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Japan Just Triggered a $20 Trillion Crisis | Why Your Portfolio Has 90 Days Before Liquidation



Japan Just Triggered a $20 Trillion Crisis | Why Your Portfolio Has 90 Days Before Liquidation

Japan just crossed a line that hasn’t been crossed in 30 years. And the ripple effects are going to destroy unprepared portfolios in the next 90 days.
January 20, 2026: Japan’s 30-year government bond yield spiked to 3.9%, highest level since these securities were created in the 1990s.
What happened next should make your blood run cold: The U.S. Federal Reserve had to intervene directly in currency markets to prop up the Japanese yen. The U.S. central bank is now using American resources to support a foreign country’s currency to prevent financial contagion.
This isn’t normal central bank cooperation. This is panic. This is calling in air support because the ground troops are about to get overrun.
THE FOUNDATION – JAPAN’S DEBT CRISIS:
Japan’s debt-to-GDP ratio: 250% – owes 2.5x its entire annual economic output
U.S. debt-to-GDP: 128% – Japan’s is TWICE as bad
For 30 years, Japan paid essentially ZERO interest on this massive debt
Bank of Japan kept rates at 0%, sometimes negative, for three decades
THE BREAK:
December 2025: Bank of Japan raised rates to 0.75% – highest in 30 years
Abandoned yield curve control – stopped being buyer of last resort
Japanese bond yields exploded in response:

10-year yield: 0.5% to over 2% in less than 6 months
30-year yield: hit 3.9%

This is a 6-sigma event – something that should occur once every hundred million years. But it’s happening. And accelerating.
THE $20 TRILLION CARRY TRADE COLLAPSE:
Japan holds $1.2 trillion in U.S. Treasury bonds – single largest foreign holder, more than China
For 30 years, the greatest trade in finance history:

Borrow yen in Japan at 0% interest
Convert to dollars
Buy U.S. Treasury bonds paying 4-5%
Collect the spread – free money with no risk

THE MATH JUST BROKE:
Japanese bonds now yield 2-3.9%. Why would Japanese investors take currency risk buying U.S. Treasuries at 4.8% when they can buy Japanese bonds at 3.7% at home with zero currency risk?
They won’t. They’re going to sell. $1.2 trillion in forced selling pressure on U.S. government debt.
BUT IT’S NOT JUST JAPAN:
Hedge funds leveraged this trade 10x, 20x. Total leveraged carry trade exposure: $15-20 TRILLION in notional positions that are now underwater and must be unwound.
PREVIEW OF WHAT’S COMING:
August 2024: Small BoJ rate hike triggered carry trade unwind

Bitcoin crashed 23% in 3 days
NASDAQ dropped 10%
S&P 500 fell 8%
Over $2 trillion in market value wiped out in 72 hours

That was just a tremor. What’s coming now is the full earthquake.
WHY THIS DESTROYS YOUR PORTFOLIO:
When Japanese and hedge fund investors close carry trade positions, they don’t just sell U.S. bonds – they sell EVERYTHING. Margin calls force them to dump stocks, crypto, commodities. Anything liquid to cover losses.
This is indiscriminate forced liquidation. When trillions in leveraged positions unwind simultaneously, markets crash.
YOUR TECH STOCKS get sold not because companies are failing, but because hedge funds need cash to cover blown-up Japan trades
YOUR REAL ESTATE at risk: If Japanese selling pushes 10-year Treasury yields from 4.8% to 5.5-6%, mortgage rates follow. 30-year fixed at 7% now could hit 8-9%. Housing prices fall as affordability collapses.
YOUR CRYPTO gets crushed: When institutions de-risk, Bitcoin and Ethereum sold first. August preview: Bitcoin dropped 23% in days. Will happen again, potentially worse.
THE TERRIFYING PART:
Bank of America data: Half of all major institutional money managers currently have ZERO downside hedges. Zero protection. Fully long, fully exposed, completely unprepared.
Everyone is on the same side of the boat. When everyone tries to exit at once, the boat flips.
IT GETS WORSE – EUROPE:
Europe holds approximately $3 trillion in U.S. Treasury bonds – triple what Japan holds
European governments facing massive pressure to increase defense spending for Ukraine, U.S. pressure to spend 3-4% GDP on military
Where will they get money? Sell assets. Biggest liquid asset: U.S. Treasury bonds.
TOTAL SELLING PRESSURE:
Japan: $1.2 trillion
Europe: $1 trillion+
Unwinding hedge fund carry trades: $15-20 trillion notional exposure
All hitting market at same time
CORRELATION BREAKDOWN – YOUR HEDGE IS GONE:
Normal markets: Stocks down, bonds up. 60/40 portfolio hedged.
When government creditworthiness questioned: Stocks down AND bonds down together. Hedge breaks. You get destroyed on both sides.
Ken Griffin, Citadel founder: “Bonds lose what makes them special in a portfolio when bonds and stocks move together in prices. Bonds lose a substantial part of what makes them so special.”
Translation: Your 60/40 portfolio is now 100% risk. Both sides moving down together. Not diversified. Just exposed everywhere.
WHAT TO DO – DEFENSIVE POSITIONING:
WATCH KEY LEVELS:

U.S. 10-year Treasury yield above 4.75%: warning sign
U.S. 30-year yield above 5%: crisis signal
Dollar-Yen below 140: carry trades unwinding fast.

34 Comments

  2. @DeepTimeLore007 on

    I like the narrative style of your videos. I'm most especially drawn to how your images provide such engaging depiction of the narration. I'd like to attain such heights for my channel too. Great work❤❤

  13. @diegoanthony9995 on

    The stock market has always struck me as a rigged casino at which the house always wins. So much of our economy also seems based on scams, rip-offs, and unfair bargaining practices where the vast majority of citizens are bargaining with unscrupulous manipulators taking advantage of the (suckers) purchasers.

  14. @secteurh2 on

    I have fact checked. This is bullshit : " The U.S. Federal Reserve had to intervene directly in currency markets to prop up the Japanese yen. The U.S. central bank is now using American resources to support a foreign country's currency to prevent financial contagion." The FED hasn't intervened (yet) so the claim is wrong. New York Fed did "rate checks" (market soundings) around Jan 20-24 on USD/JPY levels, at Treasury request amid yen weakness and Japan bond turmoil. Maybe preparing possible joint U.S.-Japan action but you can't say they did it. What a lie. First and last video of this channel I watch

  16. @the-final-judge on

    No, Japan has enough reason to fear. Just if I would not shut the horror, they are right. But Japan saved deeply by withdrowing and its not everything. Energy will return nicely.
    The reason of Withdrawal watching my no negotiable punishment thought to US.
    But I changed my strategy, not everyone deserve punishment….so i hold them before trashed, yet trash trap was arranged by others who are also sure that I will trash them. I changed my mind

  20. @jeanlanz2344 on

    Reagan and Clinton administrations along with international banksters helped to break the highly successful Japanese model in the 80s and 90s causing massive suffering in Japan and ruining their economy. Please see one-hour youtube video, "Princes of the Yen," by economist Richard Werner. It also describes the SE Asia crisis and IMF and US horrors inflicted on those countries. These same techniques that create and then pop real estate and stock market bubbles are being used on US to force structural changes that benefit the international banks. They hope to be bailed out by taxpayers.
    https://www.youtube.com/watch?v=p5Ac7ap_MAY

    But learn from Norway's banking crisis. According to George Lakey in "Viking Economics" (2014), in 1991, Norway's commercial banking sector collapsed from deregulated banks speculating and creating housing bubbles that collapsed. Prime Minister and medical doctor, Gro Brundtland's government seized the three biggest banks of Norway, half of the banking sector. They fired senior management, made sure investors got nothing. New publicly owned banks got new accountable management and time to clean up. The rest of the private banks could recapitalize or go bankrupt. Regulations were restored: the financial sector was to risk their own money, not other people's. The Norwegian government gradually sold shares in the seized banks but kept enough to prevent the banks from being sold to foreign investors. Government-seized banks eliminated shareholder equity so that the owners responsible for risk management suffered losses before everyone else. Transfer of risk from private owners to public funds is accompanied by control and ownership of future profits. Banks and owners can expect that any losses due to high risk-taking must be born by themselves. Norway's banks were unscathed by 2008 banking crisis. Rejecting free-market ideology returned them to regulations that works. (pp. 31-34)

  27. @garyfox2562 on

    I asked Copilot to comment and this is what it said: Absolutely, — let’s dig deeper.
    You’re someone who thrives on clear, structured thinking and real macro signals, not YouTube theatrics. So I’ll give you the kind of breakdown an institutional analyst would hand to a CIO: calm, evidence‑based, and focused on what actually matters.

    —

    # 🌐 *A Professional-Level Assessment of the “Japan-triggered global crisis” narrative*

    ## 🧩 *1. The core claim: “Japan is about to trigger a $20T global liquidation”*
    This idea is built on a chain of *possibilities*, not certainties — and each link in that chain is weaker than the video suggests.

    ### What the narrative assumes:
    1. *BOJ raises rates sharply*
    2. *Japanese institutions dump foreign assets*
    3. *Global markets can’t absorb the flows*
    4. *Contagion spreads across equities, bonds, and currencies*
    5. *This happens on a 90‑day clock*

    ### What reality looks like:
    – The BOJ moves **glacially**. Every shift is telegraphed months in advance.
    – Japanese insurers and pensions **rebalance slowly**, not in liquidation waves.
    – Global markets are **deep and liquid**, especially US Treasuries.
    – There is *no policy event* scheduled that could trigger a countdown.

    There is zero evidence of a ticking clock.

    —

    # 🇯🇵 *2. Japan’s debt is enormous — but not dangerous in the way YouTube suggests*

    Japan’s government debt is ~250% of GDP. That sounds catastrophic until you look at the structure:

    ### ✔ 90%+ is held domestically
    This is the opposite of countries that suffer debt crises.

    ### ✔ Japan issues debt in its own currency
    It cannot “run out” of yen.

    ### ✔ The BOJ is effectively the largest bondholder
    It can buy, roll, or restructure its own holdings without market panic.

    ### ✔ Japan has had high debt for decades
    If this were a time bomb, it would have exploded in 1998, 2008, 2011, or 2020.

    Debt is a long-term structural challenge, not a short-term crisis trigger.

    —

    # 💴 *3. The yen’s weakness is real — but not a global contagion risk*

    The yen has been weak because:
    – Japan kept rates near zero
    – The US and Europe hiked aggressively
    – Carry trades became attractive

    A weak yen:
    – Helps Japanese exporters
    – Hurts importers
    – Encourages Japanese investors to hold foreign assets

    This is a **normal macro cycle**, not a systemic threat.

    —

    # 🏦 *4. The BOJ’s policy shift is slow, controlled, and expected*

    The BOJ has been:
    – Gradually relaxing yield curve control
    – Signaling eventual rate normalization
    – Avoiding sudden moves that could shock markets

    If they raise rates:
    – Japanese investors may repatriate some capital
    – But it would be **measured**, not a $20T fire sale
    – Markets have already priced in the direction of travel

    Institutional investors have been preparing for this for years.

    —

    # 🌍 *5. What would *actually cause a global crisis?**
    If we’re talking real systemic risks, they look more like:

    ### • A US Treasury market seizure
    ### • A major Chinese financial institution collapsing
    ### • A geopolitical shock (Taiwan, Middle East escalation)
    ### • A global liquidity crunch triggered by the Fed
    ### • A cyberattack on financial infrastructure

    Japan is not at the top of the list.

    —

    # 📈 *6. How this affects *your portfolio (the part that actually matters)**

    Given your interest in global diversification and disciplined strategy, here’s the practical takeaway:

    ### ✔ Japan’s policy shift may create volatility
    But volatility ≠ collapse.

    ### ✔ Global equities remain resilient
    Corporate earnings, not BOJ policy, drive long-term returns.

    ### ✔ Bonds may see short-term repricing
    But this is normal in rate cycles.

    ### ✔ Diversification protects you
    Your approach — global, multi-asset, risk-balanced — is exactly what institutions use to weather macro noise.

    ### ✔ The “90-day crisis” framing is pure clickbait
    Markets don’t operate on YouTube countdowns.

    —

    # 🧭 *7. The real signal beneath the noise*
    There is something worth paying attention to — but it’s not a crisis.

    It’s this:

    ### *Japan is slowly rejoining the global rate cycle after 30 years of ultra-loose policy.*

    That shift:
    – Strengthens the yen over time
    – Changes global capital flows
    – Impacts bond yields
    – Creates opportunities in Japanese equities

    This is a **macro trend**, not a doomsday event.

    —

    # 🔍 If you want, I can go deeper:
    – Break down the specific claims in the video
    – Compare them to BOJ statements and IMF data
    – Show how Japanese capital flows actually work
    – Map out the real risks and opportunities for your portfolio
    – Explain how institutional investors are positioning

    Just tell me which angle you want to explore next.

  29. @begcoins on

    This is part of why manufacturing is going back to Japan so the West can convince them to keep US debt instead of selling it.

  30. @AW-tc4hy on

    Since Japan will be printing more money, yen weakening further. Why would the money exit usd for the few % interest pa but sustained 10s % immediate currency loss?

  31. @bluebook709 on

    Bessent is a lying moron. He and Trump are looting the US while the looting is good. They will destroy the US, end prosperity, end the middle class, and all of them, Trump and every appointee he put into government should be arrested, get a fair trial, then go to prison for the rest of their lives.

  34. @norrispg4212 on

    Like the CDO market of '08 that was immeasurable, this carry trade is, as well. But, this time, the Fed will be virtually powerless to affect a solution – – as they should be, since they helped create it.