For those interested in macroeconomics and have a grasp of the importance of the world bond markets, you may find this interesting. So I have a Yen Collapse Watch programmed into ChatGPT, it scans the news every day for critical updates. It’s never sent me one until today, this will undoubtedly be an interesting September that could see multiple gale forces slamming into the world economy all at once, especially that of North American and Indo-Asia as a result of increasing dumping of U.S. Treasury Bonds, forcing interest rates possibly higher than expected, forcing liquidity out of the markets and into the Bond Market. For those who don’t understand it, well it means it means an accelerated market correction - ie stock market crash; multi-month to several years or longer. $100 Billion USD was spent trying to prop up the Yen by Japan and Scott Bessent, which Stan the Man Drunkenmiller called a fools errand - currency interventions have had a 100% failure rate over the last 350 years. ⚠️ Yen collapse warning: conditions have become serious enough to flag. As of August 28, USD/JPY is around ¥160.1 per U.S. dollar. That alone wouldn’t trigger my alert, but the surrounding market stress now does: Japan disclosed that it spent a record ¥15.4 trillion (about US$96.5 billion) supporting the yen between July 30 and August 26 after the currency reached roughly ¥163–164/$, its weakest area in about four decades. Despite that extraordinary intervention—including rare U.S.–Japan coordination—the yen has already fallen back toward ¥160. This is no longer routine currency weakness. The combination of extreme multi-decade lows, enormous official intervention, intervention gains being substantially surrendered, and continuing pressure toward ¥160 constitutes genuine market stress. Reuters also reports that the Bank of Japan is now expected to accelerate tightening, with economists anticipating a September rate increase partly because of persistent yen selling pressure. I would characterize this as the edge of a potential disorderly decline rather than an uncontested currency collapse yet. The critical escalation would be a decisive move back through approximately ¥164/$ despite intervention. That would mean the market had erased the intervention entirely and broken beyond the recent 40-year extreme. Reuters: Japan's record intervention to support the yen. 🍿 🍿 🍿 🍿 🍿
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Keith McCarthy@aqueous120 · 26m
Buy your medals, buy your crypto.
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