Japan Is About To Pop The Biggest Bubble In History... And It Takes Us With It

The yen just hit a 40-year low and Japan is trapped. Whether they hike or freeze, it ends the same way: the pin that pricks our bubble.

Investors are far too complacent about risks that are now hiding in plain sight. The AI trade cracked this week: Alphabet (GOOGL) fell 10% after announcing even higher CapEx, Oracle (ORCL) is down 41% on the year, Meta (META) and Amazon (AMZN) fell, and Microsoft (MSFT) is nearly in a bear market. SpaceX (SPCX) now trades 49% below its post-IPO high with its float set to jump from 5% to 40% by year-end, and Tesla (TSLA) dropped 18%, costing Elon Musk nearly $100 billion in a week. Peter Schiff compares the roughly three-quarters of a trillion dollars in annual AI CapEx to the dot-com build-out, where the early favorites went bankrupt and took their vendors down with them.

The bigger danger is Japan. The yen fell to a 40-year low against the dollar, the 30-year JGB yield hit an all-time high near 4%, and with debt above 200% of GDP and a policy rate still at just 1%, Japan is trapped. Whether the Bank of Japan finally hikes aggressively or stays timid, the result spills into the United States, potentially forcing the world's largest holder of US Treasuries to dump its $1.1 trillion position. Schiff calls Japan the pin that pricks the far bigger US bubble. Meanwhile, the US 30-year yield hit a 20-year high of 5.16% on more than four times the debt of 2006, oil is up 30% in July, guaranteeing a hotter CPI, and gold rose on the week even as bonds and stocks fell, with the miners signaling a bottom. He closes on why record-low jobless claims are meaningless in a gig economy and why Trump's new slave-labor tariffs are an unconstitutional tax on Americans.

Video Length: 01:01:27