Yen Downgrade Is Going To Be Bad For US Dollar | The Economic Ninja

➡ The Economic Ninja talks about how the Japanese yen is losing value compared to the US dollar, which is a big deal because Japan owns a lot of US money and has started selling it to strengthen its own currency. This could negatively impact the US dollar. Japan is also buying a lot of gold, which could further weaken the US dollar. Meanwhile, Japan is meeting with other Asian countries to discuss trade, and these countries might start trading more with Japan, which could help strengthen the yen.

Hey, everybody, economic ninja here. I hope you are doing great. Hopefully you can hear me coming back from Chicago and having a nice glass of orange juice. We’re going to be talking about the japanese yen, the US dollar, the implications of the yen collapsing versus the US dollar. First off, can you hear me? I have no mics. I lost them somewhere in Chicago. So if anyone wants a nice set of road mics, happy birthday.

All right, here we go. This story is out of zero. Hedge entitled futures rise. Yen downgraded to banana Republic public currency after another roller coaster session. This is a big deal. We saw the yen completely fall compared to the dollar the other day and then bounce back just a little bit. Why is this important? Because Japan is one of the largest owners of us treasuries and dollars. They’ve said before and they’ve already started selling our currency, our treasuries, in order to bolster or strengthen theirs.

As a matter of fact, they are starting to purchase a lot of gold as well. And those implications versus the US dollar are really bad. Jerome Powell knows it. I can guarantee the president has no clue. But a lot of people in the White House do understand the implications of Japan selling off our currencies. So here we go. Us equity futures swung between gains and losses and traded near session highs as us traders walked to their desks on Monday morning after a roller coaster day for the japanese yen, which increasingly looks like some third world banana republic currency, instead of belonging to the world’s third largest, largest economy, in which first plunge below 160 versus the USD, the lowest level since 1990 amid dismal volumes thanks to the japanese market holiday on Monday, only to soar more than 500 pips in what is now the first confirmed DOJ bank of Japan intervention since 2022.

This is a very big deal. I want people to understand how big of a deal this is to all people owning gold. I’m pretty sure you’re happy regardless of the price action right now. Grab yourself some orange juice. This is going to get nutty now. Futures were buoyed by rising earnings optimism as traders looked ahead to another very busy week for company results. Just remember, more layoffs are happening like 2023.

That bolsters company earnings when they don’t have to pay those pesky employees. Now, in pre market trading, Tesla surged 11%. Remember Tesla, the company that has been falling because it can’t sell as many cars? Don’t worry, they just pull a rabbit out of a hat, say they’ve got a new product. Stock rallies regardless if they can actually sell it like, honestly, that tragedy called this cybertruck doesn’t matter, just gets traders excited and then this is at the same time, Elon Musk’s quick visit to China paid immediate dividends, with Tesla receiving in principle approval from government officials to deploy its driver assistance system in the world’s largest auto market.

Now they go on to talk about some of these pre market movers. We’re not going to go over that. But it does say the very big overnight market event was the roller coaster move in the japanese yen, which again took center stage with dramatic moves that fueled speculation over whether the government had intervened to support its currency. In holiday thinned trading, the yen swung wildly, rallying more than 2% on Monday after earlier dropping as much as 1.

2%, or 160. 17, to the US dollar. Again, why is this important? All right, Japan is meeting with BricS nations. The asian summit, where China invited Japan, South Korea and a couple other small countries to talk about trade. As Japan’s currency falls to the US dollar, I can guarantee you other asian countries aligned with BricS nations are coming alongside of them and saying, don’t worry if you sell.

And this is the big point that people need to understand, when Japan starts to sell its us treasuries or us dollar holdings, it actually weakens the yen. Why? Because investors in the end, go, well, if your currency is already doing bad and now you’re selling what is perceived to be a strong currency, a strong backstop to most central banks and governments holdings, well, then we don’t trust your currency that much.

So they sell off yen. Okay, it’s a catch 22. But what Japan’s doing, and pretty soon you’re gonna find out, probably in the next six months, they’re going to disclose their gold holdings and you’re gonna see that number rise. On top of that, behind the scenes, I guarantee you there are asian countries that are coming alongside of them saying, you know what? We’re going to vow to do trade with.

You see, one thing that people don’t understand about the stagflation of Japan and how it’s been able to profit its system for so long is because it had something very, very valuable. It had items to sell, technologies, and other items to sell to other countries. So there was always a demand for its goods. Very simply put, it’s a lot alike, the US dollar. See, for a long time, the US government and the central bank has enjoyed the privilege of being able to sell us dollars.

I know it sounds crazy because it’s this mad printing press, but around the world, countries were vying for us dollars, us treasuries, because it was the law for a long time. And now it’s completely gone that it was a necessity to own us treasuries and dollars in order to buy oil anywhere around the world. Well, now that although these countries have walked away, we haven’t went and attacked them, that’s gone.

Okay, so now Japan still has items to sell. This is one thing that’s very important. We’re moving into a worldwide deflationary spiral because. Because of inflation. And inflation is causing the consumer to crack down, slow down, slow their spending. Right. Well, that takes a long time. It takes quarter after quarter after quarter until you see the end result being that Japan sales as a nation slow down. Okay, so what’s really important to know here is that these other countries, brics initiative countries are going to countries like Japan that know how many treasuries they have.

I think they’re like the largest holder outside of us, of us treasuries. And they’re saying, you know what? If you got to sell them, don’t worry, we’ll fill the gap. We’ll start doing more trade with you, and we’ll trade in your currency. If other countries trade in japanese yen, it actually bolsters the end, just like what happened with the russian ruble. Okay, so for those of you that are, let’s say, on the sidelines of understanding where we are as an economy or if we are turning down, stick around, because I can guarantee you I can break this down in sort of an easy to grasp reality type one, if you agree with that, if you understand what I’m talking about.

Now, last thing before I go, because it’s a little weird talking in an airport terminal about currencies. It’s usually not the normal conversation. When I see pullbacks in silver, gold, even bitcoin right now, I meant my trading account is in cash for crypto because I’m expecting a downturn. I don’t know. Not a big one, just a pullback. Right. Don’t take it as trading advice. I buy on weakness based on fundamentals.

Okay. I understand the fundamentals of gold because countries are buying it. Central banks are buying it. I understand the fundamentals of silver because it has massive amount. It has more patents tied to it than any metal on earth. Right. I love it. It’s God’s money. I understand the fundamentals of bitcoin, how you can’t fake a bitcoin, right? When price pullbacks come, that’s why you have that cash stash on the side.

I hope you get my drift. Alright, with that being said, I hope you got something out of this everyone. I have a free newsletter down below. I’m going to put a link down just in case something gets wacky on Google. That’s all I’m saying. But I do give daily recaps if you want to see all the videos or a recap of all the videos every day, it’s down there below.

Thank you so much for watching. The ninja needs some mics. I’m out. .

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