Investors looking for potential trouble ahead should not focus on inflation indices such as the CPI or GDP. Instead, they should pay close attention to foreign exchange markets, specifically the Japanese yen.
Japan’s government has been heavily reliant on debt for years, with their debt levels being twice that of ours. They have also kept interest rates low, which is about to change due to inflation. The era of free money is now over and the yen is weakening. This will cause significant economic and political shock waves in Japan, potentially leading to talk of devaluing their currency and instituting tariffs.
However, this is not just a problem in Japan. All currencies are currently unstable, so investors should expect noise about tariffs, devaluations and trade restrictions – actions reminiscent of the beggar-thy-neighbor policies of the 1930s that led to WWII. Keep an eye on Twitter for updates and securely tip me with your thoughts.