Welcome to another Fat Pipe. It’s Monday, Jan 12th, 2026. Instead of dropping fattie Fat Pipes on Monday and Friday, I am considering doing a daily Fat Pipe, but each one constrained to a single issue. Thoughts? My thinking is that this may lead to more focused conversations about a given topic.
Behold, Precious Metals!
This is what I woke up to this morning (screenshot taken at 8:25 am ET):
Good grief! What is this telling us? I think it means that big money is now worried about counterparty risk. As in, “What if my bank fails?” and even, “What if Japan defaults?”
So, both institutional and even sovereign risk.
As I’ve gone into before, Japan is in a very tight spot. On the one hand, the Japanese government is spending at record deficit levels (which should drive the yen down) and on the other hand, the Bank of Japan is allowing their bond yields to explode higher, which should support the yen and strengthen it.
That’s not happening…the yen is sinking anyway. At some point, this becomes a true national emergency.
And, I have to confess, it doesn’t seem like the BoJ has this under control at the moment:
🚨This is INSANE:The chart presents the rising cost of debt for Japanese 30-year government bonds.Put simply, investors are demanding more compensation for lending money to one of the world's largest economies.This comes as the debt situation in Japan and across the world… pic.twitter.com/sV3r7k0bZG
— Global Markets Investor (@GlobalMktObserv) January 7, 2026
As a reminder, spiking bond yields are usually ignored by equity markets until they suddenly aren’t:
Japan's 2-year bond yield has surpassed levels last seen during the 2007-08 crisis. pic.twitter.com/chhsbBz9Vx
— Koyfin (@KoyfinCharts) January 10, 2026
If you are in Japan, you are probably seeking ways to get out of being exposed to a yen that could violently debase at any moment.
by edmontonsnowman 
