Dennis Gartman: Forget EU, Bigger Debt Crisis Brewing Elsewhere

Debt concerns in Europe, Greece in particular - keep flaring-up to halt market rallies. But strategic investor Dennis Gartman is more worried about a sovereign debt crisis unfolding in Japan.

He says Toyko is much closer to catastrophe.

Gartman thesis is largely pegged to demographic trends in Japan’s population. "It isn’t growing," he says. In fact it’s declining with the median age increasing.

”There are more Depends being sold in Japan than diapers. That’s an old population,” he says with a smile.

But the fiscal implication is no joking matter.

”Japan's debt to GDP ratio is almost twice that of the United States,” Gartman explains. That hasn’t presented too much of an issue for the past few decades because a large percentage of Japan’s debt is owned by the Japanese people.

However, now there are fewer and fewer people. "Soon the bank of Japan will have to start buying debt. We have QE2, Japan will have QE infinity."

Although the argument has been made before, Gartman thinks it’s becoming particularly relevant because of the price action he’s spotted in the currency market.

Looking at the yen relative to other currencies, “relative to the US dollar, the Canadian dollar, the Aussie and the euro - we’re starting to see the yen weaken on all fronts,” he says.

”It’s time to be short yen relative to all other currencies.”

* You can find our entire conversation with Gartman about 9 minutes into this video

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Trader disclosure: On May 16, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova Owns (OXY); Terranova Owns (XOM); Terranova Owns (KSS); Terranova Owns (BJ); Terranova Owns (DIS); Terranova Owns (TM); Terranova Owns (MCD); Terranova Owns (PEP); Terranova Owns (PFE); Terranova Owns (BAX); Terranova Owns (V); Terranova Owns (JPM); Terranova Owns (VRTS); Finerman and Finerman's firm own (AAPL); Finerman and Finerman's firm own (BP); Finerman and Finerman's Firm own (CMI); Finerman's Firm owns (IBM); Finerman owns (C); FInerman owns (JPM); Finerman's Firm owns (JPM) leaps and (JPM); Finerman's Firm owns (TGT); Finerman owns (UNG); Finerman's Firm is short (IWM), (MDY), (SPY); FInermans firm is long S&P Puts, Russell 2000 Puts;Weiss owns (UUP); Weiss owns (NS); Weiss owns (ETP); Weiss owns (COP); Weiss owns (DVN); Weiss owns (BRCM); Weiss owns (MRK); Weiss owns (AKAM); Weiss owns (DE); Weiss owns (NAV); Weiss owns (JPM); Weiss owns (HBAN); Weiss owns (NIHD); Weiss owns (HK); Weiss owns (TWM); Weiss is short (X)

Dennis Gartman
Funds Managed by Dennis Gartman are short Yen
Funds Managed by Dennis Gartman own Asian Short term Government Bond fund
Funds Managed by Dennis Gartman own gold, copper, corn, crude oil, soybeans

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Accounts Managed By Brian Kelly Capital Own (TLT) Calls”
Accounts Managed By Brian Kelly Capital Are Long Australian Dollars
Accounts Managed By Brian Kelly Capital Own (AGO)
Accounts Managed By Brian Kelly Capital Own (EBAY)
Accounts Managed By Brian Kelly Capital Own (MCP) Calls
Accounts Managed By Brian Kelly Capital Own (BHP)
Accounts Managed By Brian Kelly Capital Are Short Yen

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Cantor Fitzgerald is a market maker in (RIMM)

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