🚨 THIS IS VERY, VERY BAD!!
I spent days looking at where the global financial system is heading…
And next year will be rough.
97% of people will lose EVERYTHING in 2026.
Not because of a classic recession or a bank run.
It’s something much bigger than that, let me explain:
In sovereign bond markets, especially U.S. Treasuries.
Bond volatility is already starting to wake up.
The MOVE index has been creeping higher, and historically that doesn’t happen without a reason.
Bonds don’t move on vibes or narratives but they move when funding conditions are starting to tighten.
What makes this worrying is that three major fault lines are lining up at the same time:
First, the U.S. Treasury.
In 2026, the U.S. has to roll and issue an enormous amount of debt while running massive deficits.
At the same time, interest costs are exploding, foreign buyers are stepping back, dealers are more balance-sheet constrained than ever, and long-end auctions are already showing signs of stress.
Bigger tails, weaker demand, less appetite to absorb supply.
That’s not a theory, it’s already visible in the data.
This is how funding shocks start.
Not with panic, but with auctions that quietly struggle.
Second, we have Japan.
Japan is the largest foreign holder of U.S. Treasuries and the backbone of global carry trades.
If USD/JPY keeps pushing higher and the Bank of Japan is forced to react, carry trades unwind fast.
When that happens, Japanese institutions don’t just sell domestic assets…
They sell foreign bonds too.
That loop puts even more pressure on U.S. yields right when the Treasury needs demand the most.
Japan doesn’t cause the shock by itself. It amplifies it.
Third, we have China.
Behind the scenes is a massive local-government debt problem that hasn’t gone away.
If stress there turns into a visible credit event, the yuan weakens, capital looks for safety, commodities react, and the dollar strengthens.
That feeds directly back into higher U.S. yields again. China becomes another amplifier, not the origin.
