Cj Miller

🇺🇸 FED IS SIGNALING YEN INTERVENTION AGAIN JUST LIKE 1985. LAST TIME, THIS CRASHED THE DOLLAR BY NEARLY -50%. In 1985, the U.S. dollar had become too strong. U.S. factories were losing business, exports were collapsing, and trade deficits were exploding. Congress was close to putting heavy tariffs on Japan and Europe. So the U.S., Japan, Germany, France, and the U.K. met in New York at the Plaza Hotel and made a deal. They agreed to deliberately weaken the dollar. By directly selling dollars and buying other currencies together. That was the Plaza Accord and it worked. Over the next 3 years: - The dollar index fell almost 50%. - USD/JPY moved from 260 to 120. - The yen doubled in value. This was one of the biggest currency resets in modern history. Because when governments coordinate in FX, markets don’t fight them. They follow. That decision changed everything. A weaker dollar pushed: - Gold higher - Commodities higher - Non-U.S. markets higher - Asset prices higher in dollar terms Now look at today. The U.S. still runs large trade deficits. Currency imbalances are at the highest. Japan is again at the center of stress. And the yen is again extremely weak. That is why Plaza Accord 2.0 is even being discussed. Last week, the NY Fed did rate checks on USD/JPY, which is the exact step taken before FX intervention. It signals willingness to sell dollars and buy yen, just like 1985. No intervention happened yet. But markets moved anyway. Because they remember what Plaza means. If that starts again, every asset priced in dollars will skyrocket.

US fund inflows are skyrocketing: US equity ETFs have attracted a record +$400 billion over the last 3 months. Inflows have doubled since August 2025 and now exceed the April 2021 high by +$177 billion. January inflows into these funds are now running at 5 TIMES the average rate. Meanwhile, leveraged-long ETFs now hold $145 billion in assets, an all-time high, while funds betting on market declines own just $12 billion. As a result, bullish leveraged bets now outweigh bearish ones by 12 to 1, the highest on record. Risk appetite is through the roof.