The Global Fiat System is Undoing Itself as the Japanese Yen and Chinese Yuan Hold a Delicate Financial Dance
Fiat currency inflation keeps rising.
Central Banks are losing control while telling us “everything is resilient and robust…”
In spite of rapidly increasing U.S. dollar strength against all major global currencies, gold and silver are defying gravity and all sense of normalcy.
Meanwhile, the Japanese Yen teeters on requiring massive intervention by the government and Bank of Japan.
China is dealing with its own Yuan FX peg management and self-inflicted real estate crisis.
China may have to dump their Japanese Yen reserves and sell off significant US debt treasuries to keep their economy afloat.
We’re not in Kansas any more my dear Dorothy
The Bank of Japan (BOJ) finds itself in an increasingly precarious position, caught in a financial maelstrom of its own making.
Japan’s debt-to-GDP ratio has soared to a staggering 260%, with the central bank holding 70+ percent majority of this government debt.
This situation has placed the Japanese economy on a razor’s edge, balancing between sustaining its import trade costs and managing national inflation, all the while battling a rapidly weakening yen.
The BOJ is faced with a daunting challenge: the only apparent solution to strengthen the yen – raising interest rates – could trigger a catastrophic default on its colossal debt load.
Such a move risks not only domestic financial stability but also has far-reaching implications for global markets.
Complicating matters further is Japan’s intricate economic interdependence with China.
As China confronts its own economic turmoil, notably a massive real estate sector default that threatens to undermine 40% of its GDP, the balance between the yen and the yuan becomes critically important.
If China were to liquidate its Japanese yen reserves in an effort to stabilize its real estate market, the consequences for Japan could be dire.
Such a scenario would not only precipitate a financial collapse in Japan but could also trigger a domino effect, potentially leading to widespread economic contagion affecting the United States and Europe.
This all is sounding an alarm, suggesting that the current trajectory of these intertwined economies points towards a broader collapse of the fiat currency system.
This looming financial disaster, they caution, is not a matter of if, but when.
Central Banks are anxiously, hoping for a solution that can avert a catastrophic economic downturn.
Yet, the only path forward is a complete financial and currency reset.
The race to the fiat system collapse is not a sprint … it’s a marathon.
