There are three big reasons why the crisis in Japan’s public finances will eventually come to a head. The first concerns government bonds. The state has for years relied on domestic savers to buy them. But as Japan’s people age and run down their savings, they will have less money to invest in government bonds. An IMF paper calculates that even if the savings rate remains close to where it is now, gross debt may exceed gross household assets by 2015. Japan might then have to rely on foreigners to finance its debt, and they will want much higher returns. That will, at the very least, provide an acute reality check. Goldman Sachs says some foreign investors are already positioning themselves for a “meltdown”.