Japanification

But don't you think sometimes hearing from people in the US that they are almost in denial of that and they're imagining a world where that does not happen?

Certain people certainly want to slow that down, right? And there are definitely people that think China may never, ever surpass the United States because that it, you know, go through Japanification or not.

So I think if that's your assumption, but I prefer, I would think this assumption is the more, I think you ought to be prepared for the assumption that China will be bigger than you were.

It may not be much bigger, right? But just the very fact that it's objectively in all in all sort of measurements and projections that it is that, again, I don't you know, it's just it's something that the United States as the largest economy, the most powerful country for roughly 150 years.

It kinda sucked.

And, and look, we spent the last, what, three decades, 30-plus years building up the yen carry trade after this whole Japanification thing and the, the lost decades in Japan.

I mean, the yen carry trade is not just some thing everybody showed up one morning and had a meeting and said, "Okay, let's borrow yen, convert to dollars, and then buy US assets with it." No, this built up massively over a span of 30 years, and you don't just unwind it because one guy does thing in 2026.

And if you do unwind it because one guy says thing, don't expect that to be a neat and tidy operation.

And Not only is it the yield is rising that high, but the Bank of Japan owns 54% of those outstanding Japanese bonds, and the debt to GDP is about 250%.

And in a lot of conversations I had in the past, there's always talk of Japanification of economies.

And that Japan is always a bit the front runner of, so to say, what we can expect in more developed economies, post-industrialization, where this is where we see a glimpse of the future.

Obviously, there's a lot of other factors.