Japanese Banks\' Panic Bond Sell-Off Will Push Bitcoin to New Highs, Predicts Arthur Hayes

For years, Japanese banks have been scooping up US Treasury bonds to maximize their higher yield as the Bank of Japan's interest rates have remained low.

Former BitMEX CEO and market expert Arthur Hayes has shared his analysis of the looming crisis in Japan, where several banks are panic selling their US bonds.

According to Hayes, Japanese banks have been scooping up US Treasury bonds for years to maximize their higher yield as the Bank of Japan’s interest rates have remained low. However, the dynamics have changed in recent years, and now these banks are staring at massive losses as interest rates in the US rise and bond prices dip.

In a recent blog post, Hayes explained that the fifth largest bank in Japan recently announced plans to sell $63 billion worth of US bonds. Collectively, Japanese banks hold over $850 billion, most of which is in US bonds, and a lot of it could hit the market.

Hayes noted that such huge sums hitting the open market would devastate the US bonds sector, and the Federal Reserve will not allow this to happen. He expects US Treasury Secretary Janet Yellen to step in and instruct the Bank of Japan to offer to buy all US bonds from commercial banks in direct transactions that don’t affect the open market.

To compensate the Bank of Japan, Hayes believes Yellen will print hundreds of billions of dollars and hand it to BOJ through the Fed’s Foreign and International Monetary Authorities (FIMA) repo facility, which was established at the height of the COVID pandemic.

“A rise in the FIMA repo facility indicates an addition of dollar liquidity to the global money markets. Y’all know what that means for Bitcoin and crypto … which is why I thought it necessary to alert readers about another avenue of stealth money printing,” Hayes wrote.

In simpler terms, Hayes explained that as the US bonds are hitting the market and no one wants to buy them, an entity like the Bank of Japan steps in and offers to buy them all at the prevailing market price. This is what will happen with the US bonds, and it will add hundreds of billions of dollars in liquidity to the global markets.

“Just as many began to wonder where the next jolt of dollar liquidity would come from, the Japanese banking system dropped Origami cranes composed of crisply folded dollar bills upon the laps of crypto investors. This is just another pillar of the crypto bull market,” Hayes concluded.

News source：https://www.kdj.com/cryptocurrencies-news/articles/japanese-banks-panic-bond-sell-push-bitcoin-highs-predicts-arthur-hayes.html

The above is the detailed content of Japanese Banks\' Panic Bond Sell-Off Will Push Bitcoin to New Highs, Predicts Arthur Hayes. For more information, please follow other related articles on the PHP Chinese website!