Trump gets QUICKLY SMOKED OUT over JAPAN SCHEME!!

When discussing the economic damage that. the Trump regime is doing to the United. States, it's important that we also. highlight how this Trump regime is. treating other countries and other. central banks in ways that are deeply. unprecedented. But of course, you know, the tariffs against the world, 50%. tariffs on Canada for hockey sticks and. all these other things, 25% tariffs. against Brazil, tariffs against this. country, 60 countries saying that they.

engage in forced labor support. And you. know, the tariffs are are one tool. that's very much publicized, but there's. a lot of financial maneuvering that's. happening behind the scenes that just. has everybody live at uncertainty, predictability, stability. It's critical. when you're talking about what made the. United States the economic powerhouse. and engine of the world and watching. that erode at the same time we watch the. US security umbrella internationally. erode as we see in the Middle East in.

Asia and elsewhere. I mean you look at. this erratic move that was made by the. United States and at least appeared. erratic where the US needed to prop up. the Japanese yen. The Japanese yen is. collapsing. There's a lot of reasons for. that. Oil prices, the war, just. long-term financial policy. They've got. a right-wing kind of MAGA government. there led by Takahishi. It's close to uh. the the the Trump regime. And the US uh. was putting billions of dollars to prop.

up the yen. Two weeks ago in Camp David, Treasury Secretary Bessant wrote and. scribbled on a note5 to10 billion to. prop up the N. But the US wanted to do. it in a way that wouldn't really screw. with the dollar's value. And so they. came up and and Besson's background was. kind of currency swaps. And that's. actually what he did, you know, for a. long time before starting his own fund. So what he did was unloaded the euro uh.

certain euro b euros that the United. States held rather um and kind of dumped. the euro holdings by the treasury. without telling the euro central bankers. without coordinating at all in order to. prop up the yen. You know kind of a. robbing Peter to pay Paul scenario with. kind of currency swaps. This is the. Financial Times headline. US euro sale. to prop up yen blindsided the European. central bank. There's no discussion with.

them that this was going to happen. So. the US sold euros to buy yen without. telling the European Central Bank until. after the trade was done. Senior. European Central Bank officials called. it an unprecedented breach of. long-standing conventions. This has. never happened before in history. Selling dollars to defend the yen would. have contradicted Besson's strong dollar. policy. Selling euros avoided that. problem. But selling a European asset to. defend an Asian currency to protect an.

American bond market without consulting. the institution whose asset was sold. more than just currency intervention. It. is reserve architecture consuming the. alliance architecture. So, one of the. big fears in Japan is that for them to. prop up the end, they were going to have. to unload US treasuries. The US Treasury. market right now is already in a very. kind of dire condition. You got the. 30-year at 5.2%. You had the 10-year rising to 5%, it's. like 4.8 something, which basically.

means all these borrowing costs by our. government at higher. It pushups, it. even pushes up a lot of the borrowing. costs that consumers, you know, have to. have to pay. It's at a time already. where the US Treasury raised its. thirdarter government borrowing estimate. to $739 billion, pushing the national. debt over $40 trillion very soon. 68. billion more than it projected in May. 2026. These are the people who call. themselves fiscal conservatives engaging.

in these shenanigans. You know, the yen. intervention, by the way, um looks like. it's struggling. I mean as well I mean. seems like pretty transparent idea to. prop it up when people have some of. those same concerns remain. You'll see. that it propped it up originally but. we're seeing some downward trajectory. regarding the yen as well right over. there. And I want to share with you um. uh what uh Bessant said uh when he was. interviewed by a Japanese media company.

over here um explaining how serious the. situation is. But he views it as well, we're allied with Japan and this is a. government we believe in the Takahashi. government because they're like a MAGA. government. So that's why we did this. but I guess at the expense of the. European Central Bank and others who the. US was allied with without even giving. them a heads up here. Just play play a. short clip of this. The the reason we. did the joint intervention was as a. symbol the US wanted to join with our.

great Japanese allies to show that we. think that the Takichi government has. the right policies that will lead to. long-term yen strengthening and we. believe that excess volatility and undo. uh yen strength could hurt indeed the. Asia region and the entire global. economy. So you don't tell the European. Central Bank. And then when he was on um. CNBC, I'll show you how they framed it that.

when he put that note on the at the. cabinet meeting two weeks ago that he. was going to do this intervention. This. is how they they called them a sly dog. They said, "You're a you're a sly dog. for doing this." Here, play this clip. >> Just got to ask you when you you're a. sly dog when when when you wrote that. down by 5 to 10 billion and and it the. printing looked so big. You've done this. before, haven't you? Where you know. people are looking over your shoulder. Uh, you know, did you need to be. reminded of things to do? Buy 10 to.

billion 5 to 10 billion in in yen. Tell. me what was really going on there. Just. a second. >> Well, I just wanted to make sure that. all the reporters looking on over my. shoulder knew also knew the symbol JPY. for the Japanese yen. So, [laughter]. >> okay. >> Instead of shorthand to yourself. >> Yeah. You you know, I I was going to. finish the list. you know, the the the. rest of the list was, you know, like go. go go and have lunch with the Supreme. Leader, play tennis with Putin, you. know, the uh but I I thought I would.

just leave it at the uh buy 5 to 10. billion of Japanese yen. >> I want to bring in Justin Wolfers right. now, founder of Platypus Economics, chief economist here at the Midas Touch. Network. What a slide dog. I mean, you. know, the good news is is that most. Americans understand the way currency. swaps work and clearly took advantage of. it. And so the horrible economy worked. People figured it out as well. I'm I'm. being sarcastic, of course. You know, setting aside that CNBC clip right here,

just talk about the damage that this is. doing generally when you are trying to. prop someone up but not telling another. central bank. all this kind of, you. know, lack of respect and and and. bulldozing down to do these. It just. looks like schemes that's are obviously. wrong. How is it impacting us here at. home? I'm just going to start with who's. writing the jokes at the Treasury. Department. They were a couple of. amazing zingers, weren't they? Those. good old chuckles really um really got.

it going. Good work. Good work, Treasury. Secretary. Um look, one part of this is. actually pretty boring. um that there. are swap lines between the US Fed and. other central banks for there that are. there for moments of when basically our. financial plumbing looks like it's going. wrong what we do is we sort of send over. some financial duct tape. That's what. swap lines are about. And nine days nine. days out of 10 if you told me that the. US government was involved in buying or. selling a particular currency, I'd sort.

of shrug my shoulders and say this al. because the problem is it involves these. dramatic words like billions and then. people like did we just give the. Japanese billions? No, we just changed. whether we had euros in our bank account. versus dollars versus yen. So really not. a big deal at some fairly profound level. about what's actually going on. It's. it's it's business as usual. But there's. two problems that stand in the way of. everything the Trump administration. does. They both begin with the letter C.

The first is competence and the second. is corruption. So I I suspect without. being sure that what this was was. competence a competence problem which is. the US Treasury. Normally this is really. wonky stuff. You have your your foreign. exchange nerds talk to you. you get on. the phone with your uh counterparts. around the world and you say, "We feel. like things are a little bit wonky in. foreign exchange markets. We're going to. get in and help." Um the competence. problem here is you're meant to get on.

the phone first. You're literally meant. to just give people a heads up. They've. got a phone for it. Um they all have. direct lines to each other, the central. bank governors. Um, you would worry. about this leaking, which is why you. want don't want it going down through. junior staff as a back across and back. up through senior staff is because if. you got early word of this, you could. make a lot of money. Um, so they didn't. make that call. I suspect there's one of. two things going on here. One is perhaps. it's a competence problem. The. secretary's joke writers might also be.

the same people who help him with. communications. They really there's a. real Keystone Cops air to all of this. The other possibility um which again I. really wouldn't say in a normal White. House at a normal moment and I hate. saying so is it could also just be a. contagious lack of grace um that when. you're working with others when you're. dealing across countries we always try. to be a little bit too gracious and if I. looked at the current White House it. doesn't feel like it's a place that's.

given to manners that's given to grace. that is about treating other people or. other institutions. Well, so that's the competent side of. this. I suspect this is just being bad. at their job. The other problem that's. often raised, I don't think it's an. issue here, but when the this. administration does stuff where normally. I'd sort of say, let presidents present, that's why we elect him. Uh, and it's. because normally presidents from both. the left and the right are trying to do.

the best thing by the American people. I. don't have that confidence about this. president. I think very few people do. and I think if I did I would be a fool. In this case, there's not an obvious. corrupt side to this. But Ben, you and I. have talked so many times about various. other economic interventions where it. might make regular sense under a regular. administration, but under this. administration, you're left thinking. maybe they're doing it for their own. benefit. I don't think that's what's. going on here. But I can't help but. think thinking they've made it so that.

we always have to be asking that. question because if you look at it, the. euro weakened sharply against the yen. immediately after that announcement uh. about a 4% decline. It's recovered a. little bit. Um, I think the idea of kind. of a mechanical swap, as you said, could. be mechanical and could be done and you. would say it's just a boring. >> boring, right? And it's when one of my. students comes into class and they say,

"What's a swap?" And I'm like, "Oh, do I. have to explain it?" But he you know. corruption story now you have to ask. everything which is okay that Friday. Bessant writes on his pad 5 to10 billion. dollar you think maybe that's is that a. dollar to yen or what's going to happen. but then they go euro which even the. euro didn't realize that was going to. happen and the a broader question is now.

with everything that happens though too. Did insiders know that? Did somebody. know to to short it? Was that 4% take? You and I don't know those answers. But. in this very unusual transaction that. took place, knowing that it's going to. be an unprecedented use of the euro to. achieve a monetary goal by the Treasury, that now creates a dynamic that if. insiders were aware that that was the. plan versus a traditional swap plan, you.

can prepare differently. We don't know. But we know the corruption story is a. story that exists. And you then have to. go Bessant made a lot of his money on. current that that that's his whole. thing. He this is his this is his lane. Who who made money off of this? And. that's a that's a that's a trust issue. that's broken long term. I'll let you. give you the final one. >> Yeah. Look, there's two sets of trust. issues there. There's trust between our. government and the general public. Look, again, as I said, the last 58,000 times.

that they issued a swap line, I didn't. talk about it. I didn't care. I thought. it was probably small, probably. technical, probably uninteresting. So, the trust is broken because every time. we ask hard questions, we keep learning. uncomfortable truths. You know, the. president is is literally selling direct. access to early word of his major policy. decisions when he's selling access to. the truth social API. There's that's a. degree of theft and a degree of. corruption that is literally. unimaginable. This is someone who's to.

be clear what the president's selling in. that case. This is work product in his. job as our employee. As the president, we employ him. We're his boss. What he's. doing is he's taking information about. what the company he works for is going. to do. That company is called the US. government. And he's selling it through. his own company like it's corrupt on its. face. And that colors things everywhere. I think. that's breaking the faith with the US. public, breaking the faith with our. trading partners is something deep. But.

basically what he did, what Bessant did, and I'll leave it to folks at home to. judge how important this is. Um, you. know, when you go to a dinner party, it's good for him to bring a bottle of. wine with you. We've stopped bringing. wine, and sometimes we also fart in the. middle of the dinner party. That might mean we're less likely to be. invited next time. Or the truth is if. the guy you invite is someone you really. need because he's big and has a lot of. money and you'll put up with the farts. at the dinner table, but it doesn't. really help anything. I really think.

that's all that's happened here. But. also, so you might say, "Well, the cost. is small." Well, the flip side is yes, but it's pointless. It's utterly. pointless. Pick up the phone. Stop. farting at the dinner table. Show some. grace. Bring a bottle of wine. >> Yeah. or going to the dinner party, getting drunk, vomiting, punching. people, getting into fights, stealing. their silverware, leaving. >> That's what happened when Ben came over. to my house last time. And that's why. it's not happening again, Ben.

>> Defamation. He forgot. You know, I I. pretend to be an economics guy, but deep. down, you know, I'm an old school. defamation lawyer. So, >> I take it back. Ben never did that. >> Yeah. You you you meet the New York. Times, Sullivan. I may have done it. you. know, it was it wasn't done with. recklessness or malice. Um, appreciate. Justin for everybody. Importantly, search Platypus Economics on YouTube and. make sure you subscribe to Justin. Wolfer's YouTube channel, Platypus. Economics. When you watch his videos,

which do very detailed economic analysis. um, and he does it in of course the. Justin interesting and fun way. Leave a. comment and say Ben says hello. Um, Justin also is the chief economist at. the Midas Touch Network. Very important. Subscribe to his YouTube channel. Let's. get that channel a million subscribers. Thank Justin. Thank you. Before you go, our book WTF America is available for. pre-order now. It's the story of how we. got here and how we fight our way back. To pre-order, scan the QR code or click.

the link in the description. Let's do. this. [music] Heat. Hey, Heat. >> [music].