5 Consecutive Gains Assets with 5 consecutive gains recently: Gold, Bitcoin, Crude Oil. Assets with 5 consecutive losses recently: Nasdaq. Behind this is the 10-year US Treasury yield returning to 4.26%. Bassett's market rescue had a completely opposite effect; the market believes the government has lost control over long-term bonds, exposing a weakness equivalent to losing credibility. Therefore, the Fed Chair requested Bassett and the Director of the Budget Office to redo the fiscal plan and cut spending, but the market chooses not to believe it. Last year's failure of Musk's DOGE plan is still fresh in memory; the US fiscal problem is rotten to the core. Moreover, Broadcom is about to issue 60 billion in AI bonds, combined with recent poor financial data from OpenAI and Anthropic, the Nasdaq is expected to continue downward, first targeting 25,000. The A-share market is shrinking and oscillating, nothing special to say. The 3850 buying point hasn't been reached and won't move, just keep holding on. Gold continues upward to 4650, very stable, continue holding positions. Bitcoin, after breaking through 78,000, is now pulling back, but it looks like it can break through. Gold and Bitcoin will continue to benefit from the US Treasury issues. This turning point will be at the September Fed meeting; if the Fed raises interest rates, gold and Bitcoin will face substantial downside. That's all, have a nice weekend. The above is only personal opinion, not investment advice, please be aware of risks.

Government bond issues resurface Yesterday, I just commented that Besant's repurchase efforts were insufficient, and today the US Treasury yield has risen again, approaching around 4.6%. This is the consequence of government intervention, which causes the market to suffer greater backlash, turning short-term problems into long-term structural issues. Fortunately, most global macro hedge funds are based on Wall Street, so hopefully they won't be so ruthless as to short their own country, hopefully... Tonight, the US stock, currency, and bond markets are all under pressure. The Nasdaq's support at 26,000 is precarious. I mentioned yesterday that the decline in this crisis might be around 10%, which is near 24,400 by the end of July. Of course, it might not reach that level, but having this psychological expectation will prevent being scared by price pullbacks. At the same time, there is no need to rush to bottom-fish now; from both time and space perspectives, it's not yet the moment. The situation needs to develop further, with the speech by Walsh on the 28th being a key point. Gold continues to remain strong. Now Wall Street collectively starts to turn bullish. Citibank's research report indicates a baseline scenario of $5,000, optimistically up to $6,000. I think reaching $5,000 would already be good, and I will take profits. Last night, Moderna in the US announced the success of the phase 3 trial of the immunotherapy drug Keytruda, significantly reducing cancer recurrence rates. This is good news for humanity. Today, the A-share innovative drug sector surged. I have previously emphasized that innovative drugs are a short-term strong sector with sustained heat, so continue holding. Meanwhile, the tech sector's momentum has been drained, coupled with bond-related negatives for AI infrastructure, leading to recent pullbacks. Slightly reducing positions or continuing to hold steadily is fine. This round of bond turmoil is expected to end in September. Bitcoin performed brilliantly yesterday, driven by the crypto industry executives summoned by the Trump supporter and another call to buy. I think this is also a short-term move. The bigger support factor, like gold, comes from the US Treasury issue. Whether Bitcoin can break through 70,000 and subsequently surpass the bull-bear dividing line at 78,000 depends on whether the Clarity Act passes in September. I continue to emphasize position sizing and risk control. Now gold can account for 10% of a long-term portfolio, and gold ETFs are more suitable for beginners. Silver, due to its weaker financial attributes compared to gold, will only follow gold's rise later, so patience is required. The above is only my personal opinion and does not constitute investment advice. Please be aware of the risks.

When will this US debt storm be out of danger? Keep an eye on this number The alarm bell has rung. Recently, the yield on the US 10-year Treasury has remained above 4.7, which is a very serious signal, sounding the alarm for global asset pricing. According to economic principles, the long-term US Treasury yield is linked to long-term inflation expectations. If inflation comes down, Treasury yields should decrease. But we see that since the Federal Reserve's July meeting, the US 10-year Treasury yield has been uncontrollable, continuously breaking through 4.5, 4.6, and 4.7. Why is this happening? This involves what investors are currently worried about—not actually long-term US inflation, but that the long-end yield reflects term premium. What is term premium? Taking the 10-year Treasury yield as an example, it means that if I buy this bond and hold it for ten years, various risks will occur over the next ten years. The higher the uncertainty, the cheaper I will demand the bond to be sold to me. What uncertainties is the US facing? First, the new Fed Chair, Waller, has lost credibility with the market. At the July meeting, Waller verbally signaled rate hikes, although he vocally opposed inflation, in fact, he did not take any rate hike action and even mockingly said the Treasury market was hiking rates for him. This basically angered Treasury investors, who voted with their feet by selling off long-term Treasuries. Additionally, Waller introduced a so-called "no forward guidance, no signaling" communication mechanism. Under this situation, investors have to blindly guess whether the Fed will be dovish or hawkish on new economic data. This has caused the bond market, dominated by cautious institutional investors, to be insensitive to good news and more pessimistic about bad news. No matter how favorable the nonfarm payroll and inflation data are, bond investors believe that since the Fed does not provide forward guidance, it likely does not care much about short-term data. We see a very split reaction after data releases—US stocks surge, even gold rises, but only Treasuries fall. This reflects the increasingly worsening US fiscal situation. The total US debt has exceeded 40 trillion, and the fiscal deficit has surpassed 2 trillion. How will these holes be filled? The market does not want to answer this for Treasury Secretary Yellen. The market uses term premium to represent investors’ true feelings, which translates to: I don’t know if the US fiscal situation will improve in the future or if Fed Chair Waller’s words are reliable. I only know that I want more interest today to buy more Treasuries. Worse than the 10-year Treasury is the longer 30-year Treasury, whose yield has reached 5.27, significantly surpassing the historically important 5% threshold. Historically, whenever Treasury yields break 5%, investors could buy with eyes closed. But this time, the yield has broken above 5% to 5.27 and shows no signs of stopping. Investors no longer believe US Treasuries will return to a bull market in the short term. In the recent public statement on US Treasury financing, Yellen changed the wording from "potential future increase in issuance" to "potential future no increase," which can be seen as a small reassurance to the market. What was the effect? It had a slight effect; the 10-year Treasury yield only fell from 4.27 back to about 4.65, while the 30-year Treasury yield remains firmly above 5.2%. What impact will this have on ordinary investors? The most important is the link between global carry trades and US Treasuries mentioned earlier. If Treasury yields remain high, it will drive up global bond markets including Japanese, European, and UK government bonds. The rise in bonds will cause another problem—the financing difficulties for US AI corporate bonds, which may cause the current cycle of financing, investment, and stock price increases in AI stocks to collapse, thereby transmitting financial liquidity crises from the bond market to US stocks. The tech sectors of US stocks and our A-shares are fully linked, so this will spread from US stocks to A-shares, affecting everyone’s accounts. Therefore, I suggest everyone closely watch the US 10-year Treasury yield. Only when the 10-year Treasury yield can return below 4.6 or even 4.5 will it represent a release of short-term financial risks, allowing everyone to expect the bull market to go higher and further. The above is only a personal opinion and does not represent investment advice. Please be aware of risks.

U.S. Treasury Increases Buybacks Tonight, the U.S. Treasury announced an increase in the limit for each long-term bond buyback by $4 billion. After a plunge, U.S. Treasury yields stabilized, gold rose above $4500, and U.S. stocks opened lower but climbed higher. First, this move is symbolic, indicating that the U.S. Treasury recognizes the severity of the problem and is starting to take action to address it. Second, the scale of this buyback is not large—an increase of $4 billion each time, with four buybacks per month, totaling an additional $16 billion, which exactly offsets the Federal Reserve's cessation of RMP buybacks, resulting in no net increase or decrease. Third, the buyback funds are still raised by issuing short-term debt, which does not solve the long-term problem and even further exposes the current predicament where the U.S. can only rob Peter to pay Paul, similar to the situation with the yen. Fourth, the root of the problem lies in a series of disruptive actions by Walsh and Bassett, which have lost market trust. To solve the problem, trust must be rebuilt. The conclusion remains the same as before: gold benefits doubly. Today's breakthrough above the 200-day moving average at 4500 is very critical. After breaking through, it rose directly to 4550. The outlook remains optimistic. If there is a pullback, it is important to watch for stable opportunities. Supported by optimistic sentiment in U.S. stocks, a quick recovery also occurred, but caution is advised as the situation may still develop, especially with the upcoming minutes of the monetary policy meeting tonight, the Jackson Hole meeting on August 28, and the Bank of Japan's rate hike in September. If the market continues to decline significantly, that will be a time to pay attention (AI fundamentals change). The logic for Bitcoin follows gold but is weaker; it remains to be seen if it can break through the 65,000-70,000 range. For A-shares below 3900, there is no need to be pessimistic; below 3850, opportunities outweigh risks. The situation improved somewhat today, but many uncertainties remain. Overall, the liquidity crisis is a gold-digging pit. If high-quality assets in U.S. stocks, A-shares, and gold can fall further, providing more opportunities to enter, that would be better. Position control is very important now; around seven layers is suitable for entering and exiting. If risks arise, there are bullets to add, and rebounds can also be captured. This approach is more appropriate. The above is only a personal opinion and does not constitute investment advice. Please be aware of risks.

The sudden appreciation of the yen triggered a global market plunge A sudden plunge occurred after 1 PM today, with global markets experiencing a wave of declines, including A-shares, Asian stock markets in Japan and South Korea, as well as gold. The reason behind this was surprisingly the yen. At exactly 1 PM, the yen suddenly appreciated slightly, with the exchange rate against the US dollar rising from 159.5 to around 159.3. The cause was media reports revealing that Japan's Prime Minister Sanae Takaichi's government made a 180-degree turn, changing its stance from opposing the Bank of Japan's rate hikes to supporting an imminent rate hike. It is very likely that at the upcoming monetary policy meetings in September or October, the Bank of Japan will implement its third rate hike in 12 years, potentially raising the rate from 1% to 1.25%. This would be the fastest consecutive rate hike by the Bank of Japan in decades. Since the beginning of this year, the yen has depreciated rapidly, falling from just above 150 to over 160. The Bank of Japan intervened twice this year, using about $66.7 billion in April with limited effect. In July, it intervened again, deploying around $58 billion to support the yen. Interestingly, the US government also joined forces; US Treasury Secretary Janet Yellen not only sent a note to the market indicating plans to buy about $5-10 billion worth of yen in the future, but the Federal Reserve also conducted window guidance on exchange rates, sending a warning signal to the market to curb the rampant shorting of the yen. However, the market did not respond favorably to these consecutive moves. After the US-Japan joint intervention on July 30, the yen briefly rose to around 157, but within about a week, it returned to 159.5 and continued heading toward the 160 mark. Behind the yen shorting is a massive global carry trade fund totaling about $2 trillion. Why does the market feel so confident to continue shorting despite US-Japan intervention? The deeper reason is the recognition of Japan's huge short-term economic difficulties—Japan's debt is enormous, with debt-to-GDP ratio exceeding 204%, the highest among all developed countries. Japan's economic structural transformation lags far behind its East Asian neighbors, and its economy has been sluggish. Meanwhile, with global oil prices soaring this year, imported inflation has caused great hardship for the Japanese people. Logically, the Bank of Japan should raise rates to combat inflation, but Prime Minister Sanae Takaichi's government fears that rate hikes will stall the economy and increase interest expenses, worsening the already strained fiscal situation. Therefore, they have firmly resisted rate hikes and only used foreign exchange interventions to support the market. This indirectly drags the US into a trap—when the Bank of Japan supports the yen, it must sell dollars to buy yen, and with limited foreign reserves, the Bank of Japan must sell US Treasuries to obtain dollars, creating huge selling pressure in the US Treasury market. The persistently high US Treasury yields are the top headache for the current Trump administration, which cannot tolerate Japan adding fuel to the fire at this time. Trump repeatedly accused Japan of undervaluing its currency and demanded a higher exchange rate. Treasury Secretary Yellen also visited Japan multiple times urging rate hikes. Under huge US political pressure and after two failed interventions with real money this year, today's news indicates that Sanae Takaichi has finally had to concede. The current global capital market situation is that the triangle of US dollar/US Treasuries, yen/Japanese bonds, and corporate bonds issued by large US AI companies cannot all be balanced simultaneously by global funds. The ultimate result is sacrificing the yen and Japanese bonds to preserve US Treasuries and the smooth issuance of AI company corporate bonds. Sanae Takaichi has effectively allowed Japan to raise rates, meaning Japan will bear the fiscal costs of higher interest, sacrificing fiscal credibility and causing Japanese bonds to be further abandoned by the market. Global capital leaders have already warned that Japanese government bonds are approaching a "Truss moment"—referring to the time when UK Prime Minister Truss's fiscal stimulus via tax cuts triggered investor concerns, massive bond sell-offs, and the resignation of the Chancellor of the Exchequer. Today's government concession and the Bank of Japan's upcoming rate hikes mean Japanese bonds will ultimately bear the burden. The global bond market will become more volatile and liquidity competition more intense, which is not good news for global stock markets—whether high-risk US stocks or gold, liquidity is needed to sustain bull markets. The precarious bond market sounds a warning bell for global assets. After today's news, the yen rose slightly and then stabilized, indicating investors are gradually digesting the negative news of the Bank of Japan's rate hikes in September and October. Once market pricing is complete, this round of turmoil will temporarily subside. The key is whether the yen can stabilize below 160. If it cannot hold this critical level, the Bank of Japan will continue selling US Treasuries, and in the worst case, the Federal Reserve may intervene through FIMA US Treasury repurchases to support Japan, effectively signaling a new round of global monetary easing. The above is personal opinion and does not constitute investment advice. Please be aware of risks.

Continuing to follow the script Tonight, the US July CPI fully met expectations, withstanding the risk of oil price rebound due to the Middle East conflict in July, continuing its downward trend, removing the biggest tail risk for the market. The probability of a rate hike in September dropped from 46% to 40%. The market is gradually realizing that there will be no rate hike this year, but possibly a rate cut, which is the script I have been telling everyone: the Fed first signals hawkishness to mislead the market — the market becomes desperate — then data reverses — market perception changes — the Fed cuts rates. This process means the market first falls, then gradually rises. Once you catch the rhythm, holding positions steadily feels very comfortable. Tonight, gold failed to break through $4500. No need to worry; it’s normal to have differing resistance levels. After some more oscillation and sufficient chip exchange, the breakout will be stronger. From a fundamental perspective, US economic data is very likely to continue weakening. Meanwhile, Trump’s pressure on Cook and the US debt issuance issues (Bassett had to intervene) continue to weigh on US credit, which is bullish for gold. After gold breaks through, it will be silver’s turn. Since silver has lower financial attributes than gold and is a follower asset, appropriately positioning in it is also a viable strategy. Today, Penguin announced its financial report, with capital expenditures far exceeding expectations, especially the outstanding performance of WorkBuddy, indicating successful AI implementation. Although negative cash flow turnover is a short-term issue and the stock price fell tonight, in the long term, it supports the domestic mid-to-lower stream AI narrative, which is good for the entire domestic AI main theme. The central bank announced tonight that it will conduct three 600 billion yuan reverse repo operations in the coming week. This liquidity injection offsets market tightness and is good news for the A-share market, especially for liquidity-sensitive stocks like small and mid caps, which can be watched in the short term. Bitcoin enters an August news vacuum period; time is exchanged for space. New market moves will wait until the bill is reconsidered in September. Currently, a drop is actually an opportunity to accumulate low-priced chips, while a rise is just dead time. The above is only personal opinion and does not constitute investment advice. Please be aware of risks.

Key CPI Data Will Decide the Fate of the Rebound At 8:30 tonight, the US July CPI will be released. This could be the most important inflation data of the year because it will directly determine whether the current rebound continues or shifts into a consolidation phase. Looking back to August last year, at the same critical point—the US economy began to weaken gradually, nonfarm payroll data was unexpectedly revised downward, and Trump relentlessly pressured the Federal Reserve. The market seriously questioned the Fed's credibility. The subsequent scenario was the Fed's emergency rate cuts in September, three consecutive cuts, leading to a major market rally. This year is almost the same script. US economic indicators unexpectedly turned negative, July's large nonfarm payrolls shifted from positive to negative, Trump started investigating criminal issues related to Fed Governor Cook, and the just-concluded July Fed meeting was widely seen by the market as a complete failure. Walsh's speech caused US Treasury yields to surge sharply, with the 10-year Treasury yield hovering around 4.7%. The US urgently needs to cut rates to suppress long-term interest rates; the script is strikingly similar. I predicted at the beginning of the year that the US should cut rates in September. If it weren't for the mid-March Middle East conflict causing oil prices to spike, rate cut expectations would have already started trading. Currently, the market is deeply divided on whether rates will rise or fall. Tonight's CPI data is very likely to be the key to reversing everyone's expectations. This CPI release mainly focuses on three variables: first, whether the July rebound in oil prices will transmit into the CPI data; second, whether the overall weakening of the US economy will cause a significant drop in commodity CPI; third, whether housing inflation, which carries the largest weight in inflation, will continue to decline as expected. The market consensus currently expects July CPI to rise 0.1% month-over-month, and core CPI to rise 0.2% month-over-month. I believe the overall month-over-month figure may be lower than expected, with other items roughly stable. If the data is lower than expected, the market will continue to rebound; if higher, the market may continue to consolidate for a while. The outcome will naturally be clear once the data is released. The above is only a personal opinion and does not constitute investment advice. Please be aware of the risks.

Structural Opportunities in the A-Share Technology Sector If we talk about the upcoming phase's structural highlights in A-shares, the first layer is to focus closely on AI technology. Within AI technology, it's fine to focus on the leading companies, but to stay one step ahead of the market and outperform most retail investors, you need to ask what exactly this leader represents. The next layer down is to select domestic computing power leaders and domestic substitution leaders. Domestic computing power includes the upstream chip design and semiconductor equipment manufacturing, both of which are tightly controlled by foreign entities, highly valuable, and should be the core leaders to watch in the future. The most representative of course is Huawei; the entire industry chain led by Huawei is the core direction of the domestic computing power sector. Another line is the overseas computing power chain led by the U.S., such as optical modules, which have proven performance and are long-term leaders worth watching. But the problem is their volatility follows the U.S. stock market and is heavily influenced by overseas tech stocks. Apart from these two, everything else seems miscellaneous to me. For example, market speculation on glass substrates, MLCCs, etc., is global and not unique to China; also, these are lower-end in the industry chain, unlike optical modules which have technological content and overseas demand. Even robots and commercial aerospace—commercial aerospace is at too early a stage and not exactly the same, but many similar directions, even if leaders, I believe lack long-term value. Returning to this round of AI technology investment, it may now be necessary to layout mid- to downstream sectors. Overseas AI has entered a rotation from upstream to mid- and downstream; optical modules may be entering a relative bottleneck. If optical modules rotate down, does the new overseas rotation direction have a domestic counterpart or industry chain support? Currently, mid- to downstream can look for large model companies and cloud computing companies—mainly in Hong Kong stocks, with growth not as fast as in the U.S. But Chinese large model companies will follow the U.S. in the next short-term rotation or hype cycle. Following the overseas chain requires the ability to time trades, constantly grasp overseas tech trends, and pocket profits from domestic companies in phases, being good at taking profits. Domestic computing power, however, can be a long-term play. Both directions are viable; the key is to recognize your own trading style and match the corresponding strategy. This is the direction where ordinary A-share investors can truly seize opportunities and make money. The above is only a personal opinion, not investment advice; please be aware of risks.

To put it bluntly, the rules have always been set by the United States for others. If other countries' exchange rates have loopholes, they deserve to be harvested by American capital. Recently, the much-discussed Plaza Accord 2.0 between Japan and the US involves joint intervention in exchange rates. The real mastermind behind this is US Treasury Secretary Janet Yellen—one of the architects of the dollar system, former Chief Investment Officer of Soros Fund, who orchestrated the attacks on the British pound and the Asian financial crisis. From Yellen's rise, we can clearly see what she is doing now. In the 1992 pound attack, Yellen observed problems in the European Exchange Rate Mechanism. The UK economy was weak but stubbornly maintained high interest rates; she believed the Bank of England could only choose between exchange rates and real estate. Soros agreed with her judgment, borrowed money and leveraged to short the pound. On Black Wednesday, the UK raised interest rates twice in one day to 15%, exhausted $26.9 billion in foreign reserves, yet still couldn't stop the attack, eventually exiting the ERM, with the pound plummeting 4% in a single day. Soros became famous overnight, profiting over a billion dollars. Yellen later accurately bet on the yen's depreciation and attacked the Thai baht and other currencies during the Asian financial crisis, profiting handsomely each time. The wheel of fortune turns. The Wall Street titan who once dominated the scene has now become the firefighter defending against capital attacks, in a more awkward position than the countries once targeted. US federal debt has surpassed $40 trillion, and the 30-year Treasury yield has exceeded 5%, the highest since 2007. Yellen not only has to keep borrowing new debt to pay off old debt but also suppress borrowing costs to convince the market that the dollar is credible. Neither of these conditions currently holds. US credit has been ruined by Federal Reserve Chair Jerome Powell. Powell told the bond market at a meeting, "Welcome the market to raise rates on behalf of the Fed," enraging Wall Street tycoons who frantically sold off Treasuries. Within an hour after the meeting, the 10-year Treasury yield broke 4.7%. Powell caused the mess, and Yellen can only clean up afterward. That's why Yellen is urgently trying to help Japan put out the fire—because even insiders no longer trust US debt, overseas central banks are selling off, and a global de-dollarization wave is rolling in. The Bank of Japan is the most important big buyer and must be stabilized. The yen's depreciation forces the Bank of Japan to keep selling Treasuries to support the yen, robbing Peter to pay Paul. Yellen first verbally pressured, then personally flew to Japan to guide, but the Bank of Japan still refused to raise rates. Finally, Yellen compromised and intervened through the Fed's exchange rate window guidance, violating market rules to stabilize the situation. The most ironic thing is the double standard of financial rules. When shorting the pound, the Western rhetoric was "free market pricing correcting economic imbalances," completely ignoring the cost of local asset crashes, corporate bankruptcies, and wealth shrinkage after currency collapse. When US debt is under pressure, the narrative changes—malicious shorting becomes market sabotage, and defending US debt and the dollar is deemed in the global interest. The rules have always been set by the US for others. If other countries have loopholes, they deserve to be harvested; if the US itself has problems, the whole world must bail it out. Yellen has transformed from a dragon slayer into a dragon herself; what changed is her role, not the underlying logic. Back then, the attacks targeted loopholes left by other countries' policy mistakes; now, the dollar's debt hole is precisely the result of decades of US fiscal profligacy and excessive money printing. The harmful effects of the exchange rate mechanism once taught to the world have now all backfired on the US. This is probably the most vivid cycle. The above is only a personal opinion, not investment advice; please be aware of risks.

The Federal Reserve also struggles to save the market Big news: after 24 years, Japan and the U.S. have once again joined forces to intervene in the exchange rate, with an impact potentially comparable to the Plaza Accord back then. This year, the yen has plummeted as if it took a laxative, breaking through 150, and now surpassing the 160 mark, even dropping to 162 at one point in July. The Bank of Japan has repeatedly stepped in to support the market, but global funds shorting the yen are completely unmoved. The entire $2 trillion carry trade not only disrespects the intervention but continuously turns the Bank of Japan’s injected funds into closing profits. The one who can’t sit still is U.S. Treasury Secretary Janet Yellen. This week, the Bank of Japan took the lead, spending $52.8 billion on foreign exchange intervention. What surprised the market even more was Yellen accidentally leaking a hotel note that read "Buy 10 billion yen"—clearly not a slip, but a deliberate signal to the market. Shortly after, the New York Federal Reserve intervened in the forex market, conducting a rate window check and asking major Wall Street forex quoting banks for quotes on "selling 50 billion euros to buy yen." The news quickly spread across the forex market; traders knew the Fed was ready to step in. The yen surged rapidly, short sellers scrambled to cover, dropping from 162 back to 157. This operation is quite poignant. Back then, Yellen represented Soros Fund to break the Bank of England, sitting at the table as a financial hunter suppressing the pound; now she sits on the other side of the table as U.S. Treasury Secretary, personally defending the forex front line—a poetic turn of fate. This action completely contradicts the U.S.'s long-standing principle of market-led exchange rates. Intervening with state power indicates a major underlying risk. There are two layers of risk. The first is that stabilizing the yen is actually about stabilizing U.S. Treasury bonds. The Bank of Japan has been continuously selling U.S. Treasuries to raise dollars to support the exchange rate, about $30 to $50 billion each time. If this scale continues, it will not only push U.S. Treasury yields up and prices down but also desensitize the market—market participants know your ammunition is limited and you have to pause after each shot, allowing shorts to keep eating your chips. Losing Japan as the largest overseas buyer of U.S. Treasuries, while AI companies are issuing hundreds of billions in private bonds annually, means the global capital pool is a small well being drained by two big hands. If U.S. Treasury yields can’t be maintained, U.S. financial market liquidity may collapse, even threatening the stability of U.S. stocks. The second risk affects the U.S. real economy. If U.S. Treasury yields keep rising, the recent AI-driven stock decline has already served as a warning—liquidity and AI narrative are causing a double squeeze. If the Japanese carry trade reverses and $2 trillion of global funds simultaneously withdraw from the U.S., combined with midterm election disruptions, U.S. stocks could spiral downward. At that point, AI companies won’t be able to finance, and the much-anticipated AI industrial revolution in the U.S. may fail again. As the U.S. Treasury Secretary and the last defender of the financial system, Yellen has to sacrifice her own credibility to intervene—transforming from the dragon slayer of the past into the very dragon she once fought. This round of intervention has just begun; the yen has just stabilized below 160. The next risk point is whether the yen can break above 150. If it does, the entire carry trade capital could avalanche out in a stampede, triggering a financial tsunami in global markets. Whether this turns into a black swan event depends on Yellen’s next moves. The above is only personal opinion and does not constitute investment advice. Please be aware of the risks.