What is arbitrage and how are market makers/institutions using yield curve control to manipulate markets to steal all retail traders money? So Japan is manipulating the yield solely so institutions/banks/and markets makers can manipulate the market? How is that a free market?
Let me help connect the dots about Japan, and their situation: 1. Until recently, Japan's domestic economy didn't have inflation. It has been that way for a few decades. Think beyond their economic boom and bust. 2. Japan's citizens were big purchasers of the countries bonds, even at the low rates being paid. Call it patriotism, trust, and loyalty. This helped finance the government, and at the same time allowed it citizens to safely save for retirement. 3. As of now, Japan's population is aging and retiring. They are cashing in those bonds that they purchased before. With a dwindling population, there is a lack of people to keep on purchasing enough bonds to keep rates down. 4. This is why Japan for years has been encouraging their citizens living abroad, to return home and start families. They need to repopulate, in order to try to keep the game going. 5. Without the locals assistance with bond purchases, the Bank of Japan has to print new money, in order to purchase bonds, to keep rates low. That is a very big reason for the devaluing of the Yen. --Big Mike
" Encouraging their citizens living abroad to return home and start families." That would just kill their economy even faster. If Japanese citizens can find a living and start families abroad they will never return to the country. If what you said is true then one must wonder what kind of idiots suggested that idea.
@First name Last name folk who follow mainstream news, invest with no critical thinking or any deeper understanding of the economy. This they are easily manipulated, actually stabilizing the system.
@First name Last name people who lack critical thinking skills, they believe what politicians and the media tell them, and are surprised when things go tits up, even tho it was obvious
The Fed watching BoJ failing would cause the Fed to shrink its balance sheet even faster, No central banks would try to expand anymore. We know what it means to the market.
@First name Last name My understanding is this term is used to describe people that have no idea how much of a charade the world actually is. They believe the mainstream media religiously, believe the government wants what’s best for the people, believe that dollars are money and not just currency etc.
As someone who lives in Japan and gets paid in Yen I'm not delighted. However, when I arrived here 15 years ago it was around 125, I saw it go below 80 and back up. Like all the markets no one really knows where they are going. If the local government wants the yen to strengthen they can make it happen, but it's Japan so it take ages to pull the trigger .
I've been wondering for the past 10 years how on earth the Yen managed to hold out all this time against this endless central bank intervention. I guess this is that moment when it just can't go on any longer and the Yen finally dies.
ikr. Japan is the one in 50 nations to have got debt to gdp of > 120 or 130% to NOT default or have hyperinflationary collapse. Its weird that its been going on for so long.
They had a huge amount of savings. Their central bank has been openly discouraging it, but they just kept saving lol. They've been deleveraging. Their government can't even get rates low. Another thing is that their produce & culture is vastly spread around the world, & is in huuuuge demand. They tried creating inflation all they could, but their market they've built up after years of deflationary free markets allowed them to persist. Now it's catching up on them. They've created massive bubbles & malinvestments & now they're facing the consequences.
@@johnsmith4630 One of the best way to assess the stability of yen is their export. The demand of yen is strong because of the goods and services they export and its huge.
The whole country is collapsing in the long run, no resources, aging and declining population, decreasing competitiveness of its products and crazy amount of government debt...
To the ground!! Lmfao, the US has learned genius idea from Japan, which is printing money. Next, 1 dollar = 1 trillion dollar and for one coffee = 10 trillion dollar..
@@walden6272 You sound like me in 2012. Spending hours commenting on people, with zero returns. Then finally buying a few BTC and learning to relax throughout ups and downs. Go ahead and waste $20 on 'research' by buying some yourself. I'll never know/care if you did. Worst case you lose the 20. Best case you eliminate that gnawing sense of regret.
Usually when the canary dies, the people don't keep venturing into the mine. At this point God himself couldn't stop these morons from charging in head first.
I remember in the early 80s. The rate was $1.00=¥260. Than during 3/11 it was $1.00=¥73 I was getting passive income in USD. Currently, Living in japan, the inflation is not so bad compared to other countries. Currently not working but living comfortably with current currency rates.
Request...a similar video for the USD versus 1) the Euro, 2) the GBP, 3) the AUD, 4) the NZD, & 5) Bitcoin. What are the implications of another 6-12 months of devaluations versus the USD? What possible scenarios could unfold (systems blow up)?
Japan should open borders immediately and let tourists buy yen. Also they should work harder on helping their companies recover so as to rebuild their trade surplus asap. BOJ policy could only be sustained as long as people buy yen.
This situation is highly risky. It has spread contagion to other currencies. Weak currencies are being smoked by the dollar. This will lead to trouble in credit markets as lots of debt is issued in dollars. In Japan It is the first time on record that U.S. dollar debt has taken over as the primary currency of commercial debt and comes as Japan’s mergers and acquisition market starts to heat up after a long period of subdued corporate activity.
The US debt market dwarfs the US equities. It may even dwarf the US and Euro equities market combined. If the US debt market revisits the 2008 crisis, the entire system could crater far faster than the 1929-1933 collapse. It might implode by up to 90% in weeks not months. We would literally implode.
1) A ¥10.000 note 2) A ¥10.000 bond that pays 0% interest until it's automatically replaced by 1). And in the meantime can be bought and sold for exactly one 1).... How is swapping 1) and 2) back and forth anything but a pointless shell game?
Could be wrong. They have large government debt. It is possible that if interest rates in Japan are zero percent that the government has to pay next to no interest on most government debt. Problem could be that if interest rates go up the Japanese federal government might have to pay humungous amounts of money to pay interest due on federal government debts. They likely don't want to do that . So keeping things as they are causes value of currency to drop. Currency drop could make it cheaper for foreign countries to buy Japanese manufactured goods such as cars which might be good for Japanese economy. However manufacturers could say stuff this we want to get same amount of money in US dollars and other currencies for our cars. Or they could decide they want greater market share and to build and sell more cars. As in it could be the best opportunity Japanese manufacturers have had in decades.
Is there any exposure bridge between any of the $40T Deutsche Bank derivatives held on that bank’s balance sheet and Japan? Could be a spark on top of a barrel of gas if there is.
What's the implications of Japan fails in their yield curve control? Obviously it has to be really important that they are willing to pay a huge price in sacrificing their currency.
The government wont be able to afford to pay interest on their bonds. Therefore they have to raise taxes, cut government spending, or have their central bank monetize all the debt which will cause a collapse in their currency. Theyve chosen the latter as of now as their central bank pledged to buy an unlimited number of government bonds to keep the 10 year yield at .25%
All currency is failing worldwide! It's because the economy is collapsing do to world debt. It needs to fail before we can fix it...I know it's going to suck!
great video thank you! What I do not understand: why would anyone even buy negatively yielding bonds and not hold cash on the bank account? And what is the interest of keeping it at 0? Would Japan go bankrupt if it went up?
I would assume, they are not buying negative yielding bonds for the negative yield but rather looking for appreciation of the bond. That is how they would make their money.
If you have a billion dollars and don't want to invest in anything too volatile you can't just hold it in the bank because if the latter fails you lose the lot. You therefore buy safe government bonds and the safer the bond the lower the interest rate and in many cases the yield is negative (Japan, Germany etc). With low inflation that's not such a problem but as it rises holding negative yielding bonds (no matter how safe) is much less attractive because the purchasing power is being destroyed, hence the sell off.
Japan has an aging population/bad labor force demographics and high debt/gdp (but owned internally). They have one of the best workforces though, and low crime/good infrastructure. I'm interested in what happens to Japan's economy. Not sure how it plays out but they are basically 10-20 years ahead of US.
With interest rates rising, a lot of companies could be too leveraged to pay off debt. Could this cause a major crash in assets if they have to sell off what they have to pay off debt? Would gold stay strong or drop off through this?
Dumb question but why do they care what yield is? Is it because if it's too high they won't be able to borrow more at low rates if secondary market has higher rates?
Japan's citizens were big purchasers of these bonds. It helps finance the government with a near 0% loan. If rates were higher, Japan wouldn't have had a near 0% inflation domestic economy for the last two decades.
Isn't a falling JPY a good thing for Japan though? Their imports are now expensive, so they could finally have some inflation. And their industries are mostly exports and a low JPY helps a lot.
China has been borrowing Japanese Yen at 0% and exchanged to USD for investment abroad for Belt and road initiative which caused lost of interest income in hundreds of billions for the US federal reserve. Japan has currency swap deal with the US and their debt ratio is at 260% of their GDP thus Japanese federal bank kept their 10 years bonds at minus 0.1 to 0% or else they can't pay their debt. Washington must stop currency swap deal with Japan to stop China and Japan must compensate Washington in hundreds of billions of interest income lost.
Get $10 of Free BTC with Swan Today bit.ly/swnhrsy
Bitcoin is dual legal tender in Japan since 2017. They can save and spend in Bitcoin without incuring any taxes.
It’s about time you do another Bitcoin video. It’s the only option in a digital world that everyone can participate in.
Interesting Mississippi history lesson
What is arbitrage and how are market makers/institutions using yield curve control to manipulate markets to steal all retail traders money? So Japan is manipulating the yield solely so institutions/banks/and markets makers can manipulate the market? How is that a free market?
Living in Japan, the yen has been dropping consistently over the past 2-3 months, this helps to explain.
@@james6401 yes
If you're living in Japan and receiving your income in dollars then you just got a huge boost in purchasing power.
Let me help connect the dots about Japan, and their situation:
1. Until recently, Japan's domestic economy didn't have inflation. It has been that way for a few decades. Think beyond their economic boom and bust.
2. Japan's citizens were big purchasers of the countries bonds, even at the low rates being paid. Call it patriotism, trust, and loyalty. This helped finance the government, and at the same time allowed it citizens to safely save for retirement.
3. As of now, Japan's population is aging and retiring. They are cashing in those bonds that they purchased before. With a dwindling population, there is a lack of people to keep on purchasing enough bonds to keep rates down.
4. This is why Japan for years has been encouraging their citizens living abroad, to return home and start families. They need to repopulate, in order to try to keep the game going.
5. Without the locals assistance with bond purchases, the Bank of Japan has to print new money, in order to purchase bonds, to keep rates low. That is a very big reason for the devaluing of the Yen.
--Big Mike
With the falling yen, higher oil imports are a double whammy. How are they dealing with that issue?
I see, now i understand that i am a cave men tier when it's come to economy, i should start learning about investment
" Encouraging their citizens living abroad to return home and start families." That would just kill their economy even faster. If Japanese citizens can find a living and start families abroad they will never return to the country. If what you said is true then one must wonder what kind of idiots suggested that idea.
The JPY could very well be the first domino to fall causing the exact same problem for the US bond market.
@First name Last name folk who follow mainstream news, invest with no critical thinking or any deeper understanding of the economy. This they are easily manipulated, actually stabilizing the system.
@First name Last name people who lack critical thinking skills, they believe what politicians and the media tell them, and are surprised when things go tits up, even tho it was obvious
Maybe but my bet is Get many first to go over "cliff"!.
The Fed watching BoJ failing would cause the Fed to shrink its balance sheet even faster, No central banks would try to expand anymore. We know what it means to the market.
@First name Last name My understanding is this term is used to describe people that have no idea how much of a charade the world actually is. They believe the mainstream media religiously, believe the government wants what’s best for the people, believe that dollars are money and not just currency etc.
As someone who lives in Japan and gets paid in Yen I'm not delighted. However, when I arrived here 15 years ago it was around 125, I saw it go below 80 and back up. Like all the markets no one really knows where they are going. If the local government wants the yen to strengthen they can make it happen, but it's Japan so it take ages to pull the trigger .
I've been wondering for the past 10 years how on earth the Yen managed to hold out all this time against this endless central bank intervention. I guess this is that moment when it just can't go on any longer and the Yen finally dies.
ikr. Japan is the one in 50 nations to have got debt to gdp of > 120 or 130% to NOT default or have hyperinflationary collapse. Its weird that its been going on for so long.
They had a huge amount of savings. Their central bank has been openly discouraging it, but they just kept saving lol. They've been deleveraging. Their government can't even get rates low.
Another thing is that their produce & culture is vastly spread around the world, & is in huuuuge demand. They tried creating inflation all they could, but their market they've built up after years of deflationary free markets allowed them to persist.
Now it's catching up on them. They've created massive bubbles & malinvestments & now they're facing the consequences.
@@johnsmith4630 One of the best way to assess the stability of yen is their export. The demand of yen is strong because of the goods and services they export and its huge.
Great Video! We are teetering on the edge of disaster and I’m not sure the FED can control this one without the system blowing up.
*Thanks for watching send a direct message right away on the above number for more enlightenment:••*
The whole country is collapsing in the long run, no resources, aging and declining population, decreasing competitiveness of its products and crazy amount of government debt...
Once again, a fabulous macroeconomic review backed up with empirical evidence. Thank you.
Excellent narration and explaining!
Very helpful information on the Japan situation.
another excellent and clear explanation! I understand a lot of economics and especially stocks, but bonds were always a little foggy for me.
They have the highest debt in the world. Their economy has been in a downfall since 1992.
Their Economy started to go downhill when I graduated high school in 1989. They haven't recovered since.
And, they do not allow foreigners to own government debt. Can you imagine if the US did that?
To the ground!! Lmfao, the US has learned genius idea from Japan, which is printing money. Next, 1 dollar = 1 trillion dollar and for one coffee = 10 trillion dollar..
I am going to be rich
The main diff is Japan stability in politics and real estate. Plus most fitted population. All elements opposite in US
Great explanation of this topic. Thank you!!!
Thank you. I’ve been a Japan watcher for nearly 15 years. I was wondering if anyone was going to cover this.
u should run a TH-cam channel during ur spare time
Yea at this point I can only buy BTC, all the other securities are more risky. Never thought I'd say that.
If you buy BTC now, then you'll be the sucker. This ponzi scheme is coming to an end.
@@walden6272 You sound like me in 2012. Spending hours commenting on people, with zero returns. Then finally buying a few BTC and learning to relax throughout ups and downs. Go ahead and waste $20 on 'research' by buying some yourself. I'll never know/care if you did. Worst case you lose the 20. Best case you eliminate that gnawing sense of regret.
Silver and Gold
Excellent presentation. Once again you made the complicated easy for me and my golden retriever to understand.
The BoJ appears to be the canary in the coalmine for inevitable risks of MMT.
Yea
proponents of MMT will just claim they didn't do it right... .... lulz
Usually when the canary dies, the people don't keep venturing into the mine. At this point God himself couldn't stop these morons from charging in head first.
Thanks buddy
Thanks!
great explanation showing how interest rate rises in the west is related to development debt in the east.
Thanks Joe
*Thanks for watching send a direct message right away on the above number for more enlightenment:••*
I remember in the early 80s. The rate was $1.00=¥260. Than during 3/11 it was $1.00=¥73 I was getting passive income in USD. Currently,
Living in japan, the inflation is not so bad compared to other countries. Currently not working but living comfortably with current currency rates.
Japanese are amazing people nowdays, despite some flaws in their culture. Hope for the best for their people.
The global Empire of Debt
Cheaper for my daughter to go to Japan this summer to start school! YES!!
Request...a similar video for the USD versus 1) the Euro, 2) the GBP, 3) the AUD, 4) the NZD, & 5) Bitcoin. What are the implications of another 6-12 months of devaluations versus the USD? What possible scenarios could unfold (systems blow up)?
This is the most important video anyone could watch right now.
Very much so
Joseph Wang explains this much better
Excellent analysis. Very clear explanation and good charts. Great info.
You are an excellent teacher! Thanks for sharing your gift.
You can’t turn lead into gold OR nothin from nothin leaves nothin
Looks like Japan has had enough Federal Reserve milkshake.
I'm dead! You sir, are a funny person!😆😆😆
You look like Shane Dorian.
Thanks for the update
Japan should open borders immediately and let tourists buy yen.
Also they should work harder on helping their companies recover so as to rebuild their trade surplus asap.
BOJ policy could only be sustained as long as people buy yen.
...they should, but that's not how the plan is written.
This situation is highly risky. It has spread contagion to other currencies. Weak currencies are being smoked by the dollar. This will lead to trouble in credit markets as lots of debt is issued in dollars. In Japan It is the first time on record that U.S. dollar debt has taken over as the primary currency of commercial debt and comes as Japan’s mergers and acquisition market starts to heat up after a long period of subdued corporate activity.
Great video as always!
The US debt market dwarfs the US equities. It may even dwarf the US and Euro equities market combined. If the US debt market revisits the 2008 crisis, the entire system could crater far faster than the 1929-1933 collapse. It might implode by up to 90% in weeks not months. We would literally implode.
Get ready now
I believe U.S. debt Mkt is abt 20% larger than the equity mkt. $46 vs $40 trillion.
i did notice that jp yen was going down in value and this explained a lot
great video! What happens if say Japan increases yield curve control to 0.75? What would happen to the yen?
Perfect explanation of what happens when money printing finally catches up with you.
Japan has a huge debt to GDP ratio. I was wondering what would happen. The fit may be hitting the shan.
@@christianlibertarian5488 yea
Basically, will see inflows into USD.
I guess many Japanese companies have better P/Es than US companies…..
fantastic explanation, thank you!
good breakdown👍
Absolutely love your “end the Fed” cup !!!!😂😂😂
Nice Purple line call!
Great Video like all you videos.
1) A ¥10.000 note
2) A ¥10.000 bond that pays 0% interest until it's automatically replaced by 1). And in the meantime can be bought and sold for exactly one 1)....
How is swapping 1) and 2) back and forth anything but a pointless shell game?
Could be wrong. They have large government debt. It is possible that if interest rates in Japan are zero percent that the government has to pay next to no interest on most government debt. Problem could be that if interest rates go up the Japanese federal government might have to pay humungous amounts of money to pay interest due on federal government debts. They likely don't want to do that . So keeping things as they are causes value of currency to drop. Currency drop could make it cheaper for foreign countries to buy Japanese manufactured goods such as cars which might be good for Japanese economy. However manufacturers could say stuff this we want to get same amount of money in US dollars and other currencies for our cars. Or they could decide they want greater market share and to build and sell more cars. As in it could be the best opportunity Japanese manufacturers have had in decades.
So the FED is about to lose a copilot in it's war?
*Thanks for watching send a direct message right away on the above number for more enlightenment:••*
Well explained sir
You are an EXCELLENT teacher !!! Thank you so much.
Is there any exposure bridge between any of the $40T Deutsche Bank derivatives held on that bank’s balance sheet and Japan? Could be a spark on top of a barrel of gas if there is.
It's tough living in a bad neighborhood, with bad neighbors.
Another cool thing about Swan is they don’t have a sell button. Lol
I never see Joe so happy as when he's talking about the world blowing up
Reminder to report everyone in the sophisticated “spam conversations” involving many fake users, usually talking about specific financial advisors.
You do a great job explaining things.
Great analysis...
What's the implications of Japan fails in their yield curve control? Obviously it has to be really important that they are willing to pay a huge price in sacrificing their currency.
The government wont be able to afford to pay interest on their bonds. Therefore they have to raise taxes, cut government spending, or have their central bank monetize all the debt which will cause a collapse in their currency. Theyve chosen the latter as of now as their central bank pledged to buy an unlimited number of government bonds to keep the 10 year yield at .25%
Thank you! you are my number 1 financial adviser!!!!
Thanks, great job.
I love when horizontal lines just show up on tradingview from years ago. It's like my hard work from many years ago is paying off.
wow thanks
Love the coffee mug waving... might help the brain dead get the message! Cheers from the land down under. 🤣😂
The tyrannical land Down Under!
Peter Schiff told us this about 2 weeks ago
"Where Is Gonzalo Lira?!!" Truth Above All Else!
Thanks for watching
Hit me up there 👆
There are Profitable nods and patterns I'd love to show you🚀
The people who watch your videos know what a bond is.
Bum Bum Bum!!!! 👏🏾🎶 Another Bites The Dust🎶
Great vid
now is time to buy JPY.
at what point does a currency become worthless when the gov central bank is the only buyer of their own product?
Good question. I guess we will find out.
All currency is failing worldwide! It's because the economy is collapsing do to world debt. It needs to fail before we can fix it...I know it's going to suck!
great video thank you!
What I do not understand: why would anyone even buy negatively yielding bonds and not hold cash on the bank account?
And what is the interest of keeping it at 0? Would Japan go bankrupt if it went up?
I would assume, they are not buying negative yielding bonds for the negative yield but rather looking for appreciation of the bond. That is how they would make their money.
If you have a billion dollars and don't want to invest in anything too volatile you can't just hold it in the bank because if the latter fails you lose the lot. You therefore buy safe government bonds and the safer the bond the lower the interest rate and in many cases the yield is negative (Japan, Germany etc). With low inflation that's not such a problem but as it rises holding negative yielding bonds (no matter how safe) is much less attractive because the purchasing power is being destroyed, hence the sell off.
@@stumac869 I would think that, if the banks failed, the government is failing.
Pensions…
The more they print the less it's worth period point blank.
Japan has an aging population/bad labor force demographics and high debt/gdp (but owned internally). They have one of the best workforces though, and low crime/good infrastructure. I'm interested in what happens to Japan's economy. Not sure how it plays out but they are basically 10-20 years ahead of US.
That does not take into account inflation if it exists in Japan.
US bonds looking real attractive now!
I don’t understand why anyone would buy a bond yielding nothing. Japan is a debt bubble starting to burst
That's a how bad the Japanese markets are. Even with a near 0% bond yield its still better than putting into the Nikkei and getting a negative return.
Couldn’t help but notice the Ayn Rand on the shelf.
Who John Galt?
Prophetic times my friend.
Huge fan of the channel!
With interest rates rising, a lot of companies could be too leveraged to pay off debt. Could this cause a major crash in assets if they have to sell off what they have to pay off debt? Would gold stay strong or drop off through this?
Very informative video thank you
HOLY SHIT! THE PURPLE LINE!!! JOE NUKED JAPAN...
Bitcoin and stocks are bearish...... proceed with caution.
You're such a great teacher, easy to digest explanation 🙏 #BuyBitcoin
Dumb question but why do they care what yield is? Is it because if it's too high they won't be able to borrow more at low rates if secondary market has higher rates?
Japan's citizens were big purchasers of these bonds. It helps finance the government with a near 0% loan. If rates were higher, Japan wouldn't have had a near 0% inflation domestic economy for the last two decades.
Isn't a falling JPY a good thing for Japan though? Their imports are now expensive, so they could finally have some inflation. And their industries are mostly exports and a low JPY helps a lot.
but what about raw materials? Oil? Iron? Since Fukushima things in the energetic sector became more expensive
Except energy imports are a double whammy for them. Higher oil price and a crashing yen, yikes!
Japan is not a manufacturing power house anymore, they have moved to ASEAN and China, even japanese companies
it's called external inflation(bc of currency devaluation), what Japan needs is internal inflation
if this is the case, how come japan still has stagflation?
Did Bank of Japan get a secret bailout last year???
The CAD Has been tearing the Yen a new bunghole since last week
People keep saying that the dollar is strong. It’s yen and euro weakness. Our currency in the US is just as much up shit creek as those two
All currency is shit show
Two years later
Should've shown a gold to yen graph 📈
LOL at Technical Analysis is "DUDU".
It is no wonder why the U.S. dollar is so strong. It is compared to these other very weak currencies!
Great explanation! Very clear!
btc! btc!
China has been borrowing Japanese Yen at 0% and exchanged to USD for investment abroad for Belt and road initiative which caused lost of interest income in hundreds of billions for the US federal reserve. Japan has currency swap deal with the US and their debt ratio is at 260% of their GDP thus Japanese federal bank kept their 10 years bonds at minus 0.1 to 0% or else they can't pay their debt. Washington must stop currency swap deal with Japan to stop China and Japan must compensate Washington in hundreds of billions of interest income lost.
Really interesting presentation. Thanks for sharing. Mahalo !