The Economic Collapse is Starting Again! And No One Is Prepared for What's Coming

What is happening right now will affect all of us. We better pay attention to what's happening. Japan is cracking and is about to collapse and it's going to take everything down with it. This is as big as it gets, guys. And I know what some of you are probably thinking, Japan? Japanese bonds? Why should I care about that? I live in Florida. I live in Ohio. I live in Texas. I'm trying to pay for my mortgage, buy groceries right now, fill up my gas tank, maybe keep my retirement account from getting wiped out. I get it. But that is exactly why this matters because Japan is not some faraway island economy that has nothing to do with your life. Japan is one of the load-bearing walls of the entire global financial system. And when a load-bearing wall suddenly starts cracking, the whole house starts shaking. So let me explain what's exactly happening here. So for decades, Japan has been running one of the biggest financial experiments in modern history. Massive government debt, artificially low interest rates, central bank intervention, yield curve control, money printing like our own Fed, and the Bank of Japan basically told the market, hey, don't worry. Money will be cheap forever. Okay. But here's the problem. Money is never cheap forever. Eventually, reality shows up and smacks you in the head. It's like drinking alcohol every day and pretending you're not an alcoholic. People like that can only deny it for so long. And right now, reality is showing up in the Japanese bond market. Now, don't let your eyes glaze over. Let me explain what's happening here. Because long-term Japanese bond yields have been surging. The 30-year Japanese government bond has been hitting record levels. The 10-year yield has been moving back toward levels Japan has not seen since the 1990s. This is not just a Japan story. This is where it really matters for the United States of America. Two years ago, here on the show, I was warning about this, telling all of you that Japan is one of the largest foreign holders of U.S. treasuries. Japanese banks, pension funds, insurance companies, and institutions are deeply tied to U.S. bonds, into U.S. bonds, and European bonds, and the global market. So when Japan starts taking losses at home, what do they do? They sell what they can. They start dumping U.S. treasuries like a bad habit. That means U.S. treasuries get dumped. That means global equities. That means pressure on the very markets that are holding up your 401k, your pension, your mortgage rate, your credit card rate, your car loan. This is like the plumbing of the entire global economy right now, and the pipes are cracking. So take a look at this on your screen. Look at this chart. This is the U.S. 10-year treasury yield going back decades. And every time yields spike, something breaks every single time. I mean, look at the 1987 stock market crash, the 1990 recession, the Mexican peso crisis, the Asian financial crisis, the tech bubble, the global financial crisis, the euro debt crisis, the taper tantrum, and the 2018 global sell-off. Over and over again, the bond market starts screaming before the stock market admits that there is a major problem. But here's what's different right now. For 40 years, we were in a bond bull market. Interest rates kept falling. Every crisis could be papered over with cheaper money. The Fed could just continue to cut rates. Governments could just borrow more money. Wall Street could refinance. Consumers could borrow more money. Corporations could roll over their debt. That was the system. But now that 40-year trend looks like it's over. Rates crashed to zero during COVID, and then they reversed back violently. Now we're back near 5% on the 10-year treasury. The 30-year treasury is hitting levels we haven't seen since before the last financial crisis. This is not a normal market cycle. This is, in my mind, the end of an era. I look at household wealth. Look at this second chart here. On paper, Americans have never looked richer. Real estate values exploded. Stocks exploded. Retirement accounts exploded. Housing exploded. Mutual funds, corporate equities have gone up almost vertical since 2020. But here's the uncomfortable truth. A lot of this is just paper wealth. It looks great on a spreadsheet. It looks great on Zillow. Hey, look at my property value. It looks great inside of your brokerage account when the S&P is near record highs. But can you actually use it? I always say you can't eat equity. You can't feed your family with equity. Your house may be worth more, but if you sell it, where are you going to go? Your mortgage rate might be 3% right now, but the new mortgage is 7%. So your 401k might look healthy, but it might be riding on a handful of mega cap tech stocks right now. Your home equity might look huge, but tapping it means borrowing at much higher rates. So Americans right now are paper wealthy, but cash poor, and that is the trap. The rich own assets, the middle class owns liabilities dressed up as assets, and the poor are just getting crushed by rent, food, insurance, debt, energy costs. I was talking to our neighbors yesterday, and she couldn't believe. She filled up her truck, said it cost her $111, and she just stood there and laughed out loud. And the woman next to her laughed too. She's like, I know. I guess all I can do right now is just laugh. I don't know what else to do. I have no choice. So that's how this wealth transfer happens right now. Not all at once, slowly, quietly, and then suddenly. Now look at this consumer discretionary number, because this chart may be the scariest one of all. This shows US consumer discretionary stocks equal weighted versus the S&P 500. In plain English, this is showing us how the average consumer facing company is performing compared with the broader market, and it is collapsing. Guys, I don't want to sugar coat this. We are back near the great financial crisis levels. This means the businesses that depend on regular Americans having extra money, restaurants, retailers, travel, leisure, home, apparel, home goods, are already telling you that the consumer is tapped out. Costco two weeks ago said their customers aren't buying red meat, and every time their customers pulled back on buying more expensive red meat, the economy was facing collapse. But you wouldn't know that by looking at the headlines, the S&P 500, because a tiny group of massive technology companies is like masking the pain that's underneath it. That's that K-shaped economy that we hear so much about. The top keeps floating higher while the bottom gets crushed. Wall Street celebrates, and Main Street is bleeding. Credit card debt is at an all-time high. Buy-now-pay-later services are exploding. Car payments are outrageous. Insurance costs are through the roof. Grocery prices are still painful. People are just borrowing money just to survive right now. And yet the media keeps telling you the economy is strong. Strong for whom? Nvidia? AMD and top chip manufacturers? Maybe for them it's strong, because the average American is not experiencing strength. They're experiencing exhaustion. That's why Japan matters. Because Japan may be the fuse. The bond market may be the match. But the explosion, if it comes, it lands right here at home. So where does this money go? What happens next? Well, this is the beginning of the greatest wealth transfer in a generation. Money is moving out of paper promises and into real things right now. Energy, copper, silver, uranium, critical minerals, food, productive land, infrastructure, warehouses, defense, manufacturing, anything real. Anything that's tied to the real world. The old system was built on cheap money, cheap imports, cheap labor, cheap energy, endless debt. And that system is breaking. This new system is about reindustrialization, reshoring of businesses, rearmament, massive trillion dollar defense budget, supply chains, power grids, all of it. Data centers, rockets, satellites, nuclear energy, mining, manufacturing, refining, all of it. This is why commodities matter so much. Because you cannot build the future with fake financial engineering. You need actual things. You need copper, you need silver, you need uranium, you need oil, you need gas, and you need steel. And then, of course, on top of that, you need electricity. And the people who understand this early will be in a very different position from the people who just keep pretending that this is another normal cycle right now. This is not normal. Japan is cracking. The bond market is yelling as loudly as it can, and consumers are breaking. I mean, you're seeing restaurants closing. You're seeing these businesses laying off tens of thousands of people. People just don't have expendable income right now. And the greatest wealth transfer in a generation is already underway. This is all happening right now.