The yen just hit a 40-year low and Japan is trapped. Whether they hike or freeze, it ends the same way: the pin that pricks our bubble.
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Investors are far too complacent about risks that are now hiding in plain sight. The AI trade cracked this week: Alphabet fell 10% after announcing even higher CapEx, Oracle is down 41% on the year, Meta and Amazon fell, and Microsoft is nearly in a bear market. SpaceX now trades 49% below its post-IPO high with its float set to jump from 5% to 40% by year end, and Tesla dropped 18%, costing Elon Musk nearly $100 billion in a week. Peter Schiff compares the roughly three-quarters of a trillion dollars in annual AI CapEx to the dot-com build-out, where the early favorites went bankrupt and took their vendors down with them.
The bigger danger is Japan. The yen fell to a 40-year low against the dollar, the 30-year JGB yield hit an all-time high near 4%, and with debt above 200% of GDP and a policy rate still at just 1%, Japan is trapped. Whether the Bank of Japan finally hikes aggressively or stays timid, the result spills into the United States, potentially forcing the world’s largest holder of US Treasuries to dump its $1.1 trillion position. Schiff calls Japan the pin that pricks the far bigger US bubble. Meanwhile the US 30-year yield hit a 20-year high of 5.16% on more than four times the debt of 2006, oil is up 30% in July guaranteeing a hotter CPI, and gold rose on the week even as bonds and stocks fell, with the miners signaling a bottom. He closes on why record-low jobless claims are meaningless in a gig economy and why Trump’s new slave-labor tariffs are an unconstitutional tax on Americans.
Chapters:
00:00 Japan Sparks US Crisis
00:41 AI CapEx Reality Check
07:51 AI Bubble Parallels
13:03 Gold Miners Rebound
19:17 Oil Bonds Warning Signs
32:16 Japan Debt Rate Trap
34:36 Weak Yen Trade Deficits
37:22 Japan Creditor Status Slips
41:22 Two Japan Crisis Paths
44:26 US Vulnerability Dominoes
45:21 Unemployment Claims Hype
47:20 Why Claims Mislead
51:37 New Tariffs Legal Workaround
59:03 Wrap Up Subscribe Call
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