US Treasury Secretary Timothy Geitner would do well to well to learn from his colleagues in Japan. This past summer the finance minister passed away under mysterious circumstances and his successor has recently quit and admitted himself to hospital, suffering from exhaustion.

Hedge fund manager Kyle Bass, who foresaw the US housing debt debacle and made millions from it, suspects that Japan's massive debt is the culprit. He told CNBC that he fears a Japanese sovereign default in the next several years. His comments are particularly alarming given Mr. Obama's recent statement that America needs to "spend its way out of the recession."

Said Bass, "I think the big canary in the coal mine is Japan. When you see how Japan lost 20 years of their prosperity from 1989 to today, you see what happens when a government steps in and runs giant deficits to make up for the private market place pulling back and attempting to de-lever."

The interview is a bit long, but well worth it.