The 4th largest economy in the world, Japan, which has been the entire world's source of liquidity for over 2 decades, is insolvent and about to destroy your portfolio.
What happened in August 2024 was a preview.
The Main Event is near.
Oil priced in yen has super-spiked.
Japan imports 94% of its crude from the Middle East.
The BOJ is trapped. Yen weakening. Import costs exploding.
The reverse carry trade isn't a theory anymore.
It was always about oil.
Phase 1 of the reverse carry trade - US bond yields rise as Japan sells Treasuries to raise dollars in preparation to defend the Yen.
Phase 2 of the reverse carry trade - US bond yields fall as stock market volatility spikes and traditional risk-off behavior returns.
Is it here