The yen is the proverbial canary in the coal mine for Asian currencies. BOJ Governor Kuroda has engaged in several “unlimited” and very public bond buying operations. Their Faustian bargain on rates has two major problems that act simultaneously against Japan: 1. Every bond 1/6
purchased by the BOJ injects that many more Yen into the system. 2. Rates differentials between other developed economies (primarily the U.S.) causes Mrs. Watanabe to immediately take those Yen and invest abroad at much higher rates (+250 bps now).The third rail and lingering 2/6
Explosive problem is confidence in the BOJ eroding daily. These ‘disorderly’ moves in the Yen break confidence in control. Market forces can turn into a panic 😱 once participants realize the yen is completely unhinged (happening now). Once lack of confidence on 3/6
‘Control’ is broken, we will experience an economic catastrophe in Japan…which will have enormous ripple effects on other world currencies. Rigid currency pairs will subsequently detonate and find more ‘market based’ levels. These tectonic movements will cause serious harm 4/6
to those countries that require daily purchases of vital resources (food, energy, basic materials). Hong Kong and China are next. PAY ATTENTION TO THE YEN. It’s on its way to flapping in the wind and heading to 150,180,200+ as rigid Yield Curve Control will force it to happen.5/6

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with 🇺🇸Kyle Bass🇺🇦

🇺🇸Kyle Bass🇺🇦 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @Jkylebass

Apr 13
Another take on China’s shutdown of Shanghai, Shenzhen, Guangdong, etc. China is desperately in need of crude oil, LNG, food, basic materials, base metals, and more. Putin’s invasion/massacre has created additional energy scarcity, inflation, and skyrocketing food inflation. 1/12
Whilst China hasn’t had any material problems with the virus from Wuhan in the past, it’s interesting that their draconian lockdowns (in conjunction with telegraphing the purchase of fewer cargos of LNG and crude) are forcing global economists to ratchet growth expectations 2/12
lower whilst concurrently shifting future demand projections for commodities lower. Everything China desperately needs to acquire is trading down in price as a result of the lockdowns. If we all take a look back, the primary driver of China’s current account moving into 3/12
Read 12 tweets
Apr 7
The PLA’s bots have intensified their smear campaigns against inconvenient truths about China on US social media. I will post the screenshots of a few new ‘followers’ below: #China #Bot @TwitterSafety @Twitter #ChinaExposed 1/6
These bots follow Twitter profiles that spread truth about Xi’s China in an effort to attack postings they find to be offensive. They share similar characteristics with: 1. Number and similarity of their followers 2. They aren’t followed by anyone you follow 2/6
3. They typically use pseudonyms 4. Mostly (but not exclusively) joined Twitter in the past two years 5. They use American flags and political phrases in their profiles in a feeble attempt to mask their identity, location, and nationality 3/6
Read 7 tweets
Mar 16
Given Putin’s complete and soulless evil, I was compelled to peruse Churchill’s 1st volume of 5 books on WWII. In Churchillian elegance he says: “It’s my purpose, as one who lived and acted in these days, first to show how easily the tragedy of the Second World War could have 1/6
been prevented; how the malice of the wicked was reinforced by the weakness of the virtuous; how the structure and habits of democratic states, unless they are welded into larger organisms, lack those elements of persistence and conviction which can alone give security 2/6
to humble masses; how, even in matters of self-preservation, no policy is pursued for even 10 or 15 years at a time. We shall see how the counsels of prudence and restraint may become the prime agents of mortal danger; how the middle course adopted from desires for safety 3/6
Read 6 tweets
Mar 1
As the world awakens to the pure evil of Putin’s Russia, Xi’s China is in the crosshairs. Global pension and endowment investments in Russian stocks and bonds are at risk being completely wiped out after errantly turning a blind eye to Putin’s despotism. 1/7
MSCI and other global indices invested in Russia are almost completely trapped. We are witnessing the bifurcation of the world into two spheres. The rules-based west on one hand and the axis of authoritarian, communistic, totalitarian evil on the other. The China/Russia 2/7
‘Strategic Partnership’ announced in a joint press release on Feb 4, 2022 is worth another read. They intend to form a bond bigger and stronger than the Allied Powers of WWII. “No areas of cooperation are off the table.” It will become clear that fiduciaries that invested 3/7
Read 7 tweets
Feb 26
When the wall of communism fell, we (The U.S. and the U.K.) convinced the Ukraine to denuclearize as they had a third of Russia’s nuclear weapons when they became independent. In exchange, Ukraine received a signed security guarantee from us known as the Budapest Memorandum. 1/8
The implication was Ukraine would not be let to stand alone and face a threat should it come under one. Putin has orchestrated a full-scale invasion and, just like 2014, we DO NOTHING. We send their troops some weapons and say “good luck”?! America isn’t what it used to be. 2/8
We used to stand up to signed agreements. We’re becoming like the Chinese…where signed international agreements aren’t worth the paper they are printed on. The sanctions imposed to date are almost completely toothless. Russia’s economy is almost solely dependent on crude and 3/8
Read 10 tweets
Feb 15
Javier, @JavierGoya7 , China is in desperate need of food (ie corn), energy (oil, gas, coal), basic materials, and semiconductors. If xi is contemplating moving on Taiwan 🇹🇼, he would need to stock a surplus of these things or find someone to backstop their needs. 1/4
If China and Russia are collaborating at this point in history, a series of important deals might be had. Russian oil and food for an end-around crippling US sanctions for Putin’s Ukrainian invasion. The alliance of evil can and will likely unite to bring this to reality. 2/4
China will be sanctioned and removed from the global SWIFT system if xi moves on Taiwan. Xi might think he’s got the West in check but we have him in Checkmate if he moves. 3/4
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(