Looking ahead to the coming year and beyond, investors should focus less on traditional measures like inflation indexes and GDP and instead keep a closer eye on the foreign exchange markets, particularly the Japanese yen. Japan’s government has been accumulating debt at twice the rate of the United States and has kept interest rates artificially low for years. However, with inflation on the rise, borrowing costs are expected to increase, signaling an end to the era of easy money. As a result, the yen is losing value, which could have significant economic and political repercussions for Japan and beyond. There may be discussions of Japan devaluing its currency and imposing tariffs, sparking concerns of a domino effect across the global economy.
This uncertainty is not limited to Japan, as currencies around the world are facing instability. Expect to hear more about tariffs, devaluations, and trade restrictions, echoing the protectionist actions of the 1930s that ultimately contributed to World War II. It is crucial for investors to stay informed and prepared for potential shocks in the foreign exchange markets and their broader economic implications. Be sure to follow updates on Twitter and share any tips or insights for a secure exchange of information.