The story of the week last week was not Greenland or Davos drama, but Japan.
Japanese bonds fell to their lowest price in history. When prices fall, yields rise. Traders in New York and elsewhere globally are unwinding their “carry-trade” bets.
So, too, the Bank of Japan:
Lower demand for Japanese bonds is pushing prices down and yields higher rapidly. (Source: Bloomberg)
The Bank of Japan’s holdings of its own government’s bonds are now near a 10-year low.
The yen carry trade has been a constant in global finance for 3 decades. Currently, the unwind is throwing the Japanese government into a crisis of historic proportions.
Americans take note. Not only are Japanese bonds undermining the AI rally on Wall Street. The crisis is a cautionary tale for the U.S. efforts to finance its own historic debt load.
~ Addison
P.S. Yesterday’s Grey Swan Live! with Joel Bowman — our “man on the scene” in Buenos Aires since before President Milei got elected – helped us rummage through collectivist politics… also a harbinger of things to come in the U.S. if New York’s Zohran Mamdani becomes the face of the Democratic Party in the midterms.
Joel also gave us a fresh primer on Investing At the End of the World as the Argentine market rapidly becomes deregulated and open for foreign investment in the country’s vast natural resources.
The replay will be up on the site for members soon.
Later today — Friday, at 1 p.m. ET – Nick is back to help us cut your IRS tax bill in 2026.
Our guest Nick Buhelos is going to walk us through simple steps on how you can:
- Unlock 250+ deductions you currently can’t access.
- Apply trading losses to other income (W2, 1099, even your spouse’s).
- Shield your personal finances from trading risk.
Stay tuned for more details on how to join us on Friday at 1 p.m. ET.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three.
