Japanification Is HAPPENING In The US—And No One Is Ready! (Uncut) 02-02-2025
Japanification Is HAPPENING In The US—And No One Is Ready!
I’ve been telling you guys for a very long time that Japan has been showing the world how to pull out of a deflationary spiral. And we can all see that central banks do not like deflation. Deflation are prices going down.
So it could be a stock market implosion, a real estate implosion, etc. So they’ve been fighting that using interest rates to do that, right? When inflation is running too hot, what do central banks do? They raise the interest rates to discourage borrowing and spending. When deflation is running hot, what do they do? They drop interest rates, they lower them to inspire that inflation of that borrowing and spending.
But what happens when it doesn’t work? And Japan’s been at this since the early 90s when their big debt bubble burst. Hmm, let’s talk about that today. Because you might recall that back in August, there was a major rout in the global markets because the yen carry trade was unraveling as their central bank raised rates a quarter of a percent.
Now, the yen carry trade or any carry trade, doesn’t matter what currency it’s in. You borrow in the weaker currency, and then you take that money and you buy something in a stronger market with a stronger currency. When they raise, when central banks raise rates, then in theory anyway, that attracts more buyers of their currency, and that’s what supports the currency.
And vice versa, when they lower rates, that weakens the currency. So let’s go back and just start with August and see what happened when the Bank of Japan attempted to raise the interest rates, and then they had to walk everything back because of the violent reaction in the markets. The yen’s fluctuations matter because the currency has long provided a cheap source of funding for global investors, even as other central banks raised their borrowing costs.
In other words, raised interest rates, the Bank of Japan was unable to do that. So their yen, their currency, was very, very weak. We’ve talked about this before, a disconnect between the central banks, some raising it, some lowering it, some keeping it the same.
But what that does is it makes that carry trade more expensive, forcing traders to liquidate their positions. And that creates that volatility and a lot more risk. And this is right now primarily, I mean, one day it’s risk on, one day it’s risk off, but that is creating a whole lot more volatility.
And let me show you what that looks like a little bit more. Why did the yen weaken? Because, and this is a gap, the US dollar to the Japanese yen, because Japanese interest rates over the past two years made the dollar more attractive because what was the Fed doing? Raising those interest rates. Now there’s a lot of pressure on global central banks to lower those interest rates, but we’re not out of the inflation woods yet.
And quite honestly, we’re at the end of the currency’s None of this really matters. I got to tell you, use this as a warning to get into position because we are in the transition. This is not something I’m waiting for.
But the Bank of Japan has stated back in August that they will not height rates when markets are unstable. So don’t worry about it, corporations and Wall Street. We’re going to make sure that you’re okay.
The market volatility could obviously, obviously affect Bank of Japan’s rate decisions and all central banks rate decisions because their job is not to take care of you or me or maintain the value of the currency like you would think. Their job is to regulate the rate and speed of inflation. Now, inflation is not a monetary phenomenon.
It is a fiat money, a government money phenomenon. More factors, he said, are emerging that warrant caution in raising rates. And what did that do? It sent their stock market soaring, though they own most of it.
That’s another thing that central banks do. They buy the markets so that you can’t see the real danger lurking. And when enough risk has been transferred, that’s when they stop supporting these markets.
This is really quite interesting. But what that did was it boosted their stock markets and it made the yen fall versus the other corporations. Make no mistake.
We’re all going through the same thing. It costs more and more and more anywhere and everywhere in the world to buy the same goods and services because they’re all debasing the currency. And how did they do this? This.
So they managed to avert the crisis in August by backing out everything that they did and promising that they won’t do anything to hurt these markets. But that’s only for the moment. Japan’s all longtime ultra-lax monetary policy, they were in negative rates for quite some time, was meant to rest the economy out of deflationary tendencies and boost growth.
What they really were trying to boost was that inflation. They don’t really care if there’s true economic growth. They just care about that wealth transfer mechanism.
So let’s look at what that looks like. Because the central bank’s balance sheet has grown ginormously since they first went into deflation in the early 90s. And they didn’t even at that point grow at that much, as you can see on this chart.
So there they are in 1989. And what do you see is a series of lower and lower highs on interest rates until from the year 2000 on, they have been unable to raise rates at all and have gone into negative territory. So all of this ultra-loose monetary policy by printing money and making it cheap to borrow that money, it hasn’t worked.
It doesn’t work. But the whole world is following them. I mean, insanity is doing the same thing over and over again and expecting different results.
Well, we’re about to see those different results. And I’m afraid, you know, really what this does is it gives you a window into what lies in our future, because Japan has really been leading the way since the early 90s. Inflation, but right now, inflation and wage growth are mostly back where they were in the early 90s, just before the spiral of price deflation and economic stagnation that became known as the lost decade.
Actually, that’s plural, because that’s from the 90s, and they have not been able to do it. But inflation has risen its ugly head. And so they need to raise rates.
There’s only one way to fight deflation, that’s with inflation. There’s only one way to fight inflation, that’s with deflation. It’s really that simple.
They want you to think it’s so complicated that clearly you don’t worry your little head. We’ve got this under control. No, they don’t.
And what this is showing us is that the markets are in more control than the central banks. And that’s pretty scary, because the central banks, to me, were frankly scary enough. But let’s see what has happened, because you can see all of this money printing, all of this cheap money, didn’t work.
So they simply doubled down on it. Yeah, that’s insane. And now their inflation has jumped to 3%, giving support to a rate hike case.
Except, so what did they do? They postponed, they pulled everything back, back in August. And was that to give the markets time to get used to it? Because they just boosted the rate again. And I think that’s really what it was about.
They have to do it because now they’ve got to deal with inflation, something that they’ve been trying to generate and have in terms of food inflation, the cost of living inflation, but it showed up as deflationary. Acceleration has been driven by a phasing out of government energy subsidies. And that’s what happens when things get too expensive.
It is the public that always pays for it. So they were doing these subsidies, energy subsidies. There we are, that energy again.
Are you energy independent? You need to be. But now they’ve got a different problem that they’re dealing with because their core inflation accelerates and hits a 16 month high. But this is really just a wealth transfer mechanism.
I’m showing you this because this is what lies in our future. The central banks losing control and especially inflation. This has been at the fastest pace in 16 months.
Their inflation target is 2%. All of the inflation on average, if you believe their stats, are running at 3%. And what is really interesting is when you look at the cost of goods, and of course energy goes into that, what you see are cost of living expenses going up at closer to almost 6%, not 3%.
But what is it? What is the other side of that that’s balancing it out and making it appear better than it is? Because of course, central banks would never manipulate things to make it look the way they want it to. So the cost of living is going up, but the services income, right? The services income. So the income that you need to pay these higher costs of living is not rising as fast.
Shocker! That, my friends, was the design of this entire system put in place all the way back in 1913. The difference is, is that was the and this is the end. So if your cost of living goes up, and I’m wondering, isn’t that happening here too in the US? Isn’t that happening in France and in Australia and in Germany and all over the world? In Great Britain, where the cost of living is going up a whole lot faster than wages are.
And that means that the general public is being squeezed and squeezed and squeezed. This only helps the wealthy corporations and the wealthy. That’s who that helps.
It does not help the general public at all. And I’m showing you this because we’re all going through this. There is no difference.
Just remember, it’s so simple. The only way to fight inflation is with deflation. The only way to fight deflation is with inflation.
The assumption is that these human beings, they are not gods, no matter what you think, they are not gods, that these human beings are walking a huge tightrope that they can fall off of at any moment because the rate of their core inflation has been going up for the past 27 months and they couldn’t raise the rates in August. We’ll see what happens. Maybe.
Maybe everybody’s gotten used to the fact that the Bank of Japan is going to raise rates and make it more expensive. Maybe between August and now, those traders have pared back and sold off some of those positions so they didn’t take huge losses. Or maybe everything’s about to collapse.
We’re going to find out because the Bank of Japan indeed did raise the rate to about a half a percent, citing higher wages and inflation as the reason. And as I just showed you, wage inflation is below their target. Goods inflation is above their target.
So they don’t want corporations to pay you more. They want to squeeze the public as much as they can. It’s garbage.
It’s absolute garbage. Are you ready? Because it doesn’t, this isn’t just, oh, that’s Japan and it’s different over here. It’s not different anywhere.
This time is not different. And the question is, have they actually escaped that low inflation? What a horrible thing with prices going down. That’s horrible.
Have they really generated enough inflation to give them that growth that they’re looking for? We’re about to find out. But if the Bank of Japan had behaved in a similar manner to its G10, so that’s the 10 largest economies in the world, the country’s interest rates would have increased by two percentage points over the past few years. Instead, they barely crept up rising from a negative 1% to 0.25%, despite nearly three years of price growth above the Bank of Japan’s target of 2%.
Do you get this? Nothing they did worked. All of that debt, buying all of their stocks, buying all of their bonds, all of that money printing, all of that low interest, it didn’t work. And now I believe they are losing control.
Maybe I’m wrong. But inflation or deflation, how has the US dollar, which everybody thinks is so strong and great, that’s what they want you to think. It’s only relative to other currencies.
Spot gold, which is a contract, and spot silver performed. I don’t know. Let’s take a look.
And we’re looking at spot gold to the Japanese yen. And I know this line is super hard to see. So I drew some things in because I couldn’t get it to go another color.
And this goes from 1969 through 2025. So we’re going to look at the overview, and then we’re going to get more specific. And you can see that back in the 80s, right, that gold went up as Japan became a very industrialized country, right, they were making the cars, they were doing all of this, there was lots of money to go around, and that created inflation.
And then when that bubble burst in 1989, they went into many lost decades of deflation. But once they broke out of that cup formation, that’s why I’m always showing you these patterns, because it doesn’t really matter what you’re looking at. It works the same.
So if you can understand it over here, you can look at any chart, any graph, draw out that cup formation, and see that is an accumulation pattern. And when it breaks out like it did in 2019, well, then it goes much, much higher. And therefore, gold has gone much, much higher on the spot market, because they’ve actually been experiencing inflation to a large degree.
And the central bank has had really virtually no tools to fight it because of that yen carry trade. Through inflation and deflation, gold has maintained the purchasing power of the consumer over time, period. That’s its main job.
That’s what it does every time. So this is the dollar to the Japanese yen. In over 10 years, it’s gone up almost 33%.
Spot silver has gone up 120, almost 126%, same time period. And spot gold has gone up 186, over 186%, same time period. How many times do I show you these graphs on all different currencies? And guess what? It always looks the same, doesn’t it? The dollar performs weaker.
So when those other countries fly to the safety of the dollar, what are they flying to? Clearly, even in the manipulated spot markets, they significantly, gold and silver, significantly outperforms the strong dollar, the reserve currency of the world. You know what the real reserve currency of the world is? Gold and silver. And it’s yours to become your own central banker, protect your purchasing power.
Whether we’re going into, well, we are. We’re going into a hyperinflationary depression. So there’s your inflation as well as your deflation in one place.
And I’ve shown you many graphs in the past where it doesn’t matter whether you’re inflation or deflation, spot gold, spot silver, you can see the lost decade. It doesn’t matter. The gold and the silver physical in your possession will protect you whatever the outcome is.
And then we’ll know where the dust settles. We’ll see our own cup formations in our strategy, and we’ll be able to take advantage of it because what you’ve really done is maintain your purchasing power. And if you’re owning physical gold and silver, you are also properly diversified and you’ll have the ability to take advantage of what we’re already walking through.
And the strategy is built in layers so you can deal with wherever we are in this trend cycle. Call us. Let us get that strategy put in place for you today.
Why wait? They’re telling you, they’re showing you what is most likely to happen. I suggest you believe them. I do.
Because frankly, in gold and silver, I trust. Not this garbage. And I absolutely know never has it been more important for you to create that local community, to create security of food, water, energy, security itself, have something to barter with, preserve your wealth with, community, because I think we’re running out of time fast, get to know your neighbors, get to develop a community, and shelter.
These are all the things we need to sustain a reasonable standard of living. Get it done. If you’ve been procrastinating because you’re seeing the markets go up, although you’re also seeing the volatility in there, but you can only convert that back into this.
So it doesn’t really matter, does it? Don’t be blinded by numbers. Make sure that whatever it is you’re doing and whatever your investments are, my personal preference is to put most of my wealth in an undervalued asset that’s in a long-term positive trend. Why isn’t that your goal too? It should be.
And I absolutely 100% know and never has this been more important. If we can grow the global community and create a very powerful but silent and peaceful revolution just by converting government’s crap that they manipulate all the time into physical gold and silver, we can have a shot at having a seat at the table. More about that in the future because I am working on the sound money movement, but until next we speak, please be careful out there.
Bye-bye.