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Bond markets collapsing into Bitcoin as AI accelerates

PropertyInvesting.net team

For decades the Japanese 10 year Treasury rate was close to zero whilst the US Treasury rates were far higher – at 3-4%. This meant that bankers in Japan, the USA and all around the world made huge profits from the Yen-Dollar carry trade. They arbritarged at zero risk this premium. This meant that there was continuously strong bid for US Treasuries. Japan became the biggest buyer and holder of US Treasury bonds.

Despite an aging and declining population, the Japanese economy still motored forwards because of a strong engineering and manufacturing trade surplus – meaning they could buy US Treasuries. The car manufacturers tried to pivot to hydrogen cars in 2010 though they failed miserably. They built the first electric car – the Prius – an ugly little car that was effective though this was usurped by Tesla and the Chinese EV car manufacturers. The markets have finally got wind of the perilous state of the Japanese economy – declining in power and relevance because of it’s lack of inward migration, aging population, reliance on oil and gas imports and tactical mistakes – that have made it’s aging ICE car manufacturers all but obsolete. It’s only a question of a few years before their car manufacturers go bankrupt - they simply can't compete against the low cost Chinese EVs and higher quality autonomous Teslas. The Japanese debt burden is now at a staggering 235% of it's GDP – the worst in the developed world.

Markets seems to have got wind of this economic disaster about to unfold – and the Japanese Treasury yields have recently skyrocketed – signalling that global markets view of the Japanese Treasuries as far higher risk – they may never be paid back, or if they are, it will be in an inflating currency with declining value. The Israel-Iran war that broke out 13 June and the USA joining on 22 June have hardly helped – since the next threat is the closing of the Straits of Homuz – that would expose Japan massively to higher LNG and oil prices. Japan has been slow to get going with solar/renewables unlike China. There is also very little consistent wind in Japan.

You might ask yourself – what’s this got to do with me? Well the elephant in the room – is that as Japanese yields have skyrocketed = the carry trade has all but ended – meaning the Japanese can't afford to buy US Treasuries any more. Not only China have stopped buying US Treasuries – because of the tariff wars, but now even the most important foreign US Treasury buyer on the planet – Japan – has all but stopped. This is one of the key reasons the US yields are rising so sharply. No-one is turning to the US Treasury auctions. The US tariffs on Japan have hardly helped their cause either – it’s made the Japanese economy more fragile, sent their yields higher, meaning they can’t afford to buy US Treasuries – even before they might not want to because of the tariffs.

But even worse – their economy may not be in such perilous state – largely because of the US tariffs, US-Israel war on Iran and US tariff induced economic slowdown, plus the Chinese-US EV car manufacturers – that they might even be forced to sell their US Treasuries – to pay for their own skyrocketing interest rates on their debts. Of course this would drive the US Treasury yields even higher – and US bond prices lower. This is exactly the opposite to what the USA wants. It will drive up the borrowing costs for all US citizens and businesses along with their government. It could also lead to an economic collapse in Japan. A contagion between the two countries.

It's just another reason why – the only option governments now have with their gigantic debts and unfunded liabilities, is to start money printing. Their interest rates will have to remain high because of the inflation caused, and their currencies will weaken. Japan probably wants a weaker currency to help it’s economy, and so does the USA. And so will China. They will all press the money printing button as their bond markets start to collapse. They will need to print currency to pay for the interest on their own debt. They will have to buy their own debt with printed fiat – which is the end game in a hyper-inflating world.

The global bond market is $140 Trillion with the global Real Estate market $200 Trillion. These are gigantic numbers. The US debt is now $37 Trillion. The Japanese debt is $9 Trillion. The size of Bitcoin is $1.7 Trillion.

We believe there will be a flight to safety and security – away from Japanese and US bonds – indeed all global government bonds – and into Bitcoin. Our prediction is the global bond market will start collapsing into Bitcoin. If only 10% of the bond market collapsed into Bitcoin, then Bitcoin price would rise ten fold easily – to at least $1 million a coin. Rather than people viewing Bitcoin as a “risk on” asset – Bitcoin will be soon be viewed as a “risk off” safe haven asset like gold. Indeed – it is "digital gold". It can't be inflated, it is secure, teleportable, immutable, incorruptible, decentralised, global, private property. Even getting to gold's market value is a 10x.

But it doesn’t stop there. Ever since the Reagan-Thatcher years in the 1980s, the USA and UK have financialised their economies – become financial business services oriented and outsourced their manufacturing and engineering prowess to China. We don't make anything! The fiat currency printing and borrowing at private family, business/corporate and government levels has been extreme. The Chinese were encouraged to buy US and UK Treasuries as part of a deal to supply low cost goods – using ultra-cheap labour – keeping US and UK inflation under control and interest rates at record levels for 40 years until late 2021.

This agreement was smashed by President Trump in March 2025 with his administration's tariff wars. The ultra-rich in the west have prospered from the financialization of their economies with ultra-low interest rates, using debt to asset strip and parking proceeds in real estate. Meanwhile the lower middle class and the poor worker – have been decimated through higher taxes, inflation of food and housing costs – with no options but to pay sky high taxes on everything as a bloated public sector has squeezed the life blood out of the manufacturing sector and the normal hard working self-employed. The public sector have been given zero risk employment with massive final salary scheme pension pots as the bureaucracies have expanded. Engineers and scientists have been drive abroad to seek employment. You get the picture? Very inefficient economies about to collapse.

The tariff wars look so far to have been a massive historical mistake – we doubt the US Treasury Secretary Bissent expected US bond yields to rise sharply after the tariffs were announced and started to be implemented. He's supposed to be a smart man - but this could be his biggest ever miscalculation - a historical one that is difficult to rectify. Even Elon Musk has jumped ship - stating the only way out of the debt mess after the "big beautiful spending bill" is to try and launch AI humanoid robots as fast as possible in a desperate attempt to boost productivity growth post 2025. Thee US Administrations stated aim was to reduce interest rates – not have yields rise by 35% making their own borrowing costs far higher for the US public. The bond markets smell trouble ahead - they seek out the truth.

What we are seeing now is the freezing of hiring by businesses – because of the uncertainty, wars starting, rising oil prices and also advanced in AI. Most executives would think it remis of them to hire at this time – when they may have to lay off so many in the next few years because of AI agents and humanoid robots. People laugh at the suggestion – but the impact of AI is already being felt. New jobs being advertised are collapsing. It’s just that the politicians haven't spoken about it yet – they don’t want to worry the workforce. Unless you are operating robots or AI in the next few years – your job will be at serious risk. Take note. Do not ignore this warning - for the good of yourself and your family. Learn AI tools as fast as possible!

In summary – we are seeing an ever accelerating collision of:

1 Financialise assets collapsing into Bitcoin – like bonds and real estate
2 Borrowing costs likely to rise
3 Inflation likely to rise
4 Energy scarcity increasing as oil prices rise and huge new power requirements are needed to power AI datacentres
5 Money printing will be accelerated with 100% certainty
6 AI and robotics replacing workers at an accelerating and rapid pace
7 Bitcoin and AI merging into a decentralised parallel truth seeking global digital network – that will replace fiat currencies as trust wanes from fiat governments all around the world. This financial shift will be accelerated by stable coin adoption – mainly in the private sector - as US dollar digital currencies (Tether and Circle).

For UK investors – take flight from UK property - now. The party is over. The financialization of UK real estate is complete and is at it’s maxima. Peak property. Property has become a target for the Labour party – with draconian laws/regulations and punitive taxes. Young people on low wages saddled with gigantic ever increasing-inflating student debts will never be able to afford flats and houses. The baby boomers that took all the wealth during this financialised age will spend it on their retirements plans and have it taxed away during inheritance.

Any country heavily reliant on oil and gas imports with high electricity prices are destined to do particularly badly with the Israel-Iran war raging along with Russia and Ukraine - and increasing power requirements needed for AI. The UK ranks about the worst – along with Japan. The UK seems to believe it can power itself on intermittent solar and wind – and has taxed the UK North Sea into oblivion – oil and gas platforms are being abandoned at a record pace whilst we rely on oil and gas imports from the unstable Middle East. You couldn’t make it up. Today it starts getting darker in the UK - it’s going to be a very long winter.

The tech savvy smart young people who are clued up – will turn to Bitcoin to preserve their wealth. Live is wealth. Tax is stealing your time. Smart people will preserve their life and time with Bitcoin. If they get any inheritance, they are far more likely to buy digital assets rather than be burdened with property that is at the bequest of the governments to tax the hell out of. They will also want to stay nimble - with options to move abroad to escape taxes, the erosion of free speech - with the Bitcoin wallets and seed phrases on their iPhone. Ready to depart.

This leads us onto the very top investments for people of all ages – to protect your wealth and your family – to prosper in these uncertain times and hedge against losing your jobs through AI and robotics:

• Tesla ($320)
• Bitcoin ($98,000)
• Strategy (Microstrategy MSTR) ($370)

All three are destined to 10x in the next 5 years.

We hope you have found these insights clear and helpful.

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