Let's be honest the last five years of the stock market and the crypto markets has been nothing short of crazy. We have gone from wonderful times of very low inflation and interest rates. To where we are today with record high inflation rates and interest rates that we haven't seen in a very long time. In fact it even blows the great recession of 2008 out of the water in which that time inflation rates only reached 5%.

Since then the stock markets been booming, the crypto markets have been booming but it's all been propped up by some magic, war and wheeling and dealing around the world including a competitive world currency now.

Japan

If you're not aware the news our of Japan for the last year was rough. Their stock market has been struggling and saw one of it's biggest sell offs at the start of this month putting everyone into panic mode. The Nikkei 225 lost 13% while the USA stock market lost a little over 3%.

Japan is a focus here because of their recent history and how it shapes the finance world we live in today. In 1989 they were hit with one of the worst depressions ever losing massive amounts of value. What happened next is the country reduced rates and even in a few cases had negative rates! To get people to go out and borrow money. However what happened is people didn't really do this instead other countries speculated and started to buy up the money. What we have today is Japan being a creditor nation a way to get cheap money.

What does that mean exactly?

It honestly looks a lot like we see between crypto and tokens between them.

What it is, is that another country and take out a loan in a low interest yield country and then park it into a high interest country. This allows the country taking out these loans to earn a higher rate of return on the money and pocket the difference as they pay off the loan they took out with the low interest rate country.

This is happening once again as Japan has low interest rates and countries like the USA have heavily increased their rates. Now what throws a wrench into all of this is when Japan raises their rates as it spooks these trades happening and makes them not as profitable. This is what we saw happen two weeks ago when the stock markets crashed. (but have since recovered) This was a 15 point raise Japan did moving it from 0.1% to 0.25%.

This flash crash happened because of this swap of money between countries. Also the Japan government came out and reinsured people that they would not be raising rates again which seemed to quickly cool the market.

But this also goes to show you that If Japan ever did raise their rates rapidly like the USA did in the last two years that the would economy would most likely simply implode under the weight of it all. So when you look at this Japan has a massive edge that could really take on the world.

The Signals

Whenever it comes to investing I will always say take emotion out of it but understand it has a factor with a vast majority of others. But you can look at what others are doing.

For example large firms and large investors are selling off stocks right now and parking it in cash. That's often a sign of what is to come but doesn't always have to be a right indicator.

You also have things like house prices drastically falling at the moment. Even car prices are currently falling and it's not slow it's actully rather sizeable chunks.

We also have unemployment rates rising and we also have AI rapidly advancing to take those jobs with no real solution as to what jobs will replace those if any.
That unemployment rat is now 4.3% in comparison in the 2008 crazy we saw this rise to 10%.

This is putting a pause on everything at the moment and putting people into stocking assets they can trust over riskier investments.

All of this at the moment is being covered up by the media and the government in a big way. This is because this is an election year so bad numbers are either not shown are the narrative is manipulated in a way to make it sound like it's better than what it really is.