Japan Bonds COLLAPSE, US Downgraded (Silver Is Breaking Out)

Japan Bonds COLLAPSE, US Downgraded (Silver Is Breaking Out)

Hey everybody, Smarts Silver Stacker here. Hope you’re doing well. So, the global debt market appears to be on the verge of collapse following a US credit rating downgrade by Moody’s. This all kicked off last Friday and so I’m going to bring you up to speed and discuss how this impacts the precious metals. Right now, we’re looking at the chart of silver, which appears to be breaking out of this symmetrical triangle pattern, which began in late March and includes the liberation day selloff. It’s been this consolidation going on for a month plus, but following the price action of yesterday and today, it does seem to be breaking out to the upside. Now, there’s some other formations on this chart that I want to go over in today’s video, but we’ll come back to this in just a moment. Now, today’s video is brought to you by SD Bullion. They’re the channel sponsor. Right now, they have a really solid deal. You can get junk silver at spot, 90% US silver half dollars. Now, you might have seen this yesterday and been able to buy these at a cheaper price if you’re a subscriber to my newsletter because I sent out a price alert regarding this. It’s not every day that you can pick up silver at spot in unlimited quantities from a reputable dealer. And not only that, it’s one of my favorite coins to stack. If you’ve been watching the channel for a while, you know that. I want to touch on a few points related to junk silver in this video as well. But first, let’s just get down to the debt crisis situation that is playing out in the US and globally. We’ve got US Treasury yields spiking. We’ve got Japanese bonds, the yield on those are spiking to the highest on record. And this all started on Friday when Moody’s, the rating agency, downgraded the US credit rating. And why did they do that? Well, let’s just listen to them in their own words. This is from their press release. This one-notch downgrade on our 21 notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns. So what they’re saying here is that other countries who have debt burdens similar to the US have a lower credit rating than we have and so they’re not going to give us a pass on this any longer. And they went on to say, “Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest cost. We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration over the next decade. We expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent large fiscal deficits will drive the government’s debt and interest burden higher. The US fiscal performance is likely to deteriorate relative to its own past and compared to other highly rated sovereigns. And you know, to kind of sums it all up, there’s a budget bill in front of Congress right now, and this is what Deutschbank economists had to say about it. In short, there appears to be no serious effort at reigning in historically elevated deficits, which remain on track to exceed over 6% of GDP in the coming years. And I know there’s been a lot of talk with Doge and cutting back on waste, fraud, and abuse. But the reality is that without cutting into core entitlement programs in the US budget such as social security and Medicare and without reducing the defense budget which you know this year we got the first defense budget officially over a trillion dollars. So none of those costs are coming down without cutting those there’s really no way to solve the problem. It’s just mathematics. It’s not you know one party versus the other. I know people are upset because they paid into these things, but math just isn’t mathing when it comes to the entitlement programs. It’s politically unviable to cut those, so it’s not going to happen. Now, following that, Moody’s downgrade, here’s some of the fallout from that. The 30-year Treasury yield in the US went above 5%. Now, this headline is from Monday, and it says it briefly went above that, but let’s go and take a look at where yields are at. No matter how high the yield on US treasuries goes, I’m not particularly interested in buying government debt. But at the United Precious Metals Association, you can earn interest on your gold paid in gold through a goldback lease. Find out more at upma.org. Link down in the description. So, right now the 30-year is back above 5%. Right now, it’s at 5.08%. And that 5% level is somewhat important. So this is the 5% level right here. And as we were approaching that level back on April 9th, that was the day you might recall that Donald Trump announced a reversal or a pause to the reciprocal tariffs and he gave the markets some relief. That was the day we saw a big rise in the stock market and a recovery in the stock market following the liberation day selloff. Well, at that time as the yield on the 30-year Treasury was rising, one of the things that Donald Trump had said concerned him about the markets was that the bond market was becoming a little I forget the exact verbiage he used, but he basically said that the bond market was becoming a point of concern. And we did get a recovery in US stocks following that reversal. And initially we had this sort of recovery in yields as the treasuries were catching a bid. But as of the beginning of May, yields have been on the rise again. And then that Moody’s downgrade seems to have accelerated that rise. And it’s not just in the US. This is not just a US problem, although rising treasury rates in the US certainly is a problem. In Japan on Tuesday, you saw this huge surge in Japanese government bond yield. The Japanese 20-year bond, the yield rose 15 basis points to the highest level since October of 2000. And then their 30-year and 40-year bonds both surged to record all-time high yields. So, the Japanese bond market now getting killed following this initial surge in the US debt market. And there’s a few second and third order effects that we need to think about here when it comes to surging bond yields, especially in these massively indebted economies like Japan and like the US. The first is that these higher yields are going to lead to higher debt servicing costs. So in the US we are already facing essentially an exponential curve of interest payments on the national debt. This is from the Federal Reserve of St. Louis Fred the federal government current interest payment expenditures and you can see that following the 2020 COVID crisis this has absolutely ballooned rising from a low in 2020 of $58 billion annually in debt services. As if that’s not bad enough, it rose to the most recent number from quarter 1, 2025 of $1.11 trillion. And the higher these interest rates on US government debt and Japanese government debt, the higher the cost of these governments to service the debt becomes. And that can quickly turn into a very vicious cycle. Those higher debt service costs, those are part of your budget, right? So if those begin to crowd out the other spending and you’ve got more tax revenue diverted towards paying the interest on the debt, then that leads to higher deficits because you have to borrow to actually pay for the real spending at that point on the entitlements and other programs. So this can very quickly become a vicious debt cycle and that appears to be what we are approaching. Now, another thing to consider here as you’ve got bonds surging to record all-time highs, the yields on these bonds rather, but the bonds themselves are crashing. Then, if these aren’t the safe havens, the the government debt, then what is the safe haven? Well, my bet is on the precious metals. But this crisis is becoming so serious, the Japanese prime minister has now said that the country’s fiscal situation is extremely poor. and he says that it’s worse than Greece’s. And he’s referring to Greece during their debt crisis from 2009. And so that is an extremely dire warning from the prime minister of Japan saying that their fiscal situation is worse than that of Greece. You might remember that debt crisis in Greece. They required bailouts, debt restructuring. It was a huge problem and Greece is a much smaller economy than Japan. And another factor that we can’t ignore here is that Japan is the single largest holder, the foreign holder of US treasuries. As of March of this year, according to the most recent data from the Treasury, Japan holds $1.13 trillion in US debt. So what happens in Japan is very relevant to US debt markets. And you know the other thing we got to worry about here is inflation because the central banks right now are backed into a corner. You’ve got slowing global growth. In fact, in the first quarter, the Japanese economy shrank. Yet, central banks are sort of powerless to intervene because if they try to intervene and stimulate the economy by bringing rates down, they do that via QE and buying up bonds, then that means that inflation is going to get unleashed and inflation remains elevated and there’s a lot of weariness about rising prices and how politically viable Fed intervention is going to be or central bank intervention in the case of Japan. can the reality is that central banks and governments acting in unison have in the past almost always opted to inflate and that’s likely what’s coming here in the US as the national debt approaches $37 trillion and there’s essentially no will in Washington to cut entitlement spending. We’ve been told repeatedly by President Trump and other politicians that those benefits are sacrosync. They won’t be cut. So, it’s probably going to turn out like Allan Greenspan told us. And we can guarantee cash benefits as far out and whatever size you like, but we cannot guarantee their purchasing power. The benefits are going to get paid, but the there’s no way you’re going to be able to guarantee the purchasing power of the currency that they are paid in. Now, back to the 90% junk silver. I sent this newsletter out Monday when that deal was first announced. It wasn’t a sponsored email or anything. I just thought it was a deal that stackers should be aware of. Now, if you want to get price alerts like that, sign up for my newsletter with the link down in the description, but I covered a few reasons why I think this was a deal worth taking advantage of. Now, the first one was just that, you know, spot silver at spot price, no-brainer, right? No quantity limits. It’s on 90% junk silver. Great. Uh the other things though are that the times are still tough, right? We’re already facing inflation. And the reason that these coins are available at spot is because people who hold these old coins are selling their silver to make ends meet. And silver has gone up. I mean, it’s higher than it was several years ago. So maybe it’s not the worst time to sell if you’ve got to pay bills. But to me, it’s still the most undervalued asset on the planet. And I’m happy to take the flip side of that trade and do what others appear not to be doing, which is stacking metals during a time of unprecedented financial uncertainty. Sentiment for physical silver clearly must be relatively low among the public because otherwise you wouldn’t be able to buy junk silver at spot. But once sentiment flips, that can change very rapidly. All it takes is one financial crisis to trigger a sudden demand for physical metal. And the supply of junk silver has been shrinking. Hasn’t been minted since 1964. So, it’s a very limited supply. I’ve made videos about how limited that probably is in the past. I’ll put a card up on the corner so you can check those out if you want to. In March of 2023, when we had banks failing, the premiums on junk silver shot up to 50 to 60%. So the fact that there’s literally no premium over spot right now makes it a steal I think. And when you observe what’s happening in the global debt market, remember what caused Silicon Valley Bank to fail? It was rising yield on US treasuries. Because as the yield on newer treasuries goes up, then that means existing issues lose value. As bonds are selling off, the yield goes up. So the balance sheet of many of these financial institutions as yields rise become significantly weaker. There’s a number out there. We don’t know what that number is, but once the yields hit that number, banks start to fail. The Fed is going to have to intervene and print a lot of money. And when that event takes place, there’s probably going to be a big demand for physical silver. Just speculation, not financial advice. I’m just telling you my thoughts, but it is where I’m putting my money. So, let’s finish up by examining some additional formations on the silver chart. Silver appears to be breaking out of this triangle, which goes back about a month or so, a little over a month. Now, if we zoom out, there’s a few other patterns to take a look at here. The first being this large ascending triangle, which goes back about five years. It goes back to the COVID sell-off lows and the recovery from that level. And this is a very bullish formation because what you’ve got here is higher lows and higher highs converging together. And so to break out of this formation, which would be a very bullish development for the silver price, we would need to get a close above 36 bucks. So, if you see a solid close above $36 on the silver spot price on significant volume, then I think it’s safe to say that you can take that as an indicator that silver is getting ready to make a big move to the upside. And then I’m going to switch to the weekly chart and I want to examine the other very bullish formation on the silver chart, the long-term cup and handle that dates back to 1980 and those 1980 highs. You can see the handle of that is around 50 bucks. So that 36 level is sort of an intermediate target for silver’s bull market. To get the really big move though to the inflation adjusted all-time highs and the big move that silver stackers have been looking for for some time now, we’re going to need to see silver rise above 50. But if it does that, if we get a close above 50 bucks, there’s really very little overhead resistance because it will be uncharted territory. And given that this will likely be occurring against the backdrop of a global debt crisis and a financial crisis, there’s going to be a lot of interest in the precious metals as safe havens. And yeah, gold has already been performing very well. I think gold is going to continue to perform well. But if you look at even just recent examples like the March 2023 financial crisis, you can see that there’s going to be a tremendous interest for physical silver specifically. I mean, at that time, the silver eagle would trade for sometimes double the spot price of silver. And I expect the real debt crisis, which we may be approaching in short order. You’re going to see that market paradigm, but on steroids. So, leave me a comment down below to let me know what you think about silver’s breakout. How high are we headed from here? Are we around the corner from a major debt meltdown? Thanks for watching everybody. Stay safe and happy stacking and I will catch you next time.

Moody’s just downgraded the U.S. credit rating, 30-year Treasury yields hit 5%, and Japan’s bond market is flashing red. Yields on Japan’s 30- and 40-year bonds just hit record highs—and their own PM is warning of a crisis worse than Greece in 2009. What does this mean for the global economy, and how can you prepare?

Plus, a rare deal on 90% U.S. silver coins at spot price—details inside.

#silver #debtcrisis #gold #usdebt #japan #moodysdowngrade #junkSilver #economy #preciousmetals #finance

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