Japan Just Broke the Global Economy (Worse Than Greece)
Published: 2025-05-27
Status:
Available
|
Analyzed
Published: 2025-05-27
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 9
Prediction
Topic
Status
Japan's economic actions could lead to a global recession and crash stock markets worldwide.
"Japan could increase interest rates in your country, crash stock portfolios all over the world, and potentially even trigger the next global recession."
Incorrect
The unwind of the yen carry trade in 2024 caused a yen spike, a crash in Japanese stocks, and impacted US stocks and Bitcoin.
"the carry trade unwind, which led to a quick spike in the yen, which led to a flash crash in Japanese stocks and a ripple effect that hit everything from US stocks to Bitcoin and more."
Incorrect
JP Morgan warned in 2025 that the carry trade unwind was only half completed.
"the Bank of JP Morgan was warning that the carry trade unwind was only halfway done."
Pending
Trillions of dollars in global leverage are at risk of unraveling due to the continuing carry trade unwind.
"trillions of dollars in global leverage are again at risk of unraveling one margin call at a time."
Pending
Japan may begin selling its US Treasury holdings, a significant shift from its historical pattern of buying them.
"And now for the first time in decades, Japan may not just stop buying US treasuries, they might start selling them."
Correct
In May 2025, Japanese 30-year and 40-year government bond yields reached historic highs of over 3% and 3.6% respectively.
"In May 2025, the yields or interest rates on their 30-year government bonds hit over 3%. The 40-year bonds are at 3.6%, an all-time high."
Correct
Japan's actions could lead to global interest rate hikes, worldwide stock market crashes, and a global recession.
"Japan could increase interest rates in your country, crash stock portfolios all over the world, and potentially even trigger the next global recession."
Incorrect
Japan's potential interest rate hikes could lead to global stock market crashes and trigger a global recession.
"Japan could increase interest rates in your country, crash stock portfolios all over the world, and potentially even trigger the next global recession."
Incorrect
Japan has experienced failed bond auctions where investors are not bidding at expected values, indicating a loss of trust.
"And what the whole world just saw are failed bond auctions. Investors are not bidding what they're worth."
Correct
Japanese government bonds are experiencing a decline in value, with rising interest rates and failed auctions.
"The Japanese government bonds are collapsing in value. Long-term interest rates are going up and bond auctions are failing."
Correct
The unwind of the yen carry trade, which began in 2024, is projected to continue throughout 2025.
"And the Bank of JP Morgan was warning that the carry trade unwind was only halfway done. And now, in 2025, that unwinding is continuing."
Correct
Investors are treating Metaplanet, a Japanese company holding Bitcoin, as a hedge against the collapse of Japan's bond market, leading to its stock surge.
"Metlanet is a very popular publicly traded company in Japan. They own thousands of Bitcoin and over the last few weeks that stock has exploded mostly because investors are treating it as kind of a a nuclear hedge against Japan's bond market collapse."
Correct
Rising Japanese interest rates and a stronger yen are causing losses on short positions in Metaplanet and Bitcoin-related strategies, leading to a short squeeze.
"as Japanese interest rates go up and their yen gets stronger, there's shorts that are placed on Metaplanet and Bitcoin related strategies and those started to see huge losses. So what we saw was kind of a short squeeze"
Pending
Japan is predicted to lose approximately 20 million people by 2050.
"And by 2050, they're estimating that Japan is going to lose around 20 million people, which is the equivalent of about everyone in Florida."
Pending
A gradual unwinding of trillions of dollars in global leverage is occurring.
"we're seeing this slow motion unwinding of trillions of dollars in global leverage."
Correct
Currency devaluation is predicted as a necessary outcome in the current financial climate.
"Currency devaluation and the gradual realization that nothing stops this train."
Correct
The Japanese finance minister suggested that Japan's US Treasury holdings could be used as leverage in trade negotiations.
"Even the Japanese finance minister said recently their US Treasury holdings could be used as leverage in trade talks."
Pending
Japan is projected to lose approximately 20 million people by 2050.
"And by 2050, they're estimating that Japan is going to lose around 20 million people, which is the equivalent of about everyone in Florida."
Pending
Japan's debt-to-GDP ratio is over 260% and continues to rise, being the highest in the developed world.
"Which is why Japan now has the highest what's called debt to GDP ratio in the developed world, which is over 260% and it keeps going up."
Correct
Japan has the highest debt to GDP ratio in the developed world, exceeding 260% and continuing to rise.
"Which is why Japan now has the highest what's called debt to GDP ratio in the developed world, which is over 260% and it keeps going up."
Correct
A 1% increase in Japan's interest rates would result in an additional 13 trillion yen (approximately $85 billion) in annual interest payments.
"If Japan's interest rate goes up by 1% for example, that alone would add about 13 trillion yen or 85 billion dollar in yearly interest payments."
Pending
As of 2025, Japan holds over $3 trillion in net foreign assets, including over $1 trillion in US government debt.
"It holds over $3 trillion in net foreign assets, and it's the top holder of US Treasury bonds with over a trillion in US government debt as of 2025."
Correct
Japan is the largest holder of US Treasury bonds, with over $1 trillion in US government debt as of 2025.
"It's the top holder of US Treasury bonds with over a trillion in US government debt as of 2025."
Correct
Japan faces a dilemma: raising interest rates to combat inflation risks bankrupting the government's budget, while keeping them low allows the yen to devalue, increasing import costs and the cost of living.
"Option number one, raise interest rates to fight inflation and protect their currency. But that risks blowing up the government's budget. Or option two, keep interest rates low so the government can keep borrowing, but that lets the value of the yen fall and when the yen gets weaker, the cost of importing stuff gets a lot more expensive."
Correct
Carry trades involving the yen reached hundreds of billions of dollars globally at their peak.
"At its peak, Bloomberg estimated that carry trades involving the yen had reached hundreds of billions of dollars globally."
Pending
The yen carry trade began to unwind in 2024 following the Bank of Japan's first interest rate hike in decades, causing the yen to appreciate over 10% in two weeks.
"And that's exactly what started to happen in 2024. The Bank of Japan raised interest rates for the first time in decades. The yen went up more than 10% in just a couple weeks."
Correct
In 2024, the Bank of Japan's first interest rate hike in decades caused the yen to appreciate by over 10% in a few weeks, signaling the start of the carry trade unwind.
"And that's exactly what started to happen in 2024. The Bank of Japan raised interest rates for the first time in decades. The yen went up more than 10% in just a couple weeks. And what followed was pretty bad."
Incorrect
Bitcoin reached an all-time high unnoticed while Japan's bond market faced issues, interest payments surged, global debt rose, and inflation increased.
"while all of this is playing out and Japan's bond market is breaking, interest payments are exploding, global debt is rising, inflation is creeping in, Bitcoin quietly reached an all-time high, and no one even noticed."
Incorrect
There is a growing sentiment that the current debt-based financial system may not be sustainable in the long term, aligning with early Bitcoin proponents' views.
"The world is waking up to this idea that maybe those crazy Bitcoiners and what they've been saying since the beginning might actually be true, which is that this debt based system might not be sustainable in the long term."
Correct
In May 2025, Japan's 30-year government bond yields exceeded 3%, and 40-year bond yields reached an all-time high of 3.6%.
"In May 2025, the yields or interest rates on their 30-year government bonds hit over 3%. The 40-year bonds are at 3.6%, an all-time high."
Correct
Trillions of dollars in global leverage are at risk of unraveling.
"trillions of dollars in global leverage are again at risk of unraveling one margin call at a time."
Pending
Japan may begin selling US treasuries, a reversal from its historical buying behavior.
"And now for the first time in decades, Japan may not just stop buying US treasuries, they might start selling them."
Correct
The United States faces similar long-term debt sustainability challenges as Japan.
"The US is not that far behind [Japan in debt issues]."
Correct
The Bank of Japan owns over 50% of Japan's bond market and has been printing money to maintain the system.
"The Bank of Japan already owns over 50% of the entire bond market, and they've been printing money for years just to keep that system going."
Correct
Governments are predicted to be unable to solve debt issues through economic growth, tax increases, or spending cuts due to political unwillingness.
"governments are not going to be able to grow their way out of this. They're not going to be able to raise taxes fast enough and they will not cut spending because politicians just don't want to."
Correct
Japanese 40-year government bond yields have reached an all-time high of 3.6%.
"The 40-year bonds are at 3.6%, an all-time high."
Incorrect
Japan is facing a sustainability crisis with its economic model.
"So, Japan is asking a question that no government wants to ask, which is how much longer can we pretend that this is sustainable?"
Correct
Inflation and currency devaluation are presented as potential methods for governments to manage their debt.
"inflating away the debt, devaluing the currency."
Correct
Bitcoin reached an all-time high while facing global economic instability and Japan's bond market issues.
"Because while all of this is playing out and Japan's bond market is breaking, interest payments are exploding, global debt is rising, inflation is creeping in, Bitcoin quietly reached an all-time high, and no one even noticed."
Correct
Bond auctions in Japan are failing, indicating a lack of investor interest at current prices.
"And what the whole world just saw are failed bond auctions. Investors are not bidding what they're worth."
Correct
Bitcoin is seen as an attractive investment due to its independence from traditional financial systems, its finite supply, and its immunity to government control like printing or tariffs.
"it makes sense why people are buying things like Bitcoin, because it's outside the system. It's finite. It doesn't care about bond auctions. It doesn't care about tariffs. can't be printed into oblivion."
Correct
There's a growing belief that the current debt-based financial system may not be sustainable long-term, aligning with early Bitcoin proponents' views.
"The world is waking up to this idea that maybe those crazy Bitcoiners and what they've been saying since the beginning might actually be true, which is that this debt based system might not be sustainable in the long term."
Correct
Investors are treating the Japanese company Metaplanet, which holds significant Bitcoin, as a hedge against a potential collapse in Japan's bond market.
"Metlanet is a very popular publicly traded company in Japan. They own thousands of Bitcoin and over the last few weeks that stock has exploded mostly because investors are treating it as kind of a a nuclear hedge against Japan's bond market collapse."
Correct
The US faces a similar challenge to Japan in escaping a system reliant on near-zero interest rates.
"The US is not that far behind. And in both cases, the question becomes, how do you escape a system that only works when interest rates are close to zero?"
Pending
Japan's US Treasury holdings have been suggested as a potential leverage point in trade negotiations.
"Even the Japanese finance minister said recently their US Treasury holdings could be used as leverage in trade talks."
Pending
Governments facing debt crises may resort to inflating away debt and devaluing currency rather than defaulting.
"And at the same time, we don't want to default. We don't want to not pay. The show must go on. So, what's left? Facing the consequences, getting a credit downgrade, and inflating away the debt, devaluing the currency."
Correct
A 1% increase in Japan's interest rates would result in approximately 85 billion dollars in additional annual interest payments.
"If Japan's interest rate goes up by 1% for example, that alone would add about 13 trillion yen or 85 billion dollar in yearly interest payments."
Incorrect
The speaker is dollar-cost averaging into Bitcoin as a significant part of their investment strategy with no defined sell price, viewing it as a hedge against systemic risks.
"And that's why I've been making it such a big part of my personal investment strategy. Again, I've been dollar cost averaging into it for a long time because this story makes a lot of sense to me and I have no idea what my sell price is. I don't really have one."
Pending
Raising interest rates in Japan risks destabilizing the government's budget.
"But that risks blowing up the government's budget."
Correct
A weaker yen will lead to increased costs for imported goods in Japan.
"but that lets the value of the yen fall and when the yen gets weaker, the cost of importing stuff gets a lot more expensive."
Correct
The Bank of Japan owns over 50% of the bond market and has been using money printing to maintain the system.
"the Bank of Japan already owns over 50% of the entire bond market, and they've been printing money for years just to keep that system going."
Correct
An economy built on cheap money is inherently fragile and will likely falter when interest rates rise.
"Cuz once you build a whole economy around cheap money, the moment you try to raise interest rates, the economy starts to break."
Correct
Bitcoin reached an all-time high while other economic issues were unfolding, largely unnoticed.
"inflation is creeping in, Bitcoin quietly reached an all-time high, and no one even noticed."
Correct
The current debt-based financial system is predicted to be unsustainable in the long term.
"which is that this debt based system might not be sustainable in the long term."
Pending
Governments are unlikely to solve their debt problems through economic growth, tax increases, or spending cuts due to political constraints.
"governments are not going to be able to grow their way out of this. They're not going to be able to raise taxes fast enough and they will not cut spending because politicians just don't want to."
Incorrect
Inflating away debt and devaluing currency are presented as potential government strategies to manage debt.
"Facing the consequences, getting a credit downgrade, and inflating away the debt, devaluing the currency."
Correct
Bitcoin is being purchased as an alternative asset due to its finite nature, independence from traditional financial systems, and immunity to inflation.
"then it makes sense why people are buying things like Bitcoin, because it's outside the system. It's finite. It doesn't care about bond auctions. It doesn't care about tariffs. can't be printed into oblivion."
Correct