Japanese Debt Crisis

You can not print oil. Japan needs a higher currency !



Chart 1 - Japan has a massive debt problem. +200% of debt to GDP. [Chart via Claude]

Chart 2 - The high debt with inflation has crashed the currency of Japan (Yen). However Japan has to import all of its oil. A lower yen means the oil is more expensive and hence inflationary. This is not good for the long duration Japanese bond markets. Japan needs a higher currency to reduce energy inflation. 

Chart 3 - BOJ (Bank of Japan) owns over $1.2T ($1200 billion) of US Treasuries. It can sell these treasuries to buy yen, strengthen its currency to reduce Japanese energy inflation. However if the BOJ sold these treasuries it would send US interest rates higher (and the world). Possibly resulting in a US (and or world) recession. The US Sec of Treasury Scot Bessent said 'no' do not sell your treasuries and stepped in to support the Japanese Yen with $60 billion USD. USA and Japan are now join at the hip! Gold jumped 10%! There is more YEN support to come over the next 12 months. [Chart via Claude]

Chart 4 - Here is how the USA reduces the debt to GDP percent. By keeping nominal GDP greater than US 10 yr interest rates, or negative real interest rates. A bullish environment for hard money.

More here ..

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China has some economic challenges ahead

Consumer asset deflation with crashing demographics.


Before we start:

Gross Domestic Product (GDP) = Productive population growth + Productivity growth + Debt growth.


Some charts showing the issues China faces in the near future. 


Chart 1 - Falling consumer assets effects family wealth and confidence to have more children and or take business risks. Point: Lack of human population growth hurting GDP growth.

Chart 2 - The Chinese 'one child' policy is coming home to roost. Working age population forecast to crash in the next decades. Point: Lack of human population growth hurting GDP growth. 


Reference X : 

@Econimica

Chart 3 - If China's GDP is forecast to suffer while debt is already near 100% of GDP, then China needs assets on the balance sheet to move higher in value.  China needs a higher gold price. Michael Howell of Cross Border Capital explains why in the video below (2nd half). 

China knows it has a population problem. China is trying to over come the population short fall with millions of humaniod robots. If these robots can complete human tasks then production growth will follow. 

This will be the new formula for GDP in the sci fi world coming. 

Gross Domestic Product = Productive population growth [Human + AI Agents + Robots] + Productivity growth + Debt growth + Energy density + Compute efficiency.

hat tip: Raoul Pal of Real Vision

If China can not be productive (like Japan post the Asian crisis of 1998) then serious economic and political issues will explode inside China. 







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Gold what is it good for?

What does gold do in a modern-day financial world?


The world runs on an "I owe you" (debt) with some collateral value behind it.

The collateral may be a business, house, a talent, or advantage (the right to tax) the borrower has.

But when all these collateral's fail, there is only one type of collateral that is the undisputed champion of them all, and this is gold.

When the world has faced an incredible financial crisis of debt, gold has been the savior.

Some examples:



Chart 1 - USA Dow Jones 1929 Financial crash on massive excess of debt was only reversed by gold. 

Chart 2 - The Asian crisis of 1998, South Korea collapse was only reversed by gold.

Currently the gold price is rising as the world debt level increases.

Nothing has changed.

The world knows what it will need when collateral fails again. 



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Welcome to QE 5

The government central planers have a plan, but when they get a smack in the face they will print money.


POINT: 2026 is the year of US midterm elections. Some how TRUMP will have to make the voters happy!


Chart 1 - High US mortgage interest rates are hurting housing and the very important consumer.

Chart 2 - Due to the US debt levels, the US can not afford to allow consumer sentiment to slump on the back of private property wealth destruction. Central planners to the rescue with QE5 or is it QE6 (hard to keep up)?. QE is when the red line below crosses below zero and then back up above zero.  

Chart 3 - The current QE action may see the US Dollar (DXY) slump (as expect by the red short term cycle). 

To conclude: Asset prices are heading higher unless inflation reaches crazy levels (CPI > 6%). 



Time for a funny!

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Dow Jones Long Cycle Review

The best wisdom is sourced from those who have grey hair.


Every thing cycles. True, cycles are not perfect timers, but they do provide a warning. 



Chart 1 - Dow Jones 100 year cycle: Currently we are in the decade to expect a major Dow cycle peak (2025 to 20350. Both the Panic of 1837 and the 1929 Wall Street crash were following a period of great reflation. Great excess lead to a bust. Excess due to the huge creation of money supply and easy finance. Sounds like 2009 to now, does it not ! 

Chart 2 - SP500 Cycles: The first cycle peak risk period is 2027 to 2029, the second is 2033 to 2035. The first cycle period has a presidential election with in it at 2028. Remember 2008 GFC crisis! SP500 cycles show sub cycles within the Dow Jones 100 year cycle. 

David Hunter thinking is worth a follow and review, as the above cycles support his views. 

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Gold Price Target

War open the doors to explosive debt, more so if a war goes on longer than expected.


War is a battle of resources, he who runs out of stuff first, loses. No matter if its arrows, bullets or missiles. 

Chart 1 - Gold trend is about to explode higher. Of course if gold and silver are the new momentum pump you can expect crypto to be still on hold in the waiting room. Place your bets!

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Bitcoin slump!

Question: Why was the crypto cycle of 2025/26 such a dud!



Answer: Short answer. Japanese yen weakness.

Long answer.

        (1) The effect of the JPY weakness due to Japanese debt spiral dynamics.
        (2) Chinese housing deflation.
        (3) US interest rates are to high on tariff fears.

Asian speculators have not fueled mind-blowing crypto prices, and have enjoyed the speculation in silver and gold as a replacement. 

Fixes:
(1) The BOJ [and the FED] buys Japanese bonds to avoid a global debt spiral collapse, the result will be US dollar (DXY) < 85, and a stronger Japanese currency (JPY). 
(2) The PBOC prints more money, and Xi encourages investment in gold to offset consumer housing value losses. 
(3) The FED cuts rates as inflation did not appear (yet) and US dollar (DXY) < 90.

POINT: The quick fix is the DXY down hard!

Before the charts below, here is a rule to understand. 

Rule: Gold moves higher when there is stress in the global debt finance. Bitcoin moves higher when the stress in global debt finance is released. 


Chart 1 - Bitcoin moves up in price fast when the Chinese economy runs hot (no financial stress). This is expressed by the Chinese 10 yr interest rate (CNY10) ratio to the US Dollar (DXY). The Chinese 10 yr rate rises when the economy overheats.

The red line (A) below has been sideways during 2025, expressing no excitement in the Chinese economy (financial stress present). No excitement to send Bitcoin to the moon.  

Chart 2 - Japanese currency (JPY) weakness removes export power (and economic power) from the Chinese economy. During the Bitcoin rallies in 2018 and 2021, the Chinese currency (CNY) started much weaker than the Japanese currency (JPY), and when strength arrived to the Chinese currency, the Bitcoin rally ended.

Chart 3 - Japanese debt spiral risk has sent the Japanese currency down. Rising 10 yr interest rates while inflation is mute have shown a lack of confidence in the Japanese bond market and investors are expecting massive central bank intervention to avoid a global debt spiral. 

More on the Japanese debt risk. 

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Gold and Silver Targets

Time to calculate targets based on a measured move for gold and silver.



Chart 1 - Gold chart from 1971 (Nixon gold standard exit). Clear shows strong resistance near $6,000 to $10,000. Of course $20,000 is there as well, can not imagine pricing getting there this time. Notice how price bounces between arc's and Gann angles. 

Chart 2 - Silver using measure move targets

Chart 3 - China forecast for more money printing. Add this to USA reflation suggest 2026 is going to be HOT for the economy. 

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Wyckoff Chart for 2026

The most attractive Wyckoff Accumulation structure for the next 12 months.



On the back of more money printing.

Risk on assets will do well in 2026.

There is no better picture for a Wyckoff investor than the chart below for the environment we are going to enter into 2026.

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Bitcoin is Chinese now!

This chart list shows how important China stimulus is to bitcoin.


The greatest show on Earth is the G2. The China vs USA show. The end result is both sides need each other, and both sides will print money handsomely.

Chart 1 - PBOC stimulus tools clearly show correlation to Bitcoin.  The PBOC needs to create a lot more money to reverse their current deflationary trends. It's just started folks!

Chart 2 - When China stimulates copper does better than gold. Gold is stronger on financial stress, copper is stronger when the stress is overcome. 

Chart 3 - The ratio of the Chinese 10 yr to the US dollar (DXY) is sync with Bitcoin peaks. 

Chart 4 - US Liquidity is improving, just in time for US Mid terms. 

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The Big Long - Everything Gold

Investing is about everyone agreeing with you, later.


Chart 1 - There are only two price points that matter with a gold mine. The price of gold and the price of oil are the two key factors. The revenue is gold, with oil (diesel and petrol) being the major expense. Labor is normally variable with the revenue produced. The ideal economic conditions, often referred to as Goldilocks conditions, for gold mine profitability occur when gold prices are rising while oil prices remain stable.

Chart 2 - XAU earning per share is booming proving gold stocks are enjoying a goldilocks time. 

Chart 3 - Historic trends of gold and oil show (yellow shade) history is repeating good times for gold miners. 

Chart 4 - What can stop this train? Well, higher trends in the oil price would strangle profits. We are currently at cycle lows for oil, which means price can only go one way, and that is higher. But this will take some time into the middle of 2026, plenty of time for gold stocks to shine. 

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