Japan Just CRASHED The US Market!

Mark Moss
6 Aug 202424:36

Summary

TLDRLe script explore la confrontation entre la Banque du Japon et la Réserve Fédérale américaine, qui a provoqué un bouleversement des marchés financiers mondiaux. Il analyse la décision risquée du Japon de hausser les taux d'intérêt, un défi à la dominance de la Fed et son impact sur l'économie mondiale. Le texte examine également les stratégies cachées des traders internationaux et les implications pour l'avenir financier des investisseurs, dans un monde de plus en plus financiarisé.

Takeaways

  • 🌐 La Banque du Japon et la Réserve Fédérale sont en conflit, ce qui a un impact significatif sur les marchés financiers mondiaux.
  • 📈 L'Bank of Japan a élevé ses taux d'intérêt en défiant l'autorité de la Réserve Fédérale, ce qui a provoqué un chaos sur les marchés.
  • 🗼 Le Japon a été dans une situation de stagnation économique pendant plusieurs décennies, avec des taux d'intérêt négatifs pendant longtemps.
  • 💹 L'élévation des taux d'intérêt par la Banque du Japon a été un geste désespéré pour tenter de renforcer la valeur du yen face à la dominance du dollar américain.
  • 🌪️ L'augmentation des taux d'intérêt a déclenché un mouvement de devise abrupt, avec le yen japonais grimpant de 15% contre le dollar américain.
  • 💸 Le 'carry trade' a été mis en place en raison de la politique monétaire accommodante du Japon, où des investisseurs empruntaient à faible taux pour investir dans des actifs à rendements plus élevés à l'étranger.
  • 📉 L'augmentation des taux d'intérêt aux États-Unis a rendu le dollar plus fort, plongeant ainsi le yen et perturbant le carry trade.
  • 🏦 La situation actuelle a mis en lumière l'impossible trilemma économique que connaissent tous les pays avec une banque centrale, qui doit choisir entre un certain nombre de politiques économiques incompatibles.
  • 📊 L'intervention du gouvernement japonais pour soutenir le yen a été insuffisante, et les courtiers continuent de mettre des pressions sur la valeur de la monnaie.
  • 💣 L'augmentation des taux d'intérêt par la Banque du Japon, même de seulement 0,25%, a eu un impact considérable sur les marchés, démontrant la vulnérabilité des investissements à la marge.
  • 🌐 Les décisions de politique monétaire du Japon et de la Réserve Fédérale ont des répercussions mondiales et peuvent conduire à un choix entre une crise monétaire ou une crise de l'inflation.

Q & A

  • Quel est le conflit central abordé dans le script ?

    -Le conflit central est la bataille entre la Banque du Japon et la Réserve Fédérale des États-Unis, qui a provoqué des chocs sur les marchés mondiaux et pourrait changer la dynamique de la puissance financière mondiale.

  • Pourquoi la décision de la Banque du Japon de hausser les taux d'intérêt est-elle considérée comme audacieuse ?

    -C'est audacieux car cela représente un défi direct à la dominance de la Réserve Fédérale et a plongé les marchés dans le chaos, un geste inattendu qui a pris tout le monde par surprise.

  • Quel est le contexte économique derrière la 'défaite' de la Banque du Japon ?

    -Le Japon a connu des décennies de stagnation économique, avec des taux d'intérêt négatifs et une absence de croissance, ce qui a créé un environnement économique difficile pour la Banque du Japon.

  • Quel est le 'dilemne impossible' auquel fait référence le script ?

    -Le 'dilemne impossible' ou 'trilemma' fait référence à l'impossibilité pour un pays d'avoir simultanément un capital libre, un taux de change fixe et une politique monétaire indépendante.

  • Comment la politique monétaire de la Réserve Fédérale a-t-elle affecté la Yen japonaise ?

    -La politique monétaire de la Réserve Fédérale, notamment la hausse des taux d'intérêt, a rendu le dollar plus fort, ce qui a entraîné une dépréciation du Yen japonais.

  • Quel est le 'carry trade' mentionné dans le script et comment cela a-t-il été influencé par les taux d'intérêt ?

    -Le 'carry trade' est une stratégie d'arbitrage monétaire où l'on emprunte dans une devise à taux d'intérêt bas (comme le Yen) et investit dans une autre à taux plus élevé (comme les treasuries américains). La hausse des taux d'intérêt a rendu cette stratégie risquée et a provoqué un désengagement rapide.

  • Quels sont les risques associés au 'carry trade' décrit dans le script ?

    -Les risques associés au 'carry trade' incluent une volatilité soudaine des taux d'intérêt, une dépréciation de la devise empruntée, et la nécessité de vendre des actifs pour couvrir les coûts accrus de l'emprunt si les taux d'intérêt augmentent.

  • Quelle est la situation économique actuelle du Japon selon le script ?

    -Le Japon est l'un des pays les plus endettés au monde, avec un ratio de dette à PIB de 263%, ce qui le rend vulnérable aux hausses de taux d'intérêt et difficile de gérer politiquement.

  • Quelle est la décision cruciale que le Japon doit faire face au script ?

    -Le Japon doit choisir entre permettre à la Yen de chuter et déclencher une crise monétaire, ou essayer de sauver la monnaie et déclencher une crise de déflation, ce qui pourrait entraîner une récession ou une dépression économique.

  • Quels sont les choix finaux entre lesquels le Japon et les autres nations doivent opter selon le script ?

    -Les nations, y compris le Japon, sont confrontées au choix entre une crise monétaire avec une dépréciation de la monnaie et une augmentation des prix des actifs, ou une crise de déflation avec une chute des prix des actifs et des recettes fiscales.

Outlines

00:00

🌐 La confrontation entre la Banque du Japon et la Réserve Fédérale

Le script aborde la bataille entre les deux principales banques centrales et son impact sur les marchés financiers mondiaux. La décision inattendue de la Banque du Japon de hausser les taux d'intérêt a provoqué un chaos sur les marchés, menaçant l'équilibre établi par la Réserve Fédérale. L'analyse se concentre sur les stratégies économiques globales, l'impact de cette décision sur l'investissement et l'avenir financier, ainsi que sur la dynamique de pouvoir financier mondial modifiée par cette évolution.

05:01

📉 La situation désespérée du Yen et la 'Dilemme Impossible'

Ce paragraphe explore les difficultés économiques du Japon, connues sous le nom de 'décennies perdues', et l'incapacité de la Banque du Japon à stimuler la croissance ou l'inflation. Il examine également la 'Dilemme Impossible' des politiques monétaires, où un pays ne peut avoir simultanément un taux de change fixe, une politique monétaire indépendante et un compte capital ouvert. La décision surprise de la Banque du Japon de hausser les taux d'intérêt est vue comme un défi à la dominance de la Réserve Fédérale et a plongé le marché dans l'instabilité.

10:02

🤑 La 'Stratégie du portefeuille' et ses implications sur les marchés

Le texte décrit le fonctionnement de la 'Stratégie du portefeuille', où des investisseurs empruntaient à des taux bas au Japon pour investir dans des actifs à haut rendement aux États-Unis, profitant de l'écart de taux d'intérêt. Cependant, l'augmentation des taux par la Banque du Japon a entraîné un déséquilibre et une augmentation des pressions sur le Yen, menaçant la stabilité des marchés financiers internationaux.

15:02

📉 La décision risquée du Japon et ses conséquences globales

Ce paragraphe analyse la décision risquée mais nécessaire du Japon de hausser les taux d'intérêt pour chasser les courtiers et tenter de normaliser sa politique monétaire par rapport à celle de la Réserve Fédérale. Cependant, cela a un coût élevé pour les marchés mondiaux et soulève des questions sur la capacité du Japon à continuer sur cette voie, en particulier étant donné son niveau élevé de dette.

20:04

🏦 Le choix entre la crise monétaire et la crise de la dette

Le dernier paragraphe réfléchit sur les options difficiles qui s'offrent au Japon et aux autres nations face à la montée de l'inflation et de la dette. Il compare la situation actuelle à celle de la crise de 2020, où l'impression de monnaie et les mesures de relance ont entraîné une hausse considérable des prix des actifs, et suggère que les gouvernements choisiront probablement de poursuivre cette politique inflationniste plutôt que de risquer une dépression économique.

Mindmap

Keywords

💡Banque du Japon

La Banque du Japon est l'une des quatre grandes banques centrales mentionnées dans le script, jouant un rôle central dans la régulation de l'économie japonaise. Elle est en conflit avec la Réserve fédérale américaine, montrant comment les décisions de politique monétaire peuvent avoir un impact mondial, comme illustré par leur décision inattendue d'augmenter les taux d'intérêt.

💡Réserve fédérale

La Réserve fédérale américaine est décrite comme la banque centrale dominante mondiale, influençant les marchés financiers internationaux. Le script met en évidence la compétition pour la suprématie monétaire entre la Réserve fédérale et la Banque du Japon, et comment cette lutte peut perturber les marchés financiers mondiaux.

💡Marché des changes

Le marché des changes est un marché financier où les devises sont échangées contre d'autres devises. Dans le script, le marché des changes est en动荡 à la suite de la décision de la Banque du Japon d'augmenter les taux d'intérêt, ce qui a entraîné un fort mouvement du yen japonais.

💡Politique monétaire indépendante

La politique monétaire indépendante fait référ à la capacité d'une banque centrale de régler ses propres taux d'intérêt sans influence extérieure. Le script souligne l'importance pour le Japon d'avoir une politique monétaire indépendante par rapport à la Réserve fédérale américaine, malgré les défis que cela représente.

💡Dilemme de la trilemma

Le 'dilemma de la trilemma' est un concept qui décrit l'impossibilité pour un pays d'avoir simultanément un taux d'échange fixe, une politique monétaire indépendante et un capital librement mobile. Le script utilise ce concept pour expliquer la situation difficile dans laquelle se trouve le Japon.

💡Opération de marché

Les opérations de marché sont des actions entreprises par les banques centrales pour influencer les taux d'intérêt et la valeur de la monnaie. Le script mentionne l'intervention du gouvernement japonais sur le marché des changes pour tenter de soutenir la valeur du yen.

💡Trade carry

Le trade carry est une stratégie d'investissement qui implique l'emprunt dans une monnaie à taux d'intérêt bas pour investir dans une monnaie à taux d'intérêt plus élevé. Le script décrit comment le trade carry a été ouvert en raison de la politique monétaire du Japon et comment cela a créé des risques pour les marchés financiers mondiaux.

💡Ajustement des marges

L'ajustement des marges fait référ à la demande de collatéral supplémentaire par une plateforme d'investissement lorsque la valeur des actifs investis chute. Dans le script, cela est lié à la stratégie de trade carry et à la manière dont les hausses des taux d'intérêt peuvent entraîner des ventes forcé des actifs.

💡Inflation

L'inflation est une augmentation générale et persistante des prix des biens et services. Le script aborde la question de savoir si les gouvernements choisiront d'augmenter les taux d'intérêt pour lutter contre l'inflation, ce qui pourrait entraîner une crise économique, ou s'ils préfèreront continuer à imprimer de l'argent, ce qui pourrait causer une inflation galopante.

💡Déficit budgétaire

Un déficit budgétaire se produit lorsque les dépenses d'un gouvernement dépassent ses revenus. Le script mentionne les déficits budgétaires importants des États-Unis et du Japon et la difficulté pour ces pays de gérer leurs dettes en cas de crise économique.

Highlights

La Banque du Japon et la Réserve Fédérale sont en conflit, ce qui a provoqué un choc sur les marchés mondiaux.

La décision inattendue de la Banque du Japon d'augmenter les taux d'intérêt a jeté les marchés dans le chaos.

L'augmentation des taux par la Banque du Japon est un défi direct à la dominance de la Réserve Fédérale.

L'évaluation de l'impact de cette décision sur les investissements et l'avenir financier des gens.

Présentation de Mark Moss, investisseur et partenaire dans un fonds d'investissement global.

La situation de désespoir économique du Japon et les tentatives de la Banque du Japon pour changer l'ordre monétaire mondial.

L'explication de la 'trilemma impossible' que chaque banque centrale doit résoudre entre politique monétaire indépendante, taux de change fixe et libre flux de capitaux.

La Réserve Fédérale a augmenté les taux d'intérêt pour la première fois depuis longtemps, ce qui a mis la monnaie japonaise sous pression.

La stratégie de la Banque du Japon pour tenter de maintenir la valeur de la yen malgré la faiblesse persistante.

L'intervention de 2 milliards de dollars par le gouvernement japonais pour soutenir la yen.

La description de la 'stratégie du carry trade' et son impact sur les marchés financiers mondiaux.

L'augmentation des taux d'intérêt par la Banque du Japon pour freiner les courtiers, ce qui a entraîné un déséquilibre des marchés.

L'impact potentiel de la politique monétaire du Japon sur les marchés américains et mondiaux.

La détermination de la dette japonaise par rapport au PIB et les implications pour la politique monétaire.

Le choix difficile entre une crise monétaire et une crise de déflation pour le Japon.

La prédiction d'une possible future crise de dette et d'inflation à grande échelle.

L'invitation à rejoindre une session en direct pour une analyse approfondie des cycles économiques et des opportunités d'investissement.

La conclusion sur le choix probable des gouvernements face à la crise économique et les implications pour les investisseurs.

Transcripts

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the bank of Japan versus the Federal

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Reserve and how their battle crashed the

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market and of course what this means for

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you now in today's over financialized

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world the battle between major central

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banks can change the asset prices in the

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blink of an eye and today the stakes

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have never been higher Japan and the

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Federal Reserve are locked in a battle

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that sent shock waves through the entire

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Global markets and the aftermath could

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change everything now what happened well

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just a few days ago Japan took an

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unexpected and a very bold St step that

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uh nobody thought that they could or

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that they would do this and basically

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they raised interest rates Against All

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Odds now this was a direct challenge to

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the federal reserve's dominance and has

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thrown markets into complete chaos but

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why did they do it and how does this

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impact you now in this video we're going

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to dive deep into the economic chess

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game that's being played on a global

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scale we're going to look at how Japan's

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strategic move against the FED isn't

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just about saving their currency it's

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about redefining Global Financial power

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we're going to look at the hidden

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strategies that Traders around the world

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were using and how they're all now

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unraveling and of course what all this

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means for your Investments and your

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financial future now having this

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information is going to make sure that

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you're ready to capitalize on the risk

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and the opportunities at play and you

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know if you want to protect and grow

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your wealth which who doesn't so let's

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go real quick if you're new to the

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channel my name is Mark moss and I've

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been investing my own money in these

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turbulent markets for decades now you

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know the same smooth Seas never made a

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skilled sailor well I've swim in the

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most turbulent Waters now today on top

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of making you know these investing

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educational videos and coaching

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thousands of investors on navigating

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these markets I'm also a partner in a

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global hedge fund and this morning we

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are really busy understanding all of

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this and of course making the

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corresponding moves so you're going to

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get the research fresh right now so you

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can go make the same moves that you need

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to make as well all right let's get into

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this all right so are talking about

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Japan's desperation Japan's unexpected

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move now we talked about sort of This

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Global Supremacy over monetary order and

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really when we think about this we have

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to understand that there are just well

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there's central banks and then there's

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major central banks so there's I don't

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know 160 170 central banks but there's

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uh four major central banks and they are

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of course the Federal Reserve the United

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States the top of the Heap right uh the

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reserve currency of the world then below

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that we have uh the bank of Japan which

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we're talking about here we have the

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east B the European Central Bank and we

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have the pboc we have China right so

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those are the major central banks now

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the dollar is the reserve currency of

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the world and so the FED sort of drives

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the market but not every country likes

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that so there's this battle for

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Supremacy we're going to talk about that

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and they did a desperate move now when I

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say desperate they did something that

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nobody thought was possible basically

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Japan has been the last couple decades

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of what we call stagflation the Lost

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decades as they call it in Japan where

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basically the markets crashed everything

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crashed and they haven't been able to

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get any growth they've had no inflation

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in the market now so Japan had rates

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basically at zero as a matter of fact

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they had rates negative for a really

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long period of time just recently we're

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going to go through this but just

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recently they were to to get them back

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up to zero and a little bit above zero

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nobody thought they could actually rais

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them and they did they caught everybody

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off guard and that's what's causing the

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whole world to panic right now and what

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we can see here we can see it in this

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chart right here you can see how big of

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a panic how big of an Abrupt move this

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is so the the Japanese Yin priced in US

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dollar had been going down down down

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down down down down for a long period of

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time and out of nowhere look at this it

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just took off it's up 15% when you're

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looking at currencies that is a massive

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move I know if you're used to looking at

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Bitcoin 14% is nothing that is a big

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deal for the Japanese Yen and we can

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really see how big of a move this was

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made specifically by Japan obviously not

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just from this chart right here but if

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we look at the Dixie chart so the Dixie

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the dollar Index is basically meur

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measuring the dollar against a basket of

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currencies so when we look at the dollar

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overall of course the dollar goes up and

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down everything's trading against each

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other and we can see that the dollar the

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the dollar Index the Dixie has dropped

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but it's down 2% now that's a pretty big

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candle two two big candles in a row

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right here uh but you can see it's sort

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of within this range so it all came from

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Japan like I said In This Very desperate

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attempt that they have all right now

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understanding The Impossible situation

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that Japan is in means that you have to

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understand the impossible trilemma now a

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trilemma is different than a dilemma a

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dilemma means that you have you know to

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choose between one or the other trilemma

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means you have to choose two over one

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and so the impossible dilemma that not

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just Bank of Japan has but every country

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with a central bank and policy has is

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these three things number one free flow

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of capital so now a country wants to

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have capital accounts Capital markets

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they want to attract capital investment

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Capital businesses to be there people to

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invest in the country but then people

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also need to get money out of the

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country this is one of the problems with

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China China's like a black hole where

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money can come in assets come in but it

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can never leave which is why people

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don't want to invest there so you need

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to have a free flow of capital in and

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out but you also want to have a fixed

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exchange rate and then third you need

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you want a country would want to have an

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independent monetary policy meaning they

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can adjust their monetary policy they

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can tighten the ease whenever they want

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the problem is that if you get two of

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these you're going to get less of

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another so for example if you want to

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fix your exchange rate like what China

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does and you want to have independent

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monetary policy like China then you

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can't have an open Capital account if

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you want to have an open Capital account

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and monetary policy then you can't have

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a fixed exchange rate the market will

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dictate what that is and so that's sort

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of the situation that uh Japan has found

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themsel in now why is that well uh well

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first I want to say is that they want to

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have an independent policy that's one of

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the legs of the trilemma but independent

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from who would be a question that that

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I'd want to ask well independent from of

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course the reserve currency of the world

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so we can see in this chart right here

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the reserve currency the US dollar makes

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up

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62% of foreign reserves so of course

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it's going to dictate what the world

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does and so Japan has been stuck in this

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situation where they've been again sort

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of at the whims of the United States uh

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the the dollar and they want to change

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this that's the tri limit that they've

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been in but how can they try to get all

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three get that proverbial free lunch and

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that brings us to the next part and that

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is that the FED has been fighting back

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now the FED isn't really so much

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fighting back against Japan or or China

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maybe they are a little bit but really

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the FED just wants to control its own

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independent monetary policy so the FED

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can set the interest rates although

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that's a whole another topic if you want

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me to make a video on that let me know

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but really the FED is sort of adjusting

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to what the market wants the rates to be

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that's a whole different topic uh but

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the FED does or is independent and of

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course the United States has open

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capital accounts but the problem is that

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again because the FED has the dollar

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which is 62% of the world's Reserve

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currency it's dictating the rest of the

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market so what happened is if you

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remember the FED started hiking rates

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remember that uh we were on this

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monetary easing cycle for so long rates

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had been basically at zero since like

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2008 they went up a little bit came back

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down and was it uh November October of

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2021 the FED announced they were going

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to start raising rates uh then about

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March March of 2022 they went on the

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fastest most aggressive rate hiking

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cycle in history now what does that mean

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for us well if we look at this chart

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right here we can look at Japan we can

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see in this chart right here this is the

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Japanese Yen again priced in US Dollars

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and what I'm showing you in this box

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right here is that the price the

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stability between the Yen and the dollar

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had been pretty stable this is about I

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think about 2015 right here to 2022 yeah

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2015 to 2022 and it had remained very

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stable in this box but right here where

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I put this red arrow is drum roll please

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it's March of 2022 it's when the FED

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started going on that aggressive rate

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hiking cycle and so as they started

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raising rates in the US it started

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making the dollar much stronger and it

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plunged the Japanese Euro all the way

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down and it plunged the Japanese Yen all

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the way down now this blip right here is

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where we're at today that's what we're

play08:28

talking about but what's important to

play08:30

understand is that this had been a very

play08:33

stable monetary policy for Japan during

play08:36

this whole period and during this period

play08:39

about a seven-year period people got

play08:41

lulled to sleep they thought that Japan

play08:44

would never changeed Japan would just

play08:46

stay in this Zone but of course as the

play08:48

Yen started to

play08:50

plunge then it opened up another trade a

play08:53

trade that we're going to talk about

play08:54

right now I'm going to break it down and

play08:55

then you can see this pop right here but

play08:58

what happened happened during that time

play09:00

the yin was plunging it was getting

play09:02

weaker and weaker and weaker now I like

play09:04

to use uh if you remember when FTX The

play09:06

cryptocurrency Exchange collapsed I did

play09:08

several videos on that and I used uh the

play09:11

fall of FTX sort of as a proxy to

play09:14

understand what's going on in Japan so

play09:15

let me revive that story here real quick

play09:17

so you can understand this so you

play09:18

remember FTX was a cryptocurrency

play09:21

exchange and if you remember what

play09:23

happened during that time I made a video

play09:24

about it where they had their own token

play09:27

and the problem is that they used use

play09:29

that token for collateral for a lot more

play09:32

debt and to buy other things but the

play09:34

problem is is that their token started

play09:36

to drop in value and so what FTX was

play09:38

doing is selling all their other assets

play09:40

and buying their token in the market to

play09:43

try to prop up that token eventually CZ

play09:46

the head of binance said hey that

play09:48

token's not worth it we're going to sell

play09:50

that token we don't want it anymore and

play09:52

then it started plunging rapidly FTX was

play09:55

selling everything they could to try to

play09:57

buy it at Market to keep it from falling

play10:00

but they couldn't nobody wanted the

play10:02

token and this is exactly what's going

play10:04

on with Japan the Japan token stayed

play10:07

relatively stable but once the FED

play10:09

started to raise rates the Japanese

play10:11

token started plunging now Japan has

play10:13

been aggressively selling anything they

play10:16

can to buy their token the Japanese yen

play10:19

to prop it up and that's where we're at

play10:21

now we can see this happening in real

play10:22

time the Yen weakness persists despite

play10:25

Tokyo's $2 billion intervention so the

play10:30

the Japanese government is

play10:32

selling us treasuries selling whatever

play10:34

they can and buying billions tens of

play10:37

billions of dollars of their own

play10:38

currency at Market trying to prop it up

play10:41

but the problem is just like with the

play10:43

fall of FTX nobody really wants it and

play10:46

so we can see it plunging plunging

play10:48

plunging as a matter of fact right here

play10:50

so it went up and came down this is the

play10:52

first intervention shortly after ueda

play10:55

the press conference that saw Japanese

play10:56

rip to 160 so they did an intervention

play10:59

it went up temporarily it worked for a

play11:02

minute and then it plunged down again

play11:05

and then they did another intervention

play11:06

they got it back up again but it plunged

play11:08

again so no matter how much they

play11:10

intervene it has like a sugar rush it it

play11:12

gets up really quickly and then it just

play11:14

falls back down sort of like where FTX

play11:17

found themselves but here's the problem

play11:19

they realize this is the problem and

play11:21

they realize that they're going to have

play11:22

to do something drastic in order to get

play11:25

this to be fixed so the yin is under

play11:27

pressure even as Japan steps up its

play11:29

verbal warning so then Japan's like well

play11:31

we're dumping tens of billions of

play11:33

dollars we can get it temporarily the

play11:35

problem is is all these short sellers

play11:37

these short sellers are piling in and

play11:38

pushing the price down so what we're

play11:40

going to do Japan said they're ready now

play11:42

a verbal warning they're ready to take

play11:44

action on currency if needed so this is

play11:47

after this was in June 23rd it's about a

play11:50

month ago month a little over a month

play11:51

ago they're ready to take action on

play11:53

currency if needed what does that mean

play11:55

well any action that they have to take

play11:58

they've been trying to buy backup and

play11:59

they have about $1.2 trillion of assets

play12:03

they could sell to continue to prop up

play12:04

their currency but they could also just

play12:06

try to shake out all the people that

play12:09

were shorting the market now what do we

play12:11

mean by shorting the market this is what

play12:13

you probably been hearing about which is

play12:14

called the carry trade and so the carry

play12:17

trade was opened up because Japan was

play12:20

stuck in this trilemma situation and so

play12:22

basically the shorts had opened up a

play12:25

carry trade of about $2

play12:27

trillion again against the Japanese Yen

play12:31

they were selling it short I'm going to

play12:32

break down how this works for you and

play12:34

what we can see is that that created a

play12:37

massive risk for the market as a matter

play12:38

of fact it says is the Japanese carry

play12:41

trade the next big risk in the market

play12:43

this was in January people have been

play12:46

talking about this we've been doing

play12:47

videos on this for a long time this has

play12:49

been a big risk Japan's government is

play12:51

engaged in a massive $ trillion Carriage

play12:56

rate I mean imagine how massive that is

play12:57

for a small country like Pan um it says

play13:00

here that this could bring unexpected

play13:02

risks if the Central Bank tightens

play13:05

policy H which is exactly what just

play13:09

happened so the Japanese couldn't buy

play13:11

enough of their token to prop it up all

play13:14

these short sellers were selling it

play13:15

short putting that downward pressure

play13:17

like when CZ from binance said he was

play13:18

going to sell the FTX token and Japan's

play13:21

trying to prop it up and they're like

play13:23

well we may have to do something

play13:24

unexpected unexpected like what well

play13:26

this in January says right here it could

play13:28

bring unexpected risk if the Central

play13:30

Bank tightens policies and that's

play13:33

exactly what happened we can see right

play13:36

here that the Central Bank of of Japan

play13:38

started to do that so this is going back

play13:40

to 2008 right here the red line is CPI

play13:44

the yellow line is the Japanese Central

play13:47

bank's interest rate policy and you can

play13:49

see that it was basically flatlined from

play13:51

2008 it went down into negative

play13:54

territory right here around 2016 and

play13:58

it's remained in negative territory just

play14:00

here in 2024 it got above positive

play14:03

territory and now they raised it just

play14:06

0.25% now to put this into perspective

play14:09

the Federal Reserve of the United States

play14:10

raise rates Five Points this is only a

play14:14

quarter of one point and look how much

play14:17

damage this has done all right so that's

play14:19

exactly what happened they raised rates

play14:21

and got unexpected results let me show

play14:23

you how this carry trade works and why

play14:25

this matters so here's how the car carry

play14:27

trade works it's basically Arbitrage

play14:29

what this means is that in the US market

play14:31

us treasuries let's say that we can earn

play14:34

5% okay over here in

play14:37

Japan as I just showed you rates were

play14:39

zero so let's say that in Japan I could

play14:41

borrow for let's say

play14:44

0.8% so I go borrow money in Japan for

play14:49

0.8% I bring it over to the United

play14:51

States and I park it in treasuries and I

play14:54

make the difference 5% minus

play14:57

0.8 or I put it into the US Stock Market

play15:02

and let's say I put in the S&P 500 I put

play15:04

in the mag SS I put in Nvidia and now

play15:06

I'm making 12 15 20% minus the eight and

play15:10

so more and more money kept getting

play15:13

borrowed selling the Yen short and it

play15:16

all that money was Finding its way into

play15:18

stronger markets mostly into the United

play15:20

States in the stock market into Nvidia

play15:22

into us treasuries it's been great but

play15:25

here's the problem a lot of this money

play15:26

was put in there on margin so that means

play15:29

that they would borrow $1,000 from here

play15:33

and they would take it over here and

play15:34

they would buy let's say $5,000 worth of

play15:37

stuff or maybe maybe more depends on

play15:40

what their credit is maybe $10,000 worth

play15:42

of stuff but the problem is is this

play15:44

unwinds very quickly for two reasons as

play15:46

long as this Japanese rate kept getting

play15:48

lower lower lower lower lower lower

play15:51

everything was great right this debt

play15:53

kept getting cheaper cheaper cheaper

play15:55

more money kept coming over and these

play15:57

assets went higher higher higher the

play15:59

problem is the unexpected results when

play16:01

Japan raised the rates and only by

play16:04

raising them only

play16:06

0.25% this whole thing started to unwind

play16:10

when these rates went up all of a sudden

play16:13

the interest that was owed went up and

play16:15

when that happened some of this had to

play16:17

start selling off to now pay for this

play16:21

and as this started to sell off the

play16:23

asset prices started to go down as the

play16:26

asset prices to go down started to go

play16:28

down on stuff that was on margin then

play16:31

the margins were called and they had to

play16:33

post more collateral to post more

play16:34

collateral they had to sell more when

play16:36

they sold more prices went down even

play16:37

more which then mean more margin costs

play16:38

means they had to sell more to post more

play16:40

collateral and all the while they were

play16:42

selling this creating this downward

play16:44

pressure this was getting more and more

play16:46

expensive and this whole thing started

play16:48

to wind down now this was great for so

play16:50

long because for 20 years they kept

play16:53

rates at zero and they just continue to

play16:55

stay low and get lower lower lower but

play16:57

again the UN expected shift to try to

play17:00

shake off these short sellers put the

play17:02

entire Market into a tail spin so that's

play17:04

where we're at now confronting Godzilla

play17:08

where do we go from here all right the

play17:10

elephant in the room if you will we'll

play17:11

call it Godzilla because it's Japan so

play17:13

where do we go from here what happens

play17:16

can Japan really continue to raise their

play17:18

rates what happens to the US markets

play17:21

what happens to the four central banks

play17:22

that are now fighting against each other

play17:25

well what Japan is doing is somewhat

play17:28

necess AR but it comes with a very steep

play17:31

cost so they have all these short

play17:33

sellers that have piled in pushing the

play17:36

currency down and doing this carry trade

play17:39

over into the United States they need to

play17:41

shake them off they need to get rates

play17:43

back into positive territory but the

play17:45

problem is it comes at a steep cost it

play17:46

comes at the cost of wrecking the global

play17:49

markets the bigger problem is that Japan

play17:52

is one of the most indebted nations in

play17:54

the world with a

play17:57

263 debt to Genie P now put that in

play18:00

comparison the US is about somewhere in

play18:02

the 120% range they're at 263 and not

play18:06

just the government the private debt is

play18:09

120% of debt to GDP so the problem is is

play18:12

that they want to sort of normalize

play18:15

their policy with the Federal

play18:17

Reserve but the problem is is that the

play18:19

FED is at you know 5% and they're at

play18:23

0.25 they may have to hike another 13 14

play18:27

depends on how fast they hike but 1 more

play18:29

times to even get anywhere normalized

play18:31

with the fed and if it the whole world

play18:33

is melting down over a quarter point

play18:35

hike what do you think happens if they

play18:37

go with a three four five% hike now the

play18:41

bigger problem is this right now

play18:44

currently if they were to normalize the

play18:47

policy with the FED that means they

play18:48

would be paying

play18:50

133% of their gross domestic product of

play18:53

their GDP just for interest on the debt

play18:56

now to put this into perspective the

play18:58

United States as you've seen I've done

play19:00

many videos on this uh the interest on

play19:02

the debt has gone up parabolic and as a

play19:04

matter of fact in the United States

play19:05

we're now spending a trillion dollars

play19:07

more than a trillion dollars just on the

play19:09

interest on the debt and the interest on

play19:11

the debt has now exceeded the cost that

play19:13

the US spends on the US military which

play19:15

of course the US military spends more

play19:16

than the next 10 Nations combined but

play19:19

even as crazy as that number is it's

play19:22

about 3% of GDP so for Japan to try to

play19:27

do what's necessary and try to normalize

play19:30

policy they'd be spending

play19:32

133% problem is they can't do that and

play19:35

so they want to confront Godzilla but

play19:37

Godzilla might just be too big for them

play19:40

so which path are they going to take are

play19:43

they going to fight Godzilla or they

play19:44

just going to go back into their hole

play19:46

and really we can see that the entire

play19:49

system is buckling as they weigh these

play19:52

two decisions so the choices are one do

play19:55

we have a currency crisis do we continue

play19:57

to let the Yen just fall plunge plunge

play19:59

plunge plunge plunge or do we try to

play20:02

save the currency fight off the short

play20:04

Sellers and have a deflationary crisis

play20:07

those are are choices those are the

play20:08

sides of the coin heads or tails they

play20:10

can choose what they

play20:12

want not unlike what FTX had to choose

play20:15

and not unlike which the us is going to

play20:17

have to choose at some point the us is

play20:19

going to have to choose right now would

play20:21

we rather have another Great Depression

play20:23

a deflationary crash where jobs are

play20:26

wiped out people are homeless and on

play20:28

food lines that the stock market's wiped

play20:30

out the real estate Market's wiped out

play20:32

we go into another you know 20year Great

play20:34

Depression period or do we have a great

play20:37

debasement where let's just go print

play20:39

trillions more dollars and let's just

play20:41

put asset assets

play20:43

Skyhigh this is the same decision the US

play20:46

is in which is the same decision that

play20:49

Japan is in do the markets crash or do

play20:53

taxes crash you see if the markets crash

play20:55

if we choose option one a Great

play20:57

Depression then then what happens well

play20:59

nobody's working and so with nobody

play21:01

working then there's no taxes being paid

play21:03

if the stock market crashes if the real

play21:05

estate market crashes then there's no

play21:06

capital gains taxes and then there's no

play21:08

taxes to the government now the

play21:09

government's already running

play21:12

multi-trillion dollar deficits today if

play21:15

we go into just even a garden variety

play21:18

recession we'd expect to see tax

play21:20

receipts plunge somewhere between 12 to

play21:22

15% now the treasury just announced a

play21:25

couple weeks ago that just the borrowing

play21:26

for the rest of this year which is not

play21:28

even half left they need another 1.7

play21:31

trillion just for this year so if taxes

play21:36

Garden variety recession crashed by 15%

play21:38

they have to borrow even more if we have

play21:40

a Great Depression style how will the

play21:43

government survive now what's going to

play21:44

happen obviously would be that they

play21:46

would have to continue printing money

play21:47

for the government and more stimulus

play21:50

more welfare and more importantly to

play21:52

continue to run that those deficits all

play21:55

of that money printing will be highly

play21:57

inflationary

play21:58

so you know I think about uh 2020

play22:01

remember 2020 and what happened in 2020

play22:04

well the whole country was shut down not

play22:07

because the recession but because the

play22:08

government forced to shut down the

play22:10

government then was forced to inject

play22:12

money print stimulus money and injected

play22:15

directly in the economy trillions of

play22:16

dollars and what happened homes went up

play22:19

by 50% stocks went up by 50% Bitcoin

play22:22

went to the moon so did your gasoline

play22:24

and so did your steak and so did your

play22:26

houses as well and so I think about 2020

play22:28

and I think this is where we're going

play22:29

now in my opinion well it's not my

play22:32

opinion based off a factual observation

play22:34

if we look at every government in the

play22:35

world today and sort of every uh

play22:38

experiment in the past every government

play22:39

in the past there hasn't been an

play22:41

experiment that I've seen where a nation

play22:43

decided Well boys pack it in it was a

play22:45

good run while we had it let's just shut

play22:47

her down not when there's still ink in

play22:50

the money printer and so I believe that

play22:51

they'll turn that money printer back on

play22:53

and we'll print it skyh High they'll

play22:55

always choose a currency crisis and a a

play22:58

great basement over the alternative and

play23:00

that is inflation now the thing about

play23:02

when this inflation shoots Sky High is

play23:05

it doesn't push all asset prices up

play23:07

evenly for example the NASDAQ went up by

play23:10

about uh double what the S&P 500 did

play23:13

Bitcoin went up about 5

play23:15

600% on top of that right and so there's

play23:18

different ways that these different

play23:19

assets interact now if you'd like to see

play23:21

the playbook for this we're in the

play23:23

middle of what I'm calling a qwave a

play23:25

Quantum wave leap in technology and this

play23:29

inflation that we're about to see thrust

play23:30

into the market is going to make 2020

play23:32

look like chump change and it's going to

play23:34

drive asset prices to highs we've never

play23:37

imagined come hang out with me live I

play23:39

got about 20 or 30 sh charts that I want

play23:41

to show you so you can understand how

play23:43

each one of these Cycles is very

play23:44

predictable and it lays out exactly what

play23:47

assets we should invest to I call it the

play23:48

investing black hole because there's

play23:49

really no other place you put your money

play23:51

I'm going to give you the top five

play23:52

assets I'm checking out it's free

play23:54

there's a link down below if you want to

play23:55

come hang out and uh hang out with me

play23:57

I'll answer all your questions live to

play23:58

to make sure you have it but either way

play24:00

this is what's going on in Japan it's uh

play24:02

just like FTX was an example of Japan

play24:05

Japan is an example of the rest of the

play24:06

world we're really witnessing this in

play24:09

real time and the entire world one by

play24:11

one the great milkshake theory is going

play24:13

to see each Nation forced to choose one

play24:15

of these three things and as I said

play24:18

every example in current and past

play24:20

history shows which path they take all

play24:22

right let me know what you think in the

play24:24

comments down below thumbs up if you

play24:25

like this video if you don't you can

play24:26

give me a thumbs down that's okay but at

play24:27

least tell me why in the comments down

play24:28

below subscribe if you're not already

play24:30

subscribed and that's what I got all

play24:31

right to your success I'm out

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