Virtually no one understands how cheap Yen forms the base layer for the global Ponzi scheme Max Keiser Expands

This post is suggesting that the Japanese Yen plays a critical role in global financial markets, a role that is not widely understood by most people. To break it down:

1. **”Cheap Yen”**: 

This refers to the fact that the Yen has historically had very low interest rates, often close to zero or even negative, due to Japan’s monetary policy. This makes borrowing Yen inexpensive compared to other currencies with higher interest rates.

2. **”Base layer for the global Ponzi scheme”**: 

The term “Ponzi scheme” here is likely being used metaphorically to describe a financial system that relies on continuous borrowing and investment to sustain itself, rather than generating real, sustainable value—like how a literal Ponzi scheme pays early investors with money from new investors. The post implies that cheap Yen borrowing underpins much of the global market’s activity, particularly through something called the “carry trade.”

3. **The Carry Trade Connection**: 

In a carry trade, investors borrow money in a currency with low interest rates (like the Yen) and invest it in assets with higher returns (like stocks, bonds, or other currencies with higher interest rates) elsewhere in the world, such as the U.S. This has been a popular strategy for decades because it can generate profit from the interest rate difference, as long as exchange rates remain stable or favorable.

4. **”Underlying all markets”**

The claim is that this Yen-based borrowing has fueled a massive amount of investment globally, propping up asset prices (e.g., stocks, real estate) across markets. If this mechanism starts to falter—say, if Japan raises interest rates significantly or the Yen strengthens—it could disrupt this flow of cheap money, forcing investors to sell assets to repay loans, potentially triggering a market crash or “global margin call” (a demand to repay borrowed funds).

In essence, the post is arguing that the global financial system depends heavily on this Yen carry trade dynamic, which it portrays as fragile and unsustainable—like a Ponzi scheme that could collapse if the conditions supporting cheap Yen borrowing change. It’s a dramatic way of highlighting a risk that some financial analysts have indeed warned about, though the extent of its impact is debated among experts.“