Japan Just Triggered the Biggest Unwind in Financial History - GET READY NOW!
By Felix & Friends (Goat Academy)
Summary
## Key takeaways - **Japan's 234% Debt-to-GDP Ratio**: Japan's debt-to-GDP ratio is 234%, double the US level at 120%, making it the most indebted major economy on the planet with no precedent of survival without default or hyperinflation. [01:30], [01:56] - **Carry Trade Collapse Triggers $20 Trillion Unwind**: The $20 trillion carry trade of borrowing near-zero yen to invest in US assets is breaking as Japanese rates rise to 1.8%, forcing sales of US Treasuries and leveraged positions with margin calls. [09:46], [15:07] - **Japan Holds $1.2 Trillion US Debt**: Japan is the largest foreign holder of US debt at $1.2 trillion, and rising home rates will prompt pension funds and insurers to sell, flooding the market. [08:45], [11:24] - **US Rates Spike, Economy Strangled**: Japan selling US debt drives bond prices down and rates up, adding $200-300 billion in annual US interest costs, leading to inflation, spending cuts, and higher mortgage/car loan rates. [12:16], [13:08] - **August 2024 Precedent: Markets Tanked**: In August 2024, Japan's rate hike caused Bitcoin to drop 23%, NASDAQ 10%, S&P 8% in one week, called Black Monday panic. [13:39], [13:57] - **Winners: Energy, Materials, Pricing Power Tech**: During instability, favor energy like oil/gas, materials/mining including gold/silver miners, and tech with pricing power like Microsoft, Apple, Coca-Cola; avoid debt-heavy firms, banks, discretionary consumer stocks. [17:03], [18:34]
Topics Covered
- Japan's 234% Debt Trap Explodes
- Stimulus Spikes Rates, Shatters Confidence
- Carry Trade Collapse Floods US Treasuries
- Japan Dump Triggers US Debt Crisis
- Position for Energy, Pricing Power
Full Transcript
your 401k, your stock portfolio, they just got a lot riskier and you probably don't even know it yet. Right now, as I'm speaking to you, Japan, the country
that owns more of America's debt than any other nation on Earth, is facing a financial crisis that could send its tsunami waves all the way into your
retirement account, your mortgage account, and the US stock market overall. We're literally talking about
overall. We're literally talking about $1.2 $2 trillion in US Treasury bonds potentially flooding the market. We're
talking about a 20 trillion carry trade on the verge of collapse and a debt bomb that makes 2008 look like a warm-up act.
I promise to you is that by the end of this video you'd understand exactly what's happening. Why Walt isn't telling
what's happening. Why Walt isn't telling you anything about it and most importantly what you can do to protect yourself, maybe even benefit before this thing blows up. My name is Felix P. I'm
an ex-investment banker. I've seen how the financial shenanigans, sorry, the financial industry works from the inside. I'm also the founder of the Go
inside. I'm also the founder of the Go Academy where we've taught over 20,000 students so far how to become better and safer investors and traders. I'm also
the co-founder of Trade Vision where we give you access to the real life news and data that Wall Street has access to.
This back there is Winston. He's our
chief research hound. He has a very large nose and he's very good at sniffing out and explaining Japanese markets. Let me just walk you through a
markets. Let me just walk you through a couple of data points here. Japan's debt
to GDP ratio is 234%.
234%.
Think of it this way. Imagine you make 50,000 a year, but you own 117,000 in debt. It's pretty bad, right? On a
debt. It's pretty bad, right? On a
credit card. Now, for context, the US is about halfway there at about 120,000% which is already like banana republic level, but Japan is literally double the
US level. They're the most indebted
US level. They're the most indebted economy on the planet that matters. No
major economy has survived this level of debt without defaulting, basically saying, "Sorry, I can't pay you back or hyperinflation where they print so much
money that their currency becomes worthless." Zimbabwe being an example.
worthless." Zimbabwe being an example.
Now you might be wondering how did Japan get into this? Well, it goes back decades. In 1991,
decades. In 1991, Japan had a massive stock market and a real estate bubble and that popped. At
one point, central Tokyo was worth more than all of California. Just picture
that. Essentially, it was like the 2008 housing crisis in America, but much, much worse. The economy basically
much worse. The economy basically stopped growing for 30 years. It's
called the lost decades, 30 years of stagnation. Now, they did try to fix it.
stagnation. Now, they did try to fix it.
The Japanese government just kept spending more and more money, but they didn't have trying to stimulate the economy. They kept borrowing and
economy. They kept borrowing and borrowing and issuing more debt to fund all the spending. And the crazy part, they also kept interest rates at basically zero, sometimes even negative.
So, think about that. In Japan, you could borrow money for free because interest rates were zero or negative.
Actually, if they're negative, they pay you to borrow their money. It's like a credit card with a negative interest rate. The more you spend, the more
rate. The more you spend, the more you'll make right now. It's a magic trick, isn't it? How did And how did nobody call them out on this? Well, the
answer is the Bank of Japan. It's their
version of the Fed. It became the biggest buyer of their own government debt. They literally just printed money
debt. They literally just printed money and then they used it to buy government bonds with it. So they financed their own debt. It's basically like you having
own debt. It's basically like you having a massive credit card bill, but you can print your own money and then you use your own money to pay off your credit card bill. Now in the real world, that
card bill. Now in the real world, that doesn't really work. But when you're a central bank, you can actually get away with it for quite a while, 30 years
apparently. And this kept Japan going.
apparently. And this kept Japan going.
interest rates at zero and the debt is irrelevant because there is no interest, right? It's just like it's debt. We
right? It's just like it's debt. We
don't care. We don't have to pay it. But
the magic trick has just stopped working. In November 2025,
working. In November 2025, something unprecedented happened.
Japan's new prime minister announced a massive stimulus package. Talking about
130 billion in new spending. Fairly
normal in economics. You know,
government announces a stimulus. What
should happen? Well, interest rates should actually drop. Why? Because
stimulus means economic growth, which means the government will have more tax revenue to pay back its debt. That's
kind of the weird theory. Investors
usually like it when governments spend money. But Japan's bond market did
money. But Japan's bond market did exactly the opposite of what we'd expect. When they announced the
expect. When they announced the stimulus, their interest rates spiked massively to a record we haven't seen in
almost 20 years. Now, what does it mean when your interest rate goes up and you've got debt up to your eyeballs, up to your hairline even? Well, it's an
earthquake. The market is saying we have
earthquake. The market is saying we have lost confidence in Japan's ability to pay back its debt. And if you're still with me, you might be thinking, why the
heck do I care? I don't live in Japan. I
get you. Okay, stick with me for a minute because you will understand how this is a huge ticking time bomb under the US stock market and your portfolio
in your retirement. Now, here is my this is such a disaster. Japan spends 23% of all its tax revenue on interest, not paying
down debt, just interest. But when the interest rates go up like they just have a few days ago, so much of the tax
revenue would go on interest, not 23% but way more that they would not be able to pay for basic government services, right? So you get into basically like
right? So you get into basically like the shutdown that the US just had, but permanent, right? No government services
permanent, right? No government services that can work anymore because there isn't any money. So Japan now has two options.
one, they can buy they can print more money. We'll crash the yen even further.
money. We'll crash the yen even further.
It could cause massive inflation. Option
two, do nothing and well, they go go bankrupt. So, there is kind of no good
bankrupt. So, there is kind of no good option here, right? They damn if you do, damn if you don't kind of thing. Now,
before I show you how this directly threatens your money, I want to make sure you're getting the full picture of how Wall Street really works. And in our
academy we have more than a dozen of my mentors who are all ex Wall Street goats. Think Goldman Sachs, think Bur
goats. Think Goldman Sachs, think Bur Sterns, think Maril Lynch, all the Deutsche Bank and so on the big banks, the big hedge funds. And they worked for these companies for 10, 20, 30, 40, 50
years. And now you have access to those
years. And now you have access to those same mentors if you decide to go down that path. But the reason I'm mentioning
that path. But the reason I'm mentioning it is because we coach one-on-one and there is always going to be a limit to how many people we could teach one-on-one. Um, it's never really been a
one-on-one. Um, it's never really been a problem. It isn't a problem right now,
problem. It isn't a problem right now, but we are going to have to stop taking on new students in our flagship program which is called the Wall Street Protocol. Why? Because we're going to
Protocol. Why? Because we're going to get very shortly within days to a point where we'll say, "Hey, we're full. We
want to deliver for our existing students." And until those that batch
students." And until those that batch graduates, we will not take on more students in the Wall Street protocol. So
there's a little bit of urgency here. If
you ever thought about learning from my mentors um and myself, which it would be take some action now, which also happens to coincide with our Black Friday offer, which is perhaps what caused this whole
this whole wonderfulness. It makes me very happy because it just means a lot of people want to learn and we're helping a lot of people, but we want to make sure we are able to deliver you guys tremendous value and and access and innovatability. So, if you want to be
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It's completely risk- free. We won't
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succeed. So go to Felix freedom. My hope
is that that'll put you on your path to freedom. There's a link down below in
freedom. There's a link down below in the description. Now here is where this
the description. Now here is where this stops being a Japan problem and it becomes your problem. Japan is the
single largest foreign holder of US debt. They own about 1.2 trillion 1.189.
debt. They own about 1.2 trillion 1.189.
How pedantic are we? How 1.2 trillion in US debt? Um that's more than you know
US debt? Um that's more than you know the GDP of say Mexico or you know Netherlands depending on where you hail from. It's more than the market cap of
from. It's more than the market cap of Apple right it's big and over the past nine months while other countries like China
have been selling US debt Japan has actually been increasing their holdings.
Why? Because Japanese bonds pay basically nothing. So say you, imagine
basically nothing. So say you, imagine this, you're a Japanese pension fund or insurance company or something. At home,
you get zero returns.
Well, you go to the US and you get four or 5%. So what are you going to do?
or 5%. So what are you going to do?
You're going to buy American debt, right? It's just it's just like purely
right? It's just it's just like purely logic. But here's the problem. The math
logic. But here's the problem. The math
just broke when Japanese bond yields were at zero.
And the US, this is what it was, it's been like for years. Japan, free money, right? So you can borrow in Japan and
right? So you can borrow in Japan and you can send the money to the US and you get 4.75%.
It's free money. So if you're a financial institution, you're going to borrow as much as you possibly can and you're going to send all that money and buy US government debt with it because US government debt is zero risk, right?
So what could possibly go wrong? You're
just going to make 4.75% on money that wasn't yours. It isn't costing you
wasn't yours. It isn't costing you anything. This is like the greatest
anything. This is like the greatest getting rich scheme ever, right? Missup
Ponzi is turning in his grave thinking, I should have thought of that, right?
But now, well, Japanese debt is already giving you 1.8% right now. 1.8%.
right now. 1.8%.
Now, US interest rates have come down.
You get about 4.2%. So, the difference is shrinking. You might be thinking,
is shrinking. You might be thinking, it's still a good business. It's still
free money. Well, they hedge their currency and that costs some money and it's gotten more expensive. So, this is no longer like the obvious 100% money
making guarantee Ponzi scheme that it's been for decades. So, suddenly keeping your money at home in Japan makes some sense. And that's why a lot of people, a
sense. And that's why a lot of people, a lot of analysts are predicting a massive wave of money leaving the US so it goes back home. Japanese insurance companies,
back home. Japanese insurance companies, pension companies, and banks have trillions of dollars invested in US assets. As Japanese interest rates rise,
assets. As Japanese interest rates rise, the maths on that stops making sense.
So, they're going to start selling US government debt. They're going to bring
government debt. They're going to bring the money back home. We're not talking about a little bit of selling. We're
talking about hundreds of billions, maybe even that full 1.2 trillion over time, leaving the US markets. Now, why
does it matter to you? Because the US government is addicted to borrowing just like the Japanese. The US pays a trillion in debt. Interest just
interest. It's more than national defense. It's more than Medicaid. It's
defense. It's more than Medicaid. It's
more than veterans benefits. Interest on
debt is now the third largest item in the government budget. Right? Only
social security and Medicare is a little bigger. Now imagine what happens when
bigger. Now imagine what happens when Japan, the US's biggest lender, starts selling billions of US debt. there are
when there are more sellers than buyers, what happens? Prices go down. Now, what
what happens? Prices go down. Now, what
happens when bond prices go down? And
this is not obvious. It's always bends my head, too. When the price of a bond goes down, the interest rate on that
bond goes up and that makes debt more expensive. US is already paying a
expensive. US is already paying a trillion in debt. If it goes up just 1%.
So when rate goes up 1% just 1% you have about an extra $200 to $300 billion in interest just for the US. So where does
the money come from? Well, what are your what are your choices? Well, you cut spending.
Like that's never going to happen, right? Politicians, it's it's a
right? Politicians, it's it's a popularity contest. They're going to do
popularity contest. They're going to do the popular thing, not the responsible thing. You could print more money. What
thing. You could print more money. What
does printing more money do? Causes
inflation. It devalues every dollar you own. But it also affects you more
own. But it also affects you more directly because the interest rate of the government is the basis for everything else. So your mortgage rates
everything else. So your mortgage rates will go up, your car loans will go up, your credit rates will go up, business loans which will go up, which is how you
strangle the economy. And that's how Japan affects you no matter where you are in the US or actually anywhere in the world because you all have exposure
to American stock markets. Now, we've
seen this before. August 2024, go back on my channel, August 2024, I walk you through back there. Back then, too, Japan raised interest rates for the
first time in 10 years. Within one week, Bitcoin went from 65 to 50,000 minus 23%. The NASDAQ dropped 10%, the S&P
23%. The NASDAQ dropped 10%, the S&P fell 8%. We called it black Monday
fell 8%. We called it black Monday panic. Now it was temporary because the
panic. Now it was temporary because the Bank of Japan backed off and market stabilized. But right now the market is
stabilized. But right now the market is forcing Japan's hand and they're basically saying this trade, this Japan trade, this borrow free money and invest
it in the US trade is broken. It is
gone. It is permanent. And maybe this Japan trade is still a bit like fuzzy to you, which I would get because it's a strange concept. Let me walk you through
strange concept. Let me walk you through an example. Here is what you do in the
an example. Here is what you do in the past, right? Be financial institutions
past, right? Be financial institutions have been doing this for decades. You
borrow $100,000 from Japan and it costs you basically nothing. Maybe $500 a year, maybe nothing at all. You then
invest that money in buy US bonds with it, US government bonds with it, and you make $4, $250 profit on this. What do
you do with the profit? Well, you put the profit into stocks, into bonds, into real estate in the US. And imagine you don't do this with $100,000, but with $100 million or a billion dollars or
hundred billion, right? And you start to see it's just free money. Why would you not do this? And in fact, the whole trade is worth about $20 trillion. So
one or two people have heard of this, right? That's larger than the US
right? That's larger than the US economy, by the way. And they've just been getting free money by borrowing for nothing and basically lending it to the US. Now, this actually gets worse. I'm
US. Now, this actually gets worse. I'm
not going to walk you through the numbers because it's a bit tedious, but take a screenshot of this if you're interested. Basically, these hedge funds
interested. Basically, these hedge funds are doing these trades, they borrow.
They borrow heavily. They leverage
heavily. This isn't their money, which means a small loss becomes a catastrophic huge loss and they have to sell everything to survive another day.
It's basically like a margin call.
That's essentially what it is. Like they
have to sell. Now, you probably didn't know what the carry trade was as of right now and and and you still don't really know how it affects you. Well, if
you own an S&P index fund, if you have a tech heavy portfolio, if you have any cryptocurrency, you own a REIT or any kind of bonds, then you are exposed to this carry trade and its risk. You
didn't make the carry trade yourself, but the institutions that own these assets alongside you, they did. And when
they are forced to sell, well, your assets go down with it. So, Wall Street doesn't really like talking about it.
But they've built this massive interconnected web of borrowing. And
when one of those threads in that network breaks, the whole thing can actually unravel. But there's good news.
actually unravel. But there's good news.
We've seen this play out before, not quite as big as this, but we know what the what the concept is here. And the
concept is that if you're selective with your stocks, you can actually come out a winner out of these things. First of
all, you have to understand the concept.
So, well done for watching this far. And
the winners are typically these companies in these sectors. Okay, it's
not financial advice. It's my humble opinion based on my research and of course Winston's research back there is snoozing under the Christmas tree.
That's very cute, isn't it? Um Winston,
what's your favorite sector for um hyperinflation? Yeah, we're not going to
hyperinflation? Yeah, we're not going to get much out of him. Thankfully, we got a we got a presentation out of him first. So, what have we got? Energy
first. So, what have we got? Energy
companies. Oil and gas typically does quite well unless the economy completely tanks. Different story. Unlikely to with
tanks. Different story. Unlikely to with the kind of government spending we have in my opinion. uh materials and mining and we've been liking a lot of like gold miners, silver miners this year has a lot of money. Gold and silver miners,
there we go. But also other, you know, rare earth plays and so on. And then you don't have to sell every tech stock out there, but you want to focus on your
stocks with real pricing power. Who has
real pricing power? Well, if some the brand raised prices by a dollar, would you still buy it or would there be an alternative you could possibly buy? This
is where you got to ask yourself. So say
um I've got some of Winston's chew bolts on here. If these became significantly
on here. If these became significantly more expensive, I would probably buy a different brand, right? Because Amazon
was suggested to me these are great actually. Chucket is the brand. Love
actually. Chucket is the brand. Love
these. They're bouncy and they glow in the dark. So that's not product
the dark. So that's not product placement. We don't do that around here.
placement. We don't do that around here.
Just genuine Winston experience. He
loves these. They're really bouncy and you can find them when you throw them in the dark, which is what we do every night now. So it's companies with a big
night now. So it's companies with a big tech mode, right? Can't replace it. It's
Microsoft. It's Facebook because it's hard to get whatever many users they have, three trillion or something, right? Apple, pretty hard to get a
right? Apple, pretty hard to get a billion people even to um it's a bit of a Biden moment there, isn't it? Um hard
to get a billion people to buy your phone, right? Um Coca-Cola, you create
phone, right? Um Coca-Cola, you create an addictive taste. There are loads of these companies out there, but you just don't want to be in the one that's selling something that's pretty generic.
Think about that. That's a big one. Um,
companies with lots of debt are a problem. That's why I'm a little bit
problem. That's why I'm a little bit concerned about all this AI spending because that's all debt fields are starting to be. Um, banks could get hit pretty hard because they will have
exposure this to this trade. They will
own a lot of these assets, right? And
the consumer is going to get scared. So,
discretionary consumer stocks, what is that? Well, you know, Macy's, Nike, that
that? Well, you know, Macy's, Nike, that sort of thing. stuff you want to buy, but you don't have to buy. Now, flip
side to that, your box stores, you know, your discount stores, they typically do quite well because you're still going to buy groceries and stuff you need. So,
you're going to go to the the cheaper.
So, you want to really own businesses that produce real things with real value that their customers need. They can't
replace them easily. So, what can you do right now? Assess your exposure. How
right now? Assess your exposure. How
much of your money is in dollar assets?
That might be 100%. For me, that's nearly 100%. I actually don't mind
nearly 100%. I actually don't mind doubt. But you want to diversify. You
doubt. But you want to diversify. You
can put some percent of money into gold and silver. I'm not saying a percentage
and silver. I'm not saying a percentage here. That's just a random sort of
here. That's just a random sort of number. It could be 5%, 10%, whatever
number. It could be 5%, 10%, whatever you feel comfortable with. Pay down debt that has a variable rate. If you have a loan that has an interest rate that can
change, do something about that. Right?
Companies, we want to focus on strong balance sheets. It's a workbook that
balance sheets. It's a workbook that comes with this thing, this video that you can download that'll give you a lot more insight on the whole the whole shebang together. Uh we also have
shebang together. Uh we also have something called better stocks GPT which is a tool I build where you can see how strong every single stock is. You just
type it in um and that's part of our free community which is down below Felix stocks as resource which is also where you you get the workbook and then you want to stay informed. I do
that by using our app trade vision. um
we get the news like that just alerts but really you want to have a plan what will you actually do if the market crashes right and I give you quite a lot of information around that on this
channel here check out our educational playlist because you need to have the awareness and the knowledge we have some of that now but you also need to know
how you take action right and for me my experience with thousands and thousands of students is that really the only way you build up that confidence is by having the ability to get some feed
feedback live when the market moves and and and as I said, book a free call with us felix.org/freedom
us felix.org/freedom before we close the Wall Street protocol this week for new enrollments. So, early
warning system, take a screenshot of that. I'm not going to run you through
that. I'm not going to run you through every single number here. It would get tedious, but take a screenshot of that so you know what to watch out for. Uh
here's some more indicators. Super super
useful. And yeah, you got that out. You
got a screenshot? Yeah. Brilliant. Okay,
so bottom line, something big's breaking and we tried it last year and they backtracked, but this time it's a lot more serious. So you now know more than
more serious. So you now know more than 99% of people. Seriously, bit of a long concept, bit of a complicated concept, but you now understand it on a high level. Uh so therefore, you are not
level. Uh so therefore, you are not helpless. So you got to just figure out
helpless. So you got to just figure out what do you do with this information.
I've given you some options. Hop into
the free community or simply book a call with us, free strategy call. See if
mentoring from some Wall Street goats is what would take you to your goals and your targets and your freedom. And if
you got some value out of this video, share it with somebody who might also get some value out of it. Winston and I say thanks for watching and we wish you great success. If you have a 401k or you
great success. If you have a 401k or you own the S&P or the NASDAQ or straight out Nvidia stock, then what I'm about to show you could save you or cost you
thousands if not hundreds of
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