For an entire generation, the global economy has been propped up by an almost invisible force. A silent, steady bid that kept interest rates low, mortgages cheap, and government borrowing seemingly limitless. But according to financial strategist Peter Grandich of Peter Grandich & Company, this “invisible bid” is vanishing in real time, and its disappearance is set to send seismic shockwaves across the developed world.
In a recent, eye-opening interview with Daniela Cambone, Grandich laid bare the profound implications of Japan’s monumental shift away from its three-decade-long role as the world’s de facto “money printer.”
For thirty years, Japan has been a titan in the global financial arena, maintaining ultra-low interest rates and engaging in massive yen printing. This era, characterized by Japan’s 10-year government bond yield breaking through 1.7%, is now definitively over.
Crucially, it underpinned the “yen carry trade,” a financial strategy where investors borrowed vast sums of cheap yen to invest in higher-yielding assets elsewhere, particularly U.S. treasuries. This allowed Japan itself to finance its enormous national debt at minimal cost while investing heavily in assets worldwide.
Grandich warns that the unwinding of this historic carry trade and Japan’s broader monetary shift poses systemic risks we can barely comprehend. Japan itself faces a staggering debt-to-GDP ratio exceeding 263%, and rising interest expenses will put immense pressure on its domestic economy.
Amidst this landscape of systemic stress and uncertainty, the conversation naturally pivots to gold. Despite its historically strong performance, gold remains significantly underrepresented in many portfolios. However, institutional interest is rapidly growing, a clear sign that sophisticated investors are recognizing its crucial role as a safe haven.
Grandich notes that the physical gold market is strengthening, a stark contrast to the often-volatile “paper” trading. This shift is further underlined by the surge in gold demand from Asian markets, particularly India and the powerful BRICS nations. As confidence in fiat currencies wanes under the weight of unprecedented global debt, hard assets like gold are reasserting their value.
Beyond the immediate financial shifts, Grandich also touches on the formidable disruptive potential of Artificial Intelligence. He warns of significant unemployment risks on the horizon, which could further exacerbate the economic challenges we face.
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The message is clear: the economic landscape is undergoing a fundamental transformation. The “invisible bid” that sustained a generation is gone, and the consequences will be felt globally. Understanding these shifts and preparing for them is no longer an option, but a necessity.
To delve deeper into Peter Grandich’s insights and explore strategies for navigating these turbulent times, including the role of gold investment, we encourage you to watch the full interview.
Watch the full video from ITM Trading for further insights and information.
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