The world is no stranger to a debt crisis. It’s been a feature of financial markets for decades – from Latin America in the 1980s to the Asian Financial Crisis in the late 1990s. Although emerging markets are more prone, the phenomenon has spread to developed markets. That used to be unfathomable. But starting with the Eurozone in the wake of the Global Financial Crisis (GFC), debt crises have become more frequent. What’s worse? It’s engulfing some G7 nations – the custodians of the world’s largest capital markets. In just the past few years, the U.K. faced a gilt crisis in 2022, and the French snap parliamentary election in 2024 sent bonds spiraling. Could Japan or even the United States be next? True doomsdayers would look at the accelerated depreciation of the Japanese yen toward 160 versus the U.S. dollar, the sell-off in Japanese Government Bonds (JGBs) and continued weakness in the greenback, and argue they’re early signs of a debt crisis. […