"I am the house now."
That was the US Treasury Secretary yesterday, daring traders to bet against the yen. In 1992 Scott Bessent was 29 years old and helped George Soros break the Bank of England for $1,000,000,000. He knows exactly what he is saying.
Here is what the house has been doing. The yen fell to 164 per dollar in July, its weakest in nearly four decades. Japan spent the equivalent of $98,600,000,000 in four weeks buying it back, the largest intervention on record, with the US Treasury joining in for the first time since 1998. To pay for it, Japan sold $87,800,000,000 of foreign bonds in August, and Japan's foreign bonds are mostly US Treasuries. Japan is America's largest foreign lender.
So America helped Japan sell America's debt to prop up Japan's money, then doubled its own bond buybacks to undo what that selling did to America's borrowing costs.
Every fiat currency is backed by another fiat promise. The yen by Treasuries, Treasuries by the dollar, the dollar by Japan agreeing to keep holding Treasuries. Pull one and the rest have to move.
The house always wins because the house writes the rules and can rewrite them mid-hand. Until the day everyone at the table notices the emperor has no clothes.
Bitcoin is the one table with no house. The rules are the rules, and nobody, not even a Treasury Secretary, sits on the other side of them.
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Banco
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