BitMEX’s exchange founder and a leading figure in the cryptocurrency market, Arthur Hayes, suggested that Democrats might secretly print US dollars to boost the stock markets before the Presidential elections. According to Hayes’ published article, Kamala Harris’ presidential campaign could gain significant momentum if the markets are in an upward trend.
Japanese Yen’s Rise Triggered a Collapse
Last week, the unwinding of the Japanese yen carry trade led to a $6.4 trillion global market crash, and the S&P 500 index saw its worst trading day since 2022. In Japan, many investors borrowed cheaply with low-interest Japanese yen and invested these funds in high-growth potential risky assets, especially stocks, with the expectation of profit.
However, with the Bank of Japan raising interest rates at the end of last month, the yen appreciated, forcing investors to sell risky assets, buy yen, and repay their debts.
The increased demand for the yen further raised its value, leading more investors to liquidate their positions. As the appreciating yen threatened their profits, panicked investors sold more assets.
“Harris Can Stop the Market Crash”
Hayes suggested that Harris could stop the market decline and instruct Treasury Secretary Janet Yellen to initiate a secret operation to lend US dollars to the Bank of Japan with yen collateral to save Japanese investors. According to Hayes, this operation would allow the Bank of Japan to keep the yen’s value under control by borrowing US dollars and printing more money.
Hayes believes such an operation would lead to rises in the US stock and bond markets with newly printed US dollars, giving Harris a more advantageous position in the elections. Hayes also added that Japanese banks could provide unlimited yen-denominated loans with newly found Japanese Government Bond (JGB) collateral. Such a trade could revive markets in both the US and Japan, which could unsurprisingly lead to upward movements in the cryptocurrency market.
