Japan’s Debt Bomb Is About To Explode And Hit The US

The Japanese Economy and Yen Are Facing a Decline — Will They Ever Recover? 🇯🇵📉

Japan’s economy is flashing warning signs that investors can’t ignore. Bond yields are hitting levels not seen since 1999. Government debt has exploded past $10 trillion. And the Japanese yen has collapsed to multi-decade lows against the US dollar. Japan once looked unstoppable in the 1980s. Today, it’s a case study in debt, demographics, and the limits of monetary policy. Understanding what went wrong could help you avoid the same mistakes.

Japan isn’t just a local story. It holds over $1 trillion in US Treasury bonds, meaning trouble in Japan could:
❌ Push US interest rates higher
❌ Impact stock valuations and mortgages
❌ Create ripple effects across global debt markets
❌ Present unique investment opportunities due to a weak yen

Japan’s struggles are also a warning sign for other aging economies like China, South Korea, and Europe.

In this video, I break down exactly why Japan is facing its biggest economic test in decades, what’s driving the yen crisis, and whether recovery is even possible — or if Japan is entering a long, managed decline.

TIMESTAMPS
00:00 Introduction
01:01 Japan’s Economic Problems Are Old News?
01:43 The Debt Mountain – Japan’s $10 Trillion Problem
03:00 The Yen Collapse
04:45 Inflation Finally Arrives
06:57 Quantitative Easing
08:44 Mainland China Tourism Decline
11:01 Demographic Time Bomb – Japan’s Population Crisis
12:42 Will Japan Ever Recover?
15:10 How Does Japan’s Economy Impact Your Money?

⭐️ DOWNLOAD MY PERSONAL FINANCE TRACKER
https://www.alicecee.com/personalfinancetracker

RELATED VIDEOS
🔵 If I Were To Start Investing In 2026, I’d Do This – https://youtu.be/_6FlZ74rRjY
🔵 Silver Prices Are Going Crazy – https://youtu.be/v8Csg71G8Z0
🔵 Average Net Worth By Age – https://youtu.be/mh6E4l76j4o

WHERE YOU CAN FIND ME
🟢 SUBSCRIBE TO MY PODCAST – https://open.spotify.com/show/6VCEJZeJmLKQ9fjudIXvlP
🟢 INSTAGRAM – https://www.instagram.com/alicecee_/
🟢 THREADS- https://www.threads.com/@alicecee_
🟢 TWITTER – https://x.com/TheAliceCee
🟢 LINKEDIN – https://www.linkedin.com/in/alicecee/

@nows1567 on 2026-01-27 05:40

Japan is interesting cos they went all in on modern easy money policies before the US and the euro zone did.

Why they did that was officially to stop the prices from falling, to stave off inflation that is. And lower prices as we all know is seen by many modern, big gov't friendly economists as "very bad", so Japan started to issue new debt like crazy, basically spent it on the military and entitlements and had its CB buy half of it, while most of their other banks more or less had to buy the rest. Lots of new yen were created and had it been done like that in the US with similar debt to GDP ratios, it would've been a run on the dollar.

Not in Japan though since they regularly have sent their cars and other industrial goods abroad, recently mostly to Asian neighbors and the US, which foreigners have paid for, in theory by buying yen for their currencies and then paying for the card, etc., with the yen. All that foreign currency could then be invested in say US treasuries and all the new yen was covered by the industrial goods produced.

So despite flowing the markets with yen, inflation didn't happen and to borrow and spend on items like the military and entitlements with basically no returns became a habit, essentially financed by its civilian manufacturing output.

Now, in recent years, Chinese cars among other industrial goods have started to replace some of the Japanese, mostly in Asian markets, the US is stil faithful to the Japanese and have tarriffed Chinese cars away from its borders,despite its lower costs. Japan still feels it though, when its exports are being replaced to some degree by the Chinese's and all the money the BoJ regularly prints to buy the gov't debt doesn't get its real value from all that much export no more, instead inflation is finally showing.

The problem now is that you have borrowed and spent so much on the military and the entitlement systems basically with negative ROIs and the positive ROI from the civilian manufacturing isn't enough to cover for it anymore, you still have the costs though, the huge military is there as are the entitlement systems. They're really starting to cost now though, since you can't borrow for free anymore and, on top of that, you have the old debt, not invested in anything that pays off, just a lingering debt that costs more everytime the interest rates go up. Japan is basically in similar predicaments as the UK or Sweden were in the 1970s, when Japanese exports hit their civilian industries at the core and their gov't spending had been used on their military and entitlement systems.

In those days the yen was good as gold and japanese tourists became like a phenomenon in the West with their pockets full of yen and lots of cameras on their shoulders.

27 Comments

@AliceCeeCPA on 2026-01-27 04:04

⭐ DOWNLOAD MY PERSONAL FINANCE TRACKER
https://www.alicecee.com/personalfinancetracker
@somerandomguyfromtheintern480 on 2026-01-27 05:13

Man, 5 years of this yen trade shit. Had to gave popped sometime.
@chubbyface74 on 2026-01-27 05:14

Most western news or influencers will say their tourism is not affected…at least u are telling a separate story
@mikefernandes3959 on 2026-01-27 05:15

Japan needs to teach their kids forn a young age that they need to have kids as a duty to their country that gave them everything
@pratikjadhav5233 on 2026-01-27 05:17

India is the fourth largest economy rn not japan
@JC-kv1vn on 2026-01-27 05:17

I would discourage Japan from ever offering citizenship to non-citizens. Instead, Japan should hire the best and brightest scientists and engineers from outside of Japan to team up with native Japanese genius talent. Keep Japan as Japan, and get a grip on debt and finances. The USA also needs to get a grip on debt and finances.
@ianeagle40nil on 2026-01-27 05:20

Just need immigration.
@arisaga822 on 2026-01-27 05:20

And of course there is absolutely no chance in hell that pension reforms would be on the cards – gotta look after that demographic. Meanwhile the social contract is completely torn to shreds for the younger workers. Noice.
@Isaiah-ry7rg on 2026-01-27 05:26

Japan should have developed they own system instead of westernizeng .
@evianbidet3553 on 2026-01-27 05:27

OK…I’m too dumb for this…
@Unknownsone on 2026-01-27 05:27

Japan made a huge mistake following Americas lead.
@ruben9282 on 2026-01-27 05:29

As of late 2025, Japan became the 5th largest economy by GDP. India took the spot of 4th place.
@bloviax on 2026-01-27 05:30

Pls stop the flashing wipe!
@dannyuber9154 on 2026-01-27 05:31

why isnt anyone asking why is BOJ selling existing samurai bonds and not the US bonds to liquidate the needed cash liquidity?
@alm7979 on 2026-01-27 05:33

Your analysis of JPY doesn't make sense. Japanese Central Bank was always printing money, but JPY was strong.
@jackboagard1461 on 2026-01-27 05:33

The good ol USofA is a close second to Japan debt.
@whitemoon5752 on 2026-01-27 05:33

China is following exactly the same pattern. Deflation for the last three years, property collapses, huge savings but consumption low, interest rate at all time low, demographic seismic change because of one child policy disaster. It’s Japanificatuon happening real time in China.
@TommoC123 on 2026-01-27 05:35

Japan and xrp 🤞
@curtissharris8914 on 2026-01-27 05:35

How about paying folks a lot of $$ to have kids. It will take some time but its doable.
@sponge-bob-square on 2026-01-27 05:37

JAPAN WILL EXPLODE ALONE USA WON'T SAVE A DYING SHIP
@lagrangewei on 2026-01-27 05:37

Japanese decline is due to speculator. this has been known for 2 year, you cannot run a negative interest rate regime and not expect people from other country to start abusing it.
@DanielMalloy-q4g3n on 2026-01-27 05:39

Time to vacation in Japan
@MrJakeSupportcenter on 2026-01-27 05:39

"heaven helps those Who help themselves” get your digital assets to a decentralized cold wallet connected to web 3, to avoid being hacked or stolen by the government, save your assets 🙏
They won’t tell you this
@r_ds8057 on 2026-01-27 05:39

Same one linerepeated a hundred times.
TLDR: after decades of low interest rates, Japans interest rate rising and that is going to increase debt servicing lot higher because jJapan has high devt .
@1painter4hire on 2026-01-27 05:40

In short, A War is coming…
@nows1567 on 2026-01-27 05:40

Japan is interesting cos they went all in on modern easy money policies before the US and the euro zone did.

Why they did that was officially to stop the prices from falling, to stave off inflation that is. And lower prices as we all know is seen by many modern, big gov't friendly economists as "very bad", so Japan started to issue new debt like crazy, basically spent it on the military and entitlements and had its CB buy half of it, while most of their other banks more or less had to buy the rest. Lots of new yen were created and had it been done like that in the US with similar debt to GDP ratios, it would've been a run on the dollar.

Not in Japan though since they regularly have sent their cars and other industrial goods abroad, recently mostly to Asian neighbors and the US, which foreigners have paid for, in theory by buying yen for their currencies and then paying for the card, etc., with the yen. All that foreign currency could then be invested in say US treasuries and all the new yen was covered by the industrial goods produced.

So despite flowing the markets with yen, inflation didn't happen and to borrow and spend on items like the military and entitlements with basically no returns became a habit, essentially financed by its civilian manufacturing output.

Now, in recent years, Chinese cars among other industrial goods have started to replace some of the Japanese, mostly in Asian markets, the US is stil faithful to the Japanese and have tarriffed Chinese cars away from its borders,despite its lower costs. Japan still feels it though, when its exports are being replaced to some degree by the Chinese's and all the money the BoJ regularly prints to buy the gov't debt doesn't get its real value from all that much export no more, instead inflation is finally showing.

The problem now is that you have borrowed and spent so much on the military and the entitlement systems basically with negative ROIs and the positive ROI from the civilian manufacturing isn't enough to cover for it anymore, you still have the costs though, the huge military is there as are the entitlement systems. They're really starting to cost now though, since you can't borrow for free anymore and, on top of that, you have the old debt, not invested in anything that pays off, just a lingering debt that costs more everytime the interest rates go up. Japan is basically in similar predicaments as the UK or Sweden were in the 1970s, when Japanese exports hit their civilian industries at the core and their gov't spending had been used on their military and entitlement systems.

In those days the yen was good as gold and japanese tourists became like a phenomenon in the West with their pockets full of yen and lots of cameras on their shoulders.
@stephaniebartsch4807 on 2026-01-27 05:43

Sanae Takaichi is the Prime Minister of Japan……Get it right!