Cryptocurrency expert Arthur Hayes believes the Democrats could manipulate the stock market to their advantage before the upcoming presidential election. He suggests a strategy involving the Federal Reserve (Fed) and the Bank of Japan (BOJ) to boost the US stock market.
A Global Stock Market Wipeout
Recently, the global stock market experienced a significant drop, losing $6.4 trillion in value. This was triggered by the unwinding of the “yen carry trade,” where investors borrowed cheap yen and invested in riskier assets like stocks. When Japan’s central bank raised interest rates, the yen strengthened, forcing investors to sell their assets and buy yen to pay back their loans. This led to a panic-selling frenzy.
A Stealth Bailout?
Hayes proposes a solution: the US Treasury could secretly lend dollars to the BOJ using yen as collateral. This would allow the BOJ to print more yen to control the currency’s value. Hayes believes this would lead to increased dollar printing by the Fed, ultimately boosting the US stock and bond markets.
Benefits for Both Countries
Hayes argues that this strategy would benefit both the US and Japan. The US would see a stock market rally, potentially helping the Democrats in the election. Japan would be able to stabilize its currency and avoid further economic turmoil.
A Controversial Idea
Hayes’s theory has been met with skepticism. Critics argue that this plan would be highly risky and could lead to inflation. However, Hayes believes it’s a necessary step to prevent a global financial crisis and ensure the Democrats’ success in the election.
It’s important to note that this is just one expert’s opinion and should not be considered financial advice. Always do your own research before making any investment decisions.
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