The not so quiet whisper on the street floating now that multiple mega hedgefunds who enjoyed the Yen carry trades are either blowing up or just about to blow up.

Without any warning - there's never a warning for these actions - over a weekend, governments and central banks will gather in secret to paper over the mess to "contain" the damage soon enough.

How much pain will force their collective hands to take the action is anyone's guess but it won't surprise me one bit when it comes to pass.

The word on the street is that there are in excess of 21 Trillion USD worth of Yen carry trades that needs to unwound amply evidenced by the Japanese Government bond exploding in yield (or cratering in value, your pick).

21 Trillion USD us just the notional value so who knows how much in ACTUAL value it is floating around once all the leverage with drevitives and CDS are accounted for!

This is no different than all of the countless examples that came before this time - we the human species as a whole never seem to learn the lesson.

Thankfully, an individual person has full autonomy in her own affairs and CAN learn the lesson of remaining humble and consistent while shunning the tempting call of leverage. But I must admit, it's a tough lesson.

At any rate, we might be heading into a supply side driven, at least in the short term, price collapse in assets starting with the most sensitive to the overall available liquidity and risk appetite, of which Crypto and BTC is pretty much second to none followed by large technology in AI and Robotics.

Those who have not meddled with leverage will come out of this stronger than before but anyone who were trying to be cute with leverage and market timing might end up losing everything. Sad yet same old story repeats.

The short term pain is the price one must pay for the long term gain. Yes, it's the exact same lesson for the investment as in the real life in general. No short cuts.

Best of success to everyone!