Peter Schiff Raises Concerns Over Japan's Growing National Debt Crisis: 'Slow Motion Train Wreck'

Japan’s massive national debt and increasing interest rates are causing serious economic distress, a situation Peter Schiff refers to as a “slow-motion train wreck.”

What Happened: Schiff expressed his opinions during his podcast “The Peter Schiff Show” where he said that Japan’s situation is worrisome, SchiffGold reported. The country’s national debt, which is around $9 trillion, is over 200% of the country's GDP.

As the Japanese yen continues to fall against the dollar, reaching its lowest in over two decades, economic pressure is mounting.

The Japanese central bank's ongoing money creation program, implemented to support the bond market, is causing the yen to tank. This is causing additional strain on an economy already burdened by debt.

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“It becomes a self-perpetuating spiral because the more bonds the Bank of Japan buys to keep rates from going up, the more upward pressure is on rates because they have to create inflation and drive down the value of the yen in order to prop up the price of these bonds and keep the interest expense artificially low for the government,” he remarked.

Interest payments on the national debt account for approximately a quarter of Japan’s government expenditures. If bond yields increase to 4%, the debt payment would exceed the current total government expenditure, warns Schiff.

The Bank of Japan, which currently owns about 45% of the country's outstanding debt, is in a predicament.

Worryingly, Schiff draws parallels between the situations in Japan and the U.S., indicating that the latter is on the brink of a similar crisis. He suggests that America’s national debt, like Japan’s, is a ticking time bomb.

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