The US intervention to prop up the yen is not just about Japan, but about a crisis in the dollar system. Washington doesn’t want countries selling Treasury securities, as global dedollarization grows.
Excellent writing about a complex problem faced by Trumps USDollar Super Sparta that threatens the globe with sanctions and theft/extraction if they do not go along
with Mafia Don.
Meanwhile, China is clearing a path for an alternative 'gold backed' BRIC system similar to the 1944 Bretton Woods system.
China signals Japan to dump U.S. Treasuries and start buying gold to 'hedge' against inflation and free itself from the grip of the Anglo-American Rothschild cabal.
Countries that need oil and critical resources can trade with China in yuan as they have already begun to do among the BRICs and Global South to promote economic development.
"Reserve diversification is apt to gather steam." ==> True. If you look at your Table5 - the chart of Foreign Central Banks holding US Treasuries, India which used to have USD 227 Billion a year back now has USD 187 Billion. Instead, as you correctly point out elsewhere, it's stocking up on gold, Yuan and UAE Dinars.
I care more about the people they are trafficking and the children they are raping then the dollar but maybe a crashing dollar will make the white rich men finally join the fight against crazy, criminal pedophiles.
Okay. I worked with rich white men that weren’t pedophiles. They liked to travel and love their grandkids. But you do you. I know we’re fucked just trying to get people to stop fixating on the midterms as the solution when they’re obviously criminals and illegitimate now.
From Ben ..."" The US has approximately 750 military bases and other installations all around the world.Japan alone hosts 120, where more than 50,000 US troops are permanently stationed.""
Japan has been "owned" by the US since America dropped atomic bombs on Nagasaki and Hiroshima in 1945, the same year the first bases were established. Over 140,000 killed instantly, thousands of children. Ongoing after effects trauma, cancer, organ damage etc.
This current financial bailout has a price of course. US pressure on Japan to help destroy the International Criminal Court and stop any criticism of US/Israel's genocide, and ongoing wars and imperialism. What's going on is sickening and a threat to us all.
Another terrific article. However, I would like to add that Japan has been living off the US since WW2. We opened the automobile and electronics markets and all the while with the 120 military bases and 50,000 servicemen and women plus families we have covered their national defense budget. The highly favorable trade surplus shown in the graphs tells all. Japan won the Peace!
😲 It's always the previous administration. Get over whatever the previous administration did whether it was democratic or republican. The issues that we are facing now are whatever the current administration is doing. The Big Beautiful Bill harmed more Americans than anything. Reducing tax debt on millionaires and billionaires did NOT help Americans. If Trump was not corrupt why would the Anti-Weaponization Fund include that neither Trump, the Trump Family or Trump businesses could every be audited by the IRS? Even though Trump's personal attorney TODD BLANCHE who is now the US ATTORNEY GENERAL even said that though they weren't moving forward with the Anti-Weaponization Fund the government could still be held in breach of contract. Meaning the corrupt Trump could fraudulently file taxes and never be held accountable since he can't be audited. Since Trump hasn't been proved corrupt in court I'm going to say his alleged corruption. Tell me what has the Trump Administration done that they campaigned to? When do these problems become the current administration's?
The OP was explaining why the dollar system is in crisis. The OP said it started with the Russia sanctions. I pointed out the fact that the Russia sanctions were put on by the previous administration.
Now, everything you said is true, but it will be beside the point if the US dollar loses 90% of its value overnight. Currently, that appears to be an extreme projection, but if Trump renews the military assault on Iran, and Iran destroys the GCC and Saudi Arabia in retaliation, then that extreme may come to pass; certainly the petrodollar agreement will be over, and the rest of the world will be on the gold standard. That was the situation at the beginning of the Great Depression.
The complaint from the rest of the world about the US is that, regardless of who is power, the US policy is the same: abusive.
Ben, this is excellent analysis — but you do have a talent for explaining the dollar system in a way that makes the reader wonder whether they should start hoarding canned beans.
The part I think is missing from a lot of crisis analysis is the next question: what does this actually mean for ordinary life if the system deteriorates without literally collapsing?
That’s what I tried to explore in The Cost of Staying Normal: not “everything is fine,” but also not “civilization ends Tuesday.” More like: higher costs, weaker institutions, delayed services, more visible dependence on family and community — and life continuing inside all of it.
For anyone who finishes Ben’s piece thinking, “Great, so we’re doomed,” mine may be the slightly less cardiotoxic sequel.
This is the external side of the story: Washington cannot allow Japan to liquidate the Treasuries it supposedly holds as reserves, because those reserves have become load-bearing assets of the dollar system.
A few hours before reading this article, I published a short essay approaching the same intervention from Japan’s internal side. My argument is that Japan is no longer merely a highly indebted economy. It is a financial zombie.
Thirty years of suppressed corrections have distributed claims on future returns across pensions, banks, public debt and asset valuations. Normalization would reveal that many of those claims cannot be honoured. So no one dares let the zombie fall—and every rescue merely moves the adjustment somewhere else.
This article explains whose hand Japan is holding. Mine asks why neither side can let go.
Japan is not an exception. It is simply a few years ahead of the rest of us.
Excellent writing about a complex problem faced by Trumps USDollar Super Sparta that threatens the globe with sanctions and theft/extraction if they do not go along
with Mafia Don.
Meanwhile, China is clearing a path for an alternative 'gold backed' BRIC system similar to the 1944 Bretton Woods system.
China signals Japan to dump U.S. Treasuries and start buying gold to 'hedge' against inflation and free itself from the grip of the Anglo-American Rothschild cabal.
Countries that need oil and critical resources can trade with China in yuan as they have already begun to do among the BRICs and Global South to promote economic development.
This is all frankly over my head. I wish I understood finance better. But thank you for your ongoing work to try to explain all this stuff!
"Reserve diversification is apt to gather steam." ==> True. If you look at your Table5 - the chart of Foreign Central Banks holding US Treasuries, India which used to have USD 227 Billion a year back now has USD 187 Billion. Instead, as you correctly point out elsewhere, it's stocking up on gold, Yuan and UAE Dinars.
I care more about the people they are trafficking and the children they are raping then the dollar but maybe a crashing dollar will make the white rich men finally join the fight against crazy, criminal pedophiles.
“the white rich men,” are the “crazy, criminal pedophiles," no way will they, “finally join the fight,” to call for any form of justice.
Okay. I worked with rich white men that weren’t pedophiles. They liked to travel and love their grandkids. But you do you. I know we’re fucked just trying to get people to stop fixating on the midterms as the solution when they’re obviously criminals and illegitimate now.
The majority of pedophiles are relatives of the abused and "loved" them. Rich or not.
From Ben ..."" The US has approximately 750 military bases and other installations all around the world.Japan alone hosts 120, where more than 50,000 US troops are permanently stationed.""
Japan has been "owned" by the US since America dropped atomic bombs on Nagasaki and Hiroshima in 1945, the same year the first bases were established. Over 140,000 killed instantly, thousands of children. Ongoing after effects trauma, cancer, organ damage etc.
This current financial bailout has a price of course. US pressure on Japan to help destroy the International Criminal Court and stop any criticism of US/Israel's genocide, and ongoing wars and imperialism. What's going on is sickening and a threat to us all.
https://www.reuters.com/world/asia-pacific/icc-urges-japan-counter-us-campaign-against-court-2026-08-26/
Another terrific article. However, I would like to add that Japan has been living off the US since WW2. We opened the automobile and electronics markets and all the while with the 120 military bases and 50,000 servicemen and women plus families we have covered their national defense budget. The highly favorable trade surplus shown in the graphs tells all. Japan won the Peace!
As you noted, this started when the US put sanctions on Russia. That was the previous administration.
😲 It's always the previous administration. Get over whatever the previous administration did whether it was democratic or republican. The issues that we are facing now are whatever the current administration is doing. The Big Beautiful Bill harmed more Americans than anything. Reducing tax debt on millionaires and billionaires did NOT help Americans. If Trump was not corrupt why would the Anti-Weaponization Fund include that neither Trump, the Trump Family or Trump businesses could every be audited by the IRS? Even though Trump's personal attorney TODD BLANCHE who is now the US ATTORNEY GENERAL even said that though they weren't moving forward with the Anti-Weaponization Fund the government could still be held in breach of contract. Meaning the corrupt Trump could fraudulently file taxes and never be held accountable since he can't be audited. Since Trump hasn't been proved corrupt in court I'm going to say his alleged corruption. Tell me what has the Trump Administration done that they campaigned to? When do these problems become the current administration's?
The OP was explaining why the dollar system is in crisis. The OP said it started with the Russia sanctions. I pointed out the fact that the Russia sanctions were put on by the previous administration.
Now, everything you said is true, but it will be beside the point if the US dollar loses 90% of its value overnight. Currently, that appears to be an extreme projection, but if Trump renews the military assault on Iran, and Iran destroys the GCC and Saudi Arabia in retaliation, then that extreme may come to pass; certainly the petrodollar agreement will be over, and the rest of the world will be on the gold standard. That was the situation at the beginning of the Great Depression.
The complaint from the rest of the world about the US is that, regardless of who is power, the US policy is the same: abusive.
Thank you for clarifying your comment.
Great analysis, thank you! Many of other nations T-bills are held at FRB of NY, making them vulnerable. See also: https://kathleenmccroskey.substack.com/p/postponing-financial-collapse
Ben, this is excellent analysis — but you do have a talent for explaining the dollar system in a way that makes the reader wonder whether they should start hoarding canned beans.
The part I think is missing from a lot of crisis analysis is the next question: what does this actually mean for ordinary life if the system deteriorates without literally collapsing?
That’s what I tried to explore in The Cost of Staying Normal: not “everything is fine,” but also not “civilization ends Tuesday.” More like: higher costs, weaker institutions, delayed services, more visible dependence on family and community — and life continuing inside all of it.
For anyone who finishes Ben’s piece thinking, “Great, so we’re doomed,” mine may be the slightly less cardiotoxic sequel.
https://eliaswinter.substack.com/p/the-cost-of-staying-normal?r=5f7ps0&utm_campaign=post&utm_medium=web
This is the external side of the story: Washington cannot allow Japan to liquidate the Treasuries it supposedly holds as reserves, because those reserves have become load-bearing assets of the dollar system.
A few hours before reading this article, I published a short essay approaching the same intervention from Japan’s internal side. My argument is that Japan is no longer merely a highly indebted economy. It is a financial zombie.
Thirty years of suppressed corrections have distributed claims on future returns across pensions, banks, public debt and asset valuations. Normalization would reveal that many of those claims cannot be honoured. So no one dares let the zombie fall—and every rescue merely moves the adjustment somewhere else.
This article explains whose hand Japan is holding. Mine asks why neither side can let go.
Japan is not an exception. It is simply a few years ahead of the rest of us.
https://substack.com/@steffenrentschler/note/p-212521136