If your retirement plan depends on “normal markets,”
you may want to hear this.
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Good morning,
Something happened in Japan this week that Treasury Secretary Bessent called a "six-standard-deviation event."
That's financial jargon for something that should occur roughly once every 1.4 million years.
The country's bond market seized up.
A 40-year government bond auction attracted almost no buyers.
Yields on long-dated debt hit record highs in just two sessions.
The catalyst?
A snap election announcement with promises of unfunded tax cuts and more spending. Sound familiar? It's the same playbook that ended Liz Truss's tenure weeks back in 2022. Except Japan's debt load makes the UK look fiscally responsible by comparison.
Here's why this matters for your portfolio.
Japanese institutions hold trillions in US Treasuries. When they face pressure at home, they sell American assets. One estimate suggests risk parity funds alone may need to offload $130 billion in bonds to rebalance.
Meanwhile, Trump is escalating tensions with European allies over Greenland.
The dollar is under pressure. Gold just hit new highs.
And volatility is creeping back toward levels we haven't seen since Liberation Day.
Join me on Market Masters at 8:45 ET, and I'll break down:
How Tokyo's bond rout transmits directly into US markets
What the Greenland situation means for transatlantic capital flows
Where gold, silver, and natural gas go from here
The specific levels I'm watching to know when this selling is done
The Runner… especially our breakdown stocks…
This is exactly the environment where preparation separates winners from everyone else.
See you there.
Stay positive,
Garrett Baldwin