed to rise to... Yeah, as all of the low interest bonds mature, and we issue new debt at a higher interest rate, our debt service cost is going to continue to climb.

We're about a trillion a year with a proposed 7.3 trillion budget. So we're at 13.6%. And Japan is at 25%. Over the next 10 years, isn't our debt service supposed to rise to... Yeah, as all of the low interest bonds mature, and we issue new debt at a higher interest rate, our debt service cost is going to continue to climb.

It's already higher than discretionary military spending at over a trillion a year.

It's already higher than discretionary military spending at over a trillion a year.

I think it shows how much leverage there is in this. Totally. That's what it is. It's all about leverage.

I think it shows how much leverage there is in this. Totally. That's what it is. It's all about leverage.

Leverage on leverage on leverage.

Leverage on leverage on leverage.