I asked several question of Grok concerning the Japanese debt crisis. I would not be surprised if most people are unaware of this issue or its impact on the global economy. If Japan does sell its USTs, there are three scenarios based on the amount of their sale: small, medium and large. The impact of a large sell-off could destroy the US dollar. The analysis by Grok below was in response to my question concerning the impact on the price of gold.
Conclusion
A medium Japanese sell-off of USTs ($300–500 billion) would likely have a bullish impact on gold in the medium term (1–6 months). Starting from $3,300 per troy ounce on May 21, 2025, gold could rise to $3,600–$3,700 by June–November 2025, a 9–12% increase. This is driven by safe-haven demand, a weaker dollar (after initial strength), inflation expectations, and increased central bank/investor buying, despite temporary pressures from higher UST yields.
