The Yen Carry Trade
Extracted From Hal Turner Radio Show
The interest rate on loans from Japan has been ZERO percent for years. Soooooooo, People and businesses borrowed money in Japan at zero percent Interest. They then converted the loan money from Japanese Yen to US Dollars, and used those dollars to buy stocks, bonds, make loans to Emerging markets and so forth.
After whatever fee they paid to convert the Yen to Dollars, all the Interest or dividends they received by having those stocks, bonds, and the loans they made to others, went directly into their pocket as profit.
Now, there is actual Interest to be paid on those Japanese loans. The loans aren’t free anymore.
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