Japan is currently sitting on $10 TRILLION in debt.
All Japanās yields just hit the highest levels ever recorded.
Bank of Japan calls an emergency monetary policy meeting.
Their economy is collapsing, and nobody is prepared for what comes next.
If Japan goes down, it takes the global financial system with it.
They only survived because rates were pinned near zero.
Now that anchor is gone.
As yields rise, the math turns violent.
Debt service explodes.
Government revenue gets eaten by interest.
No modern economy sustains this without pain:
ā Default
ā Restructuring
ā Or inflation
Pick your poison.
But hereās where it hits everyone else.
Japan owns trillions in foreign assets.
Over $1 trillion in U.S. Treasuries.
Hundreds of billions in global stocks and bonds.
They bought foreign assets because Japanese yields paid nothing.
Now Japanese bonds finally pay real yields.
After hedging, U.S. Treasuries actually lose money for Japanese investors.
This isnāt panic.
Itās math.
Capital comes home.
Hundreds of billions leaving global markets isnāt a slow adjustment.
Itās a liquidity black hole.
Then thereās the yen carry trade - over $1 trillion borrowed cheaply in yen and dumped into stocks, crypto, EM, anything with yield.
As Japanese rates rise and the yen strengthens, those trades blow up.
Forced selling starts.
Margin calls spread.
Correlations go to one.
At the same time:
ā U.S.āJapan yield spreads are collapsing
ā Japanese capital has less reason to stay overseas
ā U.S. borrowing costs rise whether the Fed wants it or not
And the Bank of Japan hasnāt even finished.
Another hike in January?
The yen spikes.
Carry trades unwind harder.
Global risk assets feel it immediately.
Japan wonāt print its way out this time.
Inflation is already hot.
Print more ā yen drops ā import costs surge ā domestic crisis.
Theyāre trapped between debt and currency - and the exit is closing.
For 30 years, Japanese yields were the invisible anchor holding global rates down.
Every portfolio since the '90s depended on it - whether investors knew it or not.
That anchor just snapped.
Stocks dump.
Bonds dump.
Crypto dumps.
This is how ānothing is wrongā turns into everything breaking at once.
The world is moving into a rate regime almost no one alive has traded before.
I warned you before Japan crashed the market last month.
And I'll do it again this time.
Make sure to follow before it's too late.
