French Banks Risk Causing Global Volatility as Key Lenders to the World Bloomberg]
Putin seals strategic partnership with North Korea [FT]
China warns of possible 'trade war' with EU Reuters]
Israel Says It's On "Brink" Of Wider War With Hezbollah [Zerohedge]
Internet confuses people over US military draft change... here is the truth [Independent]
FlowBank halts onboarding clients after deemed bankrupt by FINMA [Forex Factory]
The Lost Decade is commonly used to describe a period in Japan beginning in the 1990s, during which economic stagnation became one of the longest-running economic crises in recorded history. Later decades are also included in some definitions, with the period from 1991 through 2011 (or even through 2021) sometimes being referred to as Japan's Lost Decades. Investopedia
To understand how Japan rose from an economic minnow to the second biggest economy in the world, followed by a huge crash and decades of depression, you have to understand why foreign exchange rates are the most important drivers of economic success and failure.
There is a great high level financial but non-technical video by ColdFusion
Japan's Lost Decade - An Economic Disaster [Documentary] [YouTube]
Politicians shouldn't mess with foreign exchange rates because FX markets are too big and powerful.
For Japan fixing USD / YEN at 1USD = 360 YEN just after the war created a monster manufacturing economy.
When Japan became too big the Plaza Accord attempted to reverse it when the rate was 150 but it overshot to 90.
Having to slash interest rates to zero to attempt to devalue the Yen, printing money to monetise insane private and government debt levels lead Japan into 30 years of depression.
USD / YEN since 1960s
Japanese Interest Rates Since 1970
Now that USD / YEN is back at 160 for the first time since 1960, their economy should be picking up as their export sector becomes more competitive.
But that won't happen because Japan has a rapidly aging population, their young people don't want to have families or even sex because of financial stress.
Japan is the largest holder of US Treasuries and if they intervene to support their currency they'll have to take their losses on those bonds. And the US might go rogue, sanction Japan and confiscate those bonds.
It's a wild conspiracy theory and who knows how the US empire will react when it does fall?
And now the US has put Japan on watch as a potential currency manipulator.
US Adds Japan to Currency Watchlist as Trade Partners Struggle With Stronger Dollar
Don't mess with FX markets. Look what happened on Black Wednesday when Thatcher set the pound's value too high in the old European Rate Mechanism. Black Wednesday refers to September 16, 1992, when a collapse in the pound sterling forced Britain to withdraw from the European Exchange Rate Mechanism (ERM). Investopedia
The end of the Yen Carry Trade - Clive Thompson [Linkedin]
Japan Bank to Overhaul Investments as Wrong-Way Rate Bets Trigger Bond Losses [Bloomberg]
The Norinchukin Bank, a farmers bank, had to sell US$ billions of foreign sovereign bonds as it desperately tries to shore up it's balance sheet.
Japan corporate bankruptcies surge above 1,000 in May [Japan Times]
Japan Trade Balance May 2024
EURO / USD Monthly
The Euro has been in a downtrend for 20 years and cutting rates with inflation indicators rising, risks capital exiting the European economy at exactly the wrong time.
Wages in Euro Zone YoY Q1
Germany PPI May 2024
US Retail Sales May 2024
Retail sales (huge part of US economy) and housing are looking very weak.
US Housing Starts May 2024
Lumber futures are a great indicator of future demand for new homes and it's not looking good.
Lumber Futures Daily
Pensions Piled Into Private Equity. Now They Can’t Get Out.[WSJ]
USD / OFFSHORE YUAN Daily
PBoC selling USD after fix on Friday to stem the flow.
China Loosens Grip on Yuan With Weakest Fixing Since November [Bloomberg]
China’s central bank chief warns of weaker credit growth as property lending declines [FT]
China House Prices YoY May 2024
Real estate still a big problem as citizens savings now going into Gold and Silver.
China Starts Anti-Dumping Probe on Imports of EU Pork [Bloomberg]
Biden Administration to Attend Bitcoin Roundtable with Congressional Officials in DC [Investing.com]
Swiss National Bank presses ahead as rate cutting front-runner [Reuters]
UK CPI, PPI May 2024
Finally some good news for UK. Not that Sunak is going or that Brexit saved us from what's about to happen economically in Europe, but that inflation is back to target in some measures.
Inflation Returns to BOE's 2% Target For First Time Since 2021
RBA holds but hints at hikes
Australian Premier Creates Ministry In Charge Of 'Changing Men's Behavior' [Zerohedge]
Mirvac set to sell two office towers at discounts of more than 20pc[AFR]
The secret reason behind NSW’s ‘nonsense’ claim on $12b GST shortfall [AFR]
Attention investors: the risk of a sovereign debt crisis is back
Some key indicators in the US below.
Watch Middle East and Europe for escalation of wars.
And what about Biden? Democrats running out of time if they want to replace him.