Japan’s About To Trigger A Terrifying Unwind As China Begins Breaking U.S. Gold Market

Japan’s About To Trigger A Terrifying Unwind As China Begins Breaking U.S. Gold Market

So, by now we know the US dollar is facing an urgent crisis. Actually, the word crisis doesn’t even sum up how bad the situation is. The lower the dollar falls, a whole bunch of people will end up holding the bag. And this makes holding certain investments and assets a horrible choice and others a smarter option. And I want us to start off this madness by underlining how fragile the US economy is. The entire system is staffed of capital, especially the US government. Besson is going to dismantle banking regulations to get the banks to buy more US treasuries. >> 2008, 2009, 2010 financial rules were too tight. They have hamstrung the American financial system. But we have to take the financial system out of the straight jacket. this substantial increase in private credit which is outside of the regulated banking system that tells me that the the regulated system is too constrained and has not been able to compete. >> Now when you decide to let the chains off Wall Street and you allow the banks to run haywire, you are risking the entire stability of the system itself. It’s how we got into the 08 housing mess in the first place. Now essentially Besson wants to lower the capital requirements on banks for holding treasury bonds. In other words, giving Wall Street more reasons to buy US debt. It’s a ploy to tap money lying in the banks. The problem doesn’t really lie with the banks. The issue lies with US fiscal policy and there’s no stopping this spending train. In the July to September quarter, in just 3 months, Besson borrowed over $1 trillion. They are just burning through too much cash. The tariff income that is coming in just isn’t enough. Everyone is already apprehensive about loaning the US money because you are just playing musical chess and hoping a default doesn’t happen under your watch. But even the ratings agencies don’t agree with the situation of the debt crisis. Scope, which is a EU ratings agency, just downgraded the US from double A to double A minus. Now, this sounds like a small tumble down, but it affects how the world sees the US. Will they pay back the money or are we headed to a default scenario where the cash will have to be printed? The US is no longer the gold standard of creditworthiness. Even though Trump can arm twist the Fed to print dollars, the world already knows the playbook and deploy. As a result, the US is no longer in tier one countries. Places like Sweden and Norway are more trusted than the US. In fact, the US is just one step ahead of China, and Beijing has much more capital controls versus America. And here’s the problem with this. The harder the US falls in this rating, the harder it will be to sucker investors in. Yields will have to go up to bamboozle people in both domestic and foreign. And as we know, this just snowballs the debt to unpayable levels. is this situation that’s making Buffett panic. Now Buffett is pro- US markets all the way. To him, everything is awesome about the US and the S&P is the best investment of all time. But even he can’t deny the fiscal crisis and how it is pushing the dollar towards further collapse. >> And obviously we wouldn’t want to be owning anything that we thought was in a currency that was really going to hell. And that’s the big thing we worry about with the United States currency. I mean it the the tendency of a government want to debase its currency over time is fiscal policy is what scares me in the United States because >> if the dollar does continue to collapse the biggest losers will be bond holders. They will get diluted and depleted on the real basis. Currencies are the underlying asset of the bonds. So when the value goes down, the entire value of the bond also falls. Foreigners will start getting out of the bonds. US investors might not lose nominal value. But what happens when the currency falls? Suddenly imports start to cost more. So everything from Costco all the way to Walmart, they will start inflating even higher. Now major banks are starting to admit the dollar is going to fall even further in 2026. The reserve currency could fall by 3% on average by the end of 2026. Morgan Stanley says it will drop by 5% in the first half of next year. The Fed cards are going to make things worse. The problem the Fed faces is a world where other central banks are not exactly cutting at the same time. If every country is cutting rates, then maybe the dollar won’t fall that fast. But it’s just not the case. Thanks to Trump’s tariff war, inflation is back on the menu for many countries. The world is very disconnected from what the US does. Just because Trump wants to lower rates in the US doesn’t mean the whole world can do the same thing as well. The US needs to cut rates to support not just the national debt but the stock market as well. Let’s not forget that the entire system is so hyper financialized that to prevent a collapse, the dollar will need to be sacrificed. And the threat Japan poses is also becoming more real. It’s something we can’t ignore at this point. The Bank of Japan is going to make history on Friday. Everyone is expecting them to hike rates by 25 points to 0.75%. Now, this sounds like nothing, but it will be the highest level since 1995. This introduces two events which won’t be good for the dollar. When Japan hikes rates, this will strengthen the yen. So, local Japanese investors could flood back to local markets in droves. They could start buying back everything Japanese, especially local JGB bonds. Even Japanese stocks make sense because of the incoming stimulus from Tokyo. Now, the second crisis is the yen carry trade unwinding even further. And this trade is simple to understand. Investors will borrow money from a currency that has cheaper funding, which is the yen. They then pile into US dollar bonds, which yield more. It’s even better when the yen collapses and the dollar rises. It’s a double win for yen carry investors. And a big shout out to our sponsor today, Indigo Precious Metals. When it comes to buying gold and silver, I trust Indigo Precious Metals in Singapore. They have made investing in precious metals safe, fast, easy, and simple for both small and large scale buying. I’ve been stacking gold for over a decade now, and I’ve learned two things when buying. You want to buy authentic gold bullion, and you want to buy it at the lowest premium possible to stretch your dollars even further. And I’m glad to say I found both of this at Indigo Precious Metals. Indigo Precious Metals is a leading retailer in Singapore. They specialize in physical gold, silver, and platinum. They are my one-stop shop when it comes to buying bullion. Their prices are sharp, and they have the best brands on sale, and I can test the gold on the spot. So, if you’re looking to make your first gold purchase, Indigo Precious Metals is the best place to start. Whether it’s 1 oz or 1 kilo, this is the reputable dealer you are looking for. So, take action today. Click on the link below and enjoy a discount on your first purchase with the code shaun fu. Start your gold stacking journey today. But we are witnessing a big reversal on both the currencies and the bond yields. In other words, the incentive to buy US bonds and whole dollars is evaporating away. Now since 2025, the yen is slowly starting to appreciate against the dollar. He has gone from over 160 to 140 and bouncing around 150 today, but it’s getting stronger because the BOJ’s rate hike. Meanwhile, the interest rate difference between US treasuries and Japanese government bonds is closing. It went from over 4% before the Fed rate cuts to just 2% today. That’s a massive drop. Many investors in the yen cavary trade are already starting to lose money and god forbid getting into the yen carav trade now. All it takes is for the dollar to fall by another 2% you are instantly underwater. So investors especially those from Japan could repatriate their dollars back from the US to Japanese markets. Then we could observe a real unwinding of the US treasury market. Now inflation in Japan is such a problem that just one hike might not be enough and it spells doom for US assets. December’s rate hike might just be the first salvo. There could be at least two more rate hikes before the cycle was done. Rates in Tokyo could fly up to 1.25%. And if things get extreme, should inflation stay sticky in Japan, rates could reach 2.5%. Then things could hit the fan in US markets. The meltdown that we saw yesterday could continue for months to come. Money leaving the US is going to rock every part of the economy, especially the tax sector. The US tech bubble is so big that all it takes is for someone to sneeze and a house of cards come tumbling down. The blood buff we saw yesterday in tech stocks is a preview of what’s to come if money leaves. Oracle fell by another 5% and it’s now 50% down from the record high. Investors don’t believe the company can finance the debt and there’s a serious chance of default. Japan raising rates is going to make future financing harder for US companies. The cost of building those data centers is going to rise as Japan takes money out of the US economy. Bond yields will stay sticky or even rise. The Fed can cut rates to negative and it won’t make a difference at all. It’s all demand and supply at this point. Now, while this mess is playing out, China is getting out of dollars and they’re moving towards real money and of course we mean gold. China’s big stockpile of US bonds have been dropping month after month. Now, they helped the US during the ‘ 08 housing crash by absorbing the debt, but there’s now zero incentive left to help. Zero. And that’s what happens when you tariff China. You lay a ton of sanctions and you impose tech curbs on them. It’s full economic war and holding the bonds of your adversary doesn’t make sense, does it? Now, in 2025, China told the world they bought 25 tons of gold, but it’s probably much more. Global bank sock gen believes it’s 10 times more. So, 250 tons were in fact bought. China’s real reserves are also more than 2,300 tons. It’s at least 5,000 tons. Now, I personally believe it’s double that amount. China has too many avenues to buy in secret and they probably hold over 10,000 tons. Definitely much more than the US. But when it comes to gold accumulation, you don’t just want to buy from Western exchanges. Getting gold from the LBMA, Comx, and Switzerland is good, but you’re still relying on the G7 and France. Now the smarter way is to go around the world and buy up the mines themselves. Just like how the Chinese established rare of mines, they are building up their global gold supply chain. China Semok is moving to buy gold mines in Brazil for billion dollars. Semok is one of the biggest miners in China and they mine everything from copper to cobalt. Now the company is partially stateowned. So the Chinese government definitely has some influence over this. Getting full ownership of the mines in Brazil isn’t an accident. Just like how the US is planting their flag on Argentina with peasants bailout, China is building more influence in Brazil. Getting a supply of gold from Brazil is great, but establishing a physical presence there is even more important. Now, before Brazil, the same company went and bought out a Canadian company to mine gold in Ecuador. Once again, it’s a Latin American country. It’s not a coincidence here. But beyond just geopolitics, the more gold China controls, the bigger their influence gets on the global stage. It’s maybe the only way to break the dollar system. Now, China is on a gold discovery spree, and they just hit an incredible payload. In November, the Chinese government announced a massive fine in the province of Leoning. The deposit holds an estimated amount of over 1,400 tons of gold. That’s worth over $170 billion. It’s a big windfall when gold prices are already above 4,300 an ounce globally. Now, it should be mighty obvious what China is trying to do. They’re expanding their fiat currency to mine for real wealth. And as the US continues to debase the dollar, China will be accumulating gold. Now controlling the gold supply chain allows Beijing to boost their financial sector. They already helping foreign central banks store their physical bullion and the next step is to create bigger gold ETFs in the country. Now investors in November continues to buy into China gold ETFs. They bought in over $2 billion worth and added 17 tons into the vault. This is the big challenge China is throwing at the west. Most of the gold ETFs that we know of, the GLDS, the IAUS, they are all westernbased. The gold is stored in western vaults in New York and London. China is moving to break that. That’s why they’re going around the world to buy up gold mines and all the local discoveries are just as crucial. The more gold flows into China, the bigger their gold ETFs can grow independent of the West. and that denies investment money into Wall Street while it builds up capital in Shanghai. Now, even if the West decides to embargo gold to China, it won’t work. Just like in rare earth, the US is behind it ball. They’re just juggling too many things today to simply pay attention. But let me know what you think. Will Japan’s rate hike break US markets? And will China buy up even more gold mines? Let me know in the comments below. Stay safe. Be sure to smash the like button and subscribe as we navigate through this crazy times.

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Japan is about hike interest rates and this is a real threat to not just the US dollar, but US assets as well. Meanwhile China is moving to buy up gold mines around the world to corner the Western bullion market and further establish its own.

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