Watch This Before February 8th Japan s Bond Market Is About to Flip The Global Economy

On February 8th, 2026, Japan is going to make a decision on money printing, which is going to impact not just the Japanese economy, but the United States dollar and the United States stock market. So if you are an investor, you want to pay attention to this because Japan is the largest foreign owner of United States dollars, and the Japanese economy has been struggling. Now, that's a problem because if they are forced to sell these United States dollars, that can obviously hurt the value of United States dollars, causing more inflation, and that can impact the United States economy. Well, to understand what's coming on February 8th with the Japanese economy and money printing, you have to understand how they got into the situation in the first place because the Japanese government and economy have been seeing an era of deflation, not inflation. Now we all understand what inflation is. It's the prices of things going up because the value of the currency has been going down. Deflation is the opposite. It's the prices of things are falling. Now that's good if you're a consumer because that means the $100 you have in your bank can buy you more stuff, but it's not good for the government because now asset prices have been falling. And so over the last number of years and decades, the Japanese government has been working to stimulate their economy with things like money printing and extremely low interest rates. Now when I say low interest rates, I'm not talking about 1% interest rates or even 0% interest rates. I'm talking about negative interest rates. And this is a weird concept to think about because we all understand what positive interest rates are. I borrow $1,000 from you and then I pay you back the $1,000 plus interest, $100 of interest. Negative interest rates are a little bit different. I borrow $1,000 from you and then I pay you back just $900 because it's a negative interest rate. And you're going to say, well Jaspreet, why would anybody do these sort of negative interest rates? And the reason is, is because number one, if I'm going to lose less money by giving it to you in a negative interest rate than I would putting it somewhere else, that's one reason why I might give it to you at a loss. But reason number two is the largest and majority lender to the government of Japan is none other than the Bank of Japan, their central bank. So they were okay losing money in all these loans because, well, they're the central bank and if the government tells them to do so, I guess they listened. Plus they were able to justify it because they've been seeing deflation, not inflation. So they were able to justify all these negative interest rate loans. Well, now that has changed because now all that money printing, all those negative interest rates are starting to catch up to Japan because now they have an inflation problem, not a deflation problem. Why does that matter today? Because now the government of Japan is trying to decide what they want to do next. And the government of Japan, the prime minister is currently there, wants to do more money printing. But in order to do that, they need this approval on February 8th in order to do that money printing. If they don't get that approval, they may not be able to do that money printing to the same extent as they were looking for. That's why this matters. And this money printing is going to impact interest rates in Japan, which has a direct impact here on the United States stock market. And I'm going to explain exactly why. The reason why is because number one is a concept called the yen carry trade. And what that means is Japan has had the lowest interest rates of any developed country in the world. You could essentially borrow money for 0%. So what Wall Street institutions and many banks and investors have been doing is they were going to Japan and borrowing yen for essentially free. Now they were borrowing these huge sums of yen and then they would dump it into assets in the United States, things like stocks, things like crypto, things like real estate. Because if I can get a 6% return on my investments here in the United States, that's 6% on my investments, 0%. It's an infinite return because I'm borrowing the money essentially for free. And then any return that I get is a positive return. And this yen carry trade was a huge source of buyers into the United States stock market in 2024, 2023, 2022 and previous years. So the concern is if the Bank of Japan and the Japanese government now start to raise interest rates and they cool down their stimulus, well, there's going to be less buyers for stocks here in the United States because you won't be able to borrow that money at the same rate. Not to mention that there are concerns about the Japanese economy. Because right now in Japan, 79% of Japanese mortgages are variable interest rate. Compare that to under 10% here in the United States. So if interest rates continue to go up in Japan because right now they have the highest interest rates that they've seen in about 30 years, that means that those homeowners in Japan could be and will be facing higher interest rates. And if you don't have the income to continue supporting those higher interest rates, that can lead to more foreclosures, that can lead to more defaults. We've seen this happen here in the United States during the 2008 crash. Not to mention, number three, Japan is the largest foreign owner of United States dollars, United States treasuries. The Japanese economy owns about $1.2 trillion of United States government debt. Now one of the reasons for that is if you are an investor in Japan and you're trying to decide where you want to put your money and the Japanese government is paying you a negative interest rate, the United States government is paying you a positive interest rate, not a huge interest rate, I mean if you lend money to the government today you're not getting huge returns, you're getting a few percent, but that's a whole lot more than the negative interest rates you're getting in Japan, or you were getting. Well if Japan continues raising their interest rates and now the Japanese government is starting to pay real rates of return, which is not too far off now from the United States government because Japan is having positive interest rates, you might say, you know what, instead of me lending my money to the United States government where there's concerns about inflation or the economy or all this other stuff, I'm just going to now lend my money to the Japanese government. That creates concerns of yields here in the United States because if the United States government now has to incentivize people with higher interest rates to get more people to lend money to the United States government, that can impact, number one, how much interest the United States government pays, but it can also impact your mortgage rate, it can impact your car loan rate, it can impact your credit card interest rates, because this interest rate that the United States government sets, this treasury yield, that's what it's called, is the baseline of interest rates in our economy. And that interest rate that the government pays depends on supply and demand. When there are more lenders to the United States government, they don't have to raise interest rates as much. But when there aren't as many lenders to the United States government, they have to raise interest rates to incentivize people to want to lend money to the United States government. So the concern is, on one hand, if the Japanese economy continues raising interest rates, we could see less buyers of this United States debt, which could force the United States government to raise interest rates, which could make it more expensive for our government, which could make mortgage rates and other interest rates more expensive as well. That's why you want to pay attention to this. Now we don't know what's going to happen on February 8th just yet, but you want to pay attention to this because we have seen a direct impact of things happening with the Japanese bond market, the Japanese money printing and interest rates on the United States stock market on multiple instances now over the last 12 to 18 months. And we know that the Japanese economy already has a record amount of debt relative to the size of their economy. Japan has roughly a 240% debt to GDP ratio. You can compare that to the United States, where we have about a 120 to 125% debt to GDP ratio. So here in the United States, you've heard about this $38 trillion worth of national debt that we have. How big of a problem that is, we've heard that constantly. Well Japan has a problem twice as big for the national debt. And now they're thinking about printing even more money, more aggressively to continue stimulating their economy. That's what's going on there. And the reason why it impacts the United States is because number one, the Japanese are big buyers of United States dollars. Number two, many investors have been going to Japan to borrow yen and then converting that yen to United States stocks, United States assets. And then number three, this can impact the Japanese economy. And because we live in such a globalized economy now, that impact on the Japanese economy can obviously affect us here in the United States. Now what does this mean for you? Well, if you are an investor, you want to understand the opportunity because we know that the Japanese economy is shifting. What do we mean by shifting? Yes, I know there's changes happening with interest rates and all that other stuff. But on top of that, the Japanese economy is changing how they operate their economy because of these changes that they're having. Previously, the Japanese economy was a stakeholder-first economy. Every company has multiple stakeholders. Employees are stakeholders. Shareholders are stakeholders. Customers are stakeholders. And so the Japanese economy had a stakeholder-first economy, which meant companies weren't just in the business of growing the stock price. They wanted to take care of their employees and their customers and their shareholders. Compare that to the United States where we are a shareholder-first economy. CEOs have a fiduciary duty, meaning a legal obligation to the shareholders, meaning a CEO of a company has a duty to raise the share price of a company. That is what their job is. So the United States has a shareholder-first economy. Japan had a stakeholder-first economy, but now Japan is transitioning to a shareholder-first economy as well, kind of like the United States, because of the changes that are happening. So if you think that that creates opportunity for you, you can consider investing in the Japanese economy. There are funds, ETFs out there that can give you exposure to the Japanese economy. Now listen, investing has risks. You're never guaranteed to make money when you invest. In fact, you will lose money at some point, so make sure you always do your own due diligence. Never blindly trust a random guy on YouTube. My goal here is to help you to understand what's happening in the economy. That way you can make better decisions for yourself, because there's changes that happen and some things are going to be right for you, some things are going to not be right for you. Additionally, at the end of the day, we know that investors win in this economic system, period. Unfortunately, we're never taught this, but as an investor, we have seen time and time again that over the long run, they're the ones that benefit from the way their economic system works. So, at the end of the day, the way you win is by investing somewhere. I don't care where, just get started somewhere. The reality is diversification across assets, real estate, stocks, crypto, gold, startups, that is the way that you can protect yourself across asset cycles and economic cycles, because we know that markets move up, markets move down, and certain assets move up and down at different speeds and at different times. So, instead of trying to perfectly time the market, own the market, because I don't know what's going to happen tomorrow, but you can own a little bit of everything. Now, if you are an investor or want to become an investor, I have a brand new and free investing master class where I walk you through how you can get started as an investor and find hidden investment opportunities. Before everybody else, I'll show you the exact framework that my firm and I use to research investments before they hit the headlines. When you register for this master class, you're going to get access to market briefs, which is my newsletter for investors, completely free as well. So, if you want to get the investing master class and market briefs for free, I've got the link for you down in the description below. And if you got value out of this video, the best thank you is a referral. So, if you could, please share this video with a friend, family member, colleague, or fellow investor. That way we can continue to spread this type of financial education. Thank you. 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