The ECB is warning of a global bond market meltdown if the Bank of Japan changes their policy.

Japan has propped up global debt markets by pumping $3.4 Trillion into foreign markets.

But sticky inflation could force those capital flows to reverse, leading to a debt tsunami. The Japanese CPI reading was expected to be 2.5% last month.

But it came in at 3.5%

For now, BoJ governor Ueda is hoping that inflation falls like it did after a brief spike in 2014.

Because if it doesn't, he will be forced to allow interest rates to rise.

OPEC+ cutting oil production 🔥

Trying to force western CBs into QE?

Reminder: Bond yields don't just rise because of the Fed raising. They rise because investors sell bonds that don't keep up with inflation.

But if yields stay high too long, we have widespread insolvency.

https://twitter.com/stackhodler/status/1635569045012357120

Watch sovereign debt tomorrow.

Earlier this year, China published a little-noticed document titled "US Hegemony and it's Perils"

It accused the US of abusing their power economically, politically, and culturally.

Given recent events, this document is looking increasingly like a subtle declaration of war The document concludes: "While a just cause wins its champion wide support, an unjust one condemns its pursuer to be an outcast."

It's now clear this is a statement of intent.

China is attempting to rally much of the world around this narrative.

https://twitter.com/stackhodler/status/1641711724859469828

China is rapidly assembling a coalition of global partners.

The message from China is clear: Unlike the US, we don't care what you believe, and we won't try to change your ways.

Sunni or Shia, dictatorship or democracy...

Who gives a shit. Let's just do business. Brokering an agreement between Saudi Arabia and Iran was a surprise.

But there's potential for an even bigger shock.

Something that would shake the existing world order to its core, and send the US reeling:

Bringing Europe into the fold.

Wild how everyone becomes a #Bitcoin maximalist when the crypto VCs and shitcoin casinos blow up.

Crypto influencers will shill anything if you pay them enough.

But stop sponsoring their podcast and suddenly the truth comes out. Gains in alts are driven by speculative VC money / FTX style ponzis.

Some retail folks *might* catch a pump and get out in time - but they're mostly exit liquidity. Scare off the VC's and what's left?

Just Bitcoiners relentlessly stacking Sats come hell or high water.

#Bitcoin is being eaten up on @coinbase

Meanwhile, they (or their banking partners) have dramatically limited ACH deposit limits.

Are they trying to throttle the bank runs? I opened a Coinbase account in 2013.

I think my daily ACH limit was $50K back in the day.

Last week it was $10K. Now it's $1K per day. Fishy.

Why central banks are praying for low CPI:

- High rates & sunken bond values = Systemic Risk

- High CPI drives rates higher (not Fed hikes)

- As long as CPI is high, rates can only fall if CB buys bonds (QE)

- QE for systemic stability with high CPI = #Bitcoin and Gold WAY up I don't think people realize how close we are to a "suddenly" moment where investors are forced to realize the Fed has no control over this.

All it takes is broad emergency QE while CPI is still high and the whole system comes into question.

My 2020's survival portfolio: Cash🇨🇭🇺🇸/t-bills, #Bitcoin, Gold, & NO DEBT

Why no debt?

In a deflationary spiral, credit money goes poof and jobs disappear. Debt is much harder to pay off.

Debtors become forced sellers to those with cash and no debt. Cash buys a whole lot more. Why #Bitcoin and Gold?

Central bankers fear deflationary spirals above all and will debase currencies to avoid them.

Bitcoin and Gold will protect your buying power in that scenario. And they're neutral monies that aren't tied to a single market, or any one country's fate.

"When will something break?"

I'm convinced something nearly broke on October 21st, 2022. But few noticed.

Watching the charts that morning it was clear that something big was happening. But then the Fed (via Nick Timiraos) and the Japanese MoF intervened at the same moment.

https://twitter.com/stackhodler/status/1584108061865938944

Timiraos is well known as the designated Fed leaker.

Look at the timing of this dovish tweet, just as USDJPY was going parabolic.

Now take a second to appreciate the fact that the global financial system is partially held together by tweets.

AI is to WW3 as nukes were to WW2.

Google, Microsoft, Meta, and Apple are entering into an AI arms race that will deeply impact humanity with unpredictable (positive and negative) outcomes.

Their work could determine the outcome of the power struggle between the US and China. According to Google, "the scale of the largest AI computations is doubling every six months, far outpacing Moore’s Law."

In other words: We're entering the "suddenly" part of AI advancements.

Central banks have been stacking gold at the fastest pace since 1967.

The era of sovereign debt as the go-to safe haven is coming to an end and few people have caught on.

#Bitcoin is the people's reserve asset. But central banks could soon be stacking Sats too... Harvard economist Matthew Ferranti just laid out the rational case for Central Banks to stack #Bitcoin

His analysis concludes that in an age of sanctions, Central Banks should allocate to BTC and Gold. More sanctions risk = Higher ideal BTC allocation

sites.google.com/view/matthewfe…

In a world of abundance, engineered scarcity becomes even more valuable.

Robotics, AI, astroid mining, and nuclear fusion can create a world of abundance.

The way people store their wealth today (stocks, bonds, real estate, gold) will all be impacted. #Bitcoin is future ready. Why do we need scarcity?

Scarcity enables us to store excess earnings in something that maintains purchasing power over time.

Inflationary fiat makes that difficult. Fiat quickly loses purchasing power due to its ABUNDANCE.

The Bank of Japan just set a new monthly record for bond purchases.

They bought more than $128 Billion in Japanese government bonds this month.

And today was the third day in a row of unscheduled purchases, including 2 year and 5 year bonds. Why it matters: Japanese capital has propped up foreign debt and equity markets for years.

Ballpark figures: Japan has >$3 Trillion in foreign equity and >$5 Trillion in foreign debt instruments (IMF)

But what if that capital goes back to Japan, enticed by higher yields?

5 year performance of Gold vs. S&P 500. Dead even.

Gold is up 1.5% over the past year in one of the most chaotic financial environments on record. Long term treasuries down 31% in that period.

Credit where it's due. Shiny rocks can help you sleep well during chaotic times. Things are looking rough for #Bitcoin in the same period.

Chart looking like the orange coin blew a 28-3 lead in the Super Bowl.

Probably a good long-term stacking zone.

IMO these are the 5 biggest macro trends driving your portfolio right now:

1. We're in WW3
2. The Fed is a weapon
3. The end of the Big Debt Cycle
4. Energy & Inflation as severe constraints
5. The global search for a new reserve asset

Explained in 5 tweets 👇 We're already in WW3.

The Dollar reserve system is under threat, and with it the United States' status as global hegemon.

Chinese and Russian actions can be viewed as a coordinated attack on the existing world order. And US & Fed policy as attempts to defend it.