Tom Bilyeu

In this case, you sell off your US assets and pay down your loans.

And in the US case, you devalue the dollar.

All right, the third thing that he's probably worried about is the volatility spillover.

So markets do not exist in silos all around the world.

Understanding how interconnected we are right now is very important.

And when the world's third largest bond market, which is the Japanese government bonds, because of that low interest rates, when that market has a heart attack, it triggers

automated selling in risk parity funds, multi-billion dollar funds that automatically sell assets when volatility spikes.

Analysts at Citigroup recently warned that Japanese government bond volatility could force funds to dump up to $130 billion in US bonds purely to manage their risk profile.

So that's regardless of how healthy the US economy looks, things could be fine on our side, but they have covenants that they have to meet around risk, and so it would force them to sell things off.

Now, by signaling Fed support for the yen, Besant is essentially trying to lower the temperature of like all this instability.

If the yen stabilizes, the fire sale stops.

So he's effectively protecting the US treasury market from being the liquidity ATM, right?

So the yen is declining in value, everybody's panic selling, and now because you have to raise rates to stabilize everything, and now...

you are selling off in the US to get the money that you need.

And that ends up hurting the US economy.

So the last time the US and Japan engaged in a major coordinated intervention to support the yen was June of 1998 during the Asian financial crisis.

In that instance, the joint effort was designed to prevent a regional devaluation war and restore stability to global markets after the yen hit 147.

So we're higher than that now.

Do I have this wrong?

You do.