...US and Japan about to discuss matters relating to bond market.
...Trump 2.0 brought this bond turmoil to his own turf. Now at its time of fragility, traditional US allies like EU and Japan are shunning US Treasuries and may actually in need to sell it down to finance their own domestic priorities. In Japan's case, to help support its own beleaguered bond market, and in EU's case to fund a new era of defence renaissance.
BREAKING NEWS
THE EUROPEAN CENTRAL BANK IS WARNING THAT A FUNDAMENTAL REGIME SHIFT COULD BE UNDERWAY AS INVESTORS RETHINK UNITED STATES ASSETS
The world is becoming awake.
Will This Nightmare Be What Is Going To Unleash The Global Reset?
May 21, 2025
Will this nightmare be what is going to unleash the global reset?
This Is The Silent Collapse
May 21 (King World News) – Gregory Mannarino, writing for the Trends Journal: CORPORATE DEBT RISK: This is the silent collapse. And it’s building beneath the market/economy.
So, why is this the Canary in the Coal Mine?
The bond market, especially corporate debt, always signals trouble before stocks do. Look back on history for as far back as you want to go. Because unlike stocks which thrive on hype, illusion, and buybacks, debt must be paid. And the moment companies cannot roll over their debt, OR refinance it affordably, OR pay it from earnings… well, it’s just over.
THIS IS WHAT’S HAPPENING
Corporate debt maturities are hitting NOW. Corporations loaded up on cheap debt during 2020–2021.
Right now, high-yield spreads are quietly widening. This means that lenders are demanding more compensation for risk, and it is getting bigger. With this, cash flow is shrinking across sectors. Revenue is flat or declining due to inflation, consumer weakness, and slower global trade.
That makes debt harder to service. Defaults are accelerating, but hidden. Smaller companies and zombie corporations, (a Zombie Corporation is a company that can’t generate enough profit to cover the interest payments on its debt). These are quietly defaulting or restructuring. Moody’s, in a recent publication stated that the U.S. default rate on speculative-grade debt is rising toward 6 percent.
WHY IS THIS SO DANGEROUS?
Because corporate debt is the connection between Main Street, Wall Street, and the banks.
If enough of this turns toxic, banks themselves will get hit with downgrades and capital buffer issues. (Yes, these banks have a mainline to The Fed, but here again—IF THIS WERE TO “GET OUT,” it would shake CONfidence in the system).
With that, ETFs and pension funds holding this debt start hemorrhaging value. This will freeze up credit issuance. Here, is where The Fed will slash rates, (which we all know is coming), and in doing so RAPIDLY DESTROY whatever is left of the purchasing power of the dollar and BOOM! A new system will emerge.
