I spent 87 hours researching the global financial system and what I found was shocking.

2026 will be brutal.

But not because of a normal recession or a classic bank run.

It’s something much bigger.

The real risk is building in sovereign bond markets, especially U.S. Treasuries.

Bond volatility is already waking up.

The MOVE index has been creeping higher — and historically, that never happens without a reason.

Bonds don’t move on narratives or hype.

They move when funding conditions start tightening.

What makes this dangerous is that three major fault lines are aligning at the same time:

1) The U.S. Treasury

In 2026, the U.S. must roll and issue an enormous amount of debt while running massive deficits.

Interest costs are exploding.

Foreign buyers are pulling back.

Dealers are more balance-sheet constrained than ever.

Long-end auctions are already showing stress — bigger tails, weaker demand, less appetite to absorb supply.

This isn’t a theory.

It’s already visible in the data.

Funding shocks don’t start with panic.

They start with auctions that quietly struggle.

2) Japan

Japan is the largest foreign holder of U.S. Treasuries and the backbone of global carry trades.

If USD/JPY keeps rising 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.

Japan doesn’t cause the shock.

It amplifies it.

3) China

There’s a massive local-government debt problem that hasn’t gone away.

If that stress turns into a visible credit event, the yuan weakens, capital rushes to safety, commodities react, and the dollar strengthens.

That feeds directly back into higher U.S. yields.

China becomes another amplifier — not the origin.

The trigger doesn’t need to be dramatic.

A single poorly received 10-year or 30-year Treasury auction could be enough.

One bad auction at the wrong time can spike yields, tighten global funding, and force risk assets to reprice fast.

We’ve seen this before.

The UK gilt crisis in 2022 followed the same script.

The difference now is scale.

This time, it’s global.

If a funding shock hits, the sequence is predictable:

Yields jump → dollar strengthens → liquidity dries up → risk assets sell off → volatility spreads everywhere.

This isn’t a solvency crisis.

It’s a plumbing problem — and plumbing breaks fast.

Then comes the response.

Central banks step in.

Liquidity is injected.

Swap lines reopen.

Balance-sheet tools return.

The system stabilizes — but at the cost of another wave of liquidity.

That’s when phase two begins:

Real yields fall.

Hard assets catch a bid.

Gold breaks higher.

Silver follows.

Bitcoin recovers.

Commodities move.

The dollar eventually rolls over.

The shock clears the path for the next inflationary cycle.

That’s why 2026 matters.

Not because everything collapses forever

but because multiple stress cycles peak at the same time.

And the early warning is already there.

Bond volatility doesn’t rise early by accident.

The world can survive recessions.

What it struggles with is a disorderly Treasury market.

That risk is building beneath the surface long before headlines catch up.

I was one of the few who called the October top.

I’ll do it again that’s literally my job.

Many people will wish they paid attention sooner.