Japan Dumps Treasuries as Debt Crisis Explodes -- Gareth Soloway

Concepts & Ideas

Core Framework -- Debt Cycle & Precious Metals as a Long-Term Store

The Structural Debt Trap

When a government's debt load becomes large enough that it can no longer realistically be repaid, the cost of servicing that debt crowds out spending on everything else. At $1.2 trillion per year in US interest alone, the system is already past the point where tax increases or budget cuts can meaningfully close the gap. The endpoint, in Soloway's view, is a forced financial reset.

Gold as a Long-Term Safe Haven vs. a Short-Term Risk Asset

Historically, gold moves independently of equities. When gold starts correlating with risk assets -- selling off when stocks sell off -- it signals that speculative momentum traders have entered the position. These traders eventually need to exit, which creates a corrective flush before the fundamentally-driven trend reasserts itself.

The Fibonacci Retracement as a Normalizing Tool

After a large move, markets commonly retrace to the 50% or 61.8% Fibonacci level before resuming the trend. A pullback from $5,500 gold to $3,500 is a 50-to-61.8% retracement from the 2022 base at $1,600 -- large in dollar terms but structurally normal. Soloway uses this framework to distinguish healthy corrections from trend reversals.

The Bear Flag Pattern

A bear flag forms when a sharp downward move is followed by a tight, sideways-to-slightly-upward consolidation. When price breaks below the consolidation, it triggers a second leg down roughly equal in size to the initial drop. Soloway identifies this pattern on Bitcoin's chart and warns it applies to gold and silver as well if broader risk appetite deteriorates.

Practical Principles -- Positioning Under Uncertainty

Staged Allocation at Pre-Set Price Levels

Rather than waiting for certainty and deploying cash all at once, Soloway maps out specific price targets in advance and allocates in fixed tranches -- for example, 10% at one level, another 10% if it drops further. This turns uncertainty into a decision tree rather than a source of paralysis.

Patience Over Chasing

Soloway's recurring point is that investors who chase momentum at the top of a parabolic move almost always lose. There is always another trade. The discipline is to let a move complete, let the flush happen, and enter at a level supported by the chart rather than by narrative excitement.

Bonds as a Near-Term Equity Hedge

Even in an environment of rising yields and long-term skepticism about sovereign debt, Soloway still sees near-term utility in bonds as protection against equity market declines. This is a tactical position -- not a structural endorsement of government debt as a long-term holding.

Macro Frameworks Referenced

The Hundred-Year Cycle from the Great Depression

Soloway's 2029 to 2030 crisis window is anchored to a generational debt-and-deflation cycle that peaks roughly a century after the 1930s. This is a long-wave framework -- similar in spirit to the Kondratiev wave -- that treats current debt conditions as historically rhyming rather than unprecedented.

Japan as a Leading Indicator

Japan carries one of the highest debt-to-GDP ratios in the world and has been suppressing bond yields through yield curve control for years. As that suppression loses credibility, yields rise and investors demand more compensation to hold Japanese government bonds. Soloway and his network treat Japan's yield crisis as an early signal of what sovereign debt stress looks like when central banks begin to lose control of the narrative.

Consumer Bifurcation

The top 10% of earners -- those with significant stock market wealth -- have been largely shielded from inflation because rising asset prices offset rising costs. The bottom 90% have experienced inflation as a direct reduction in real purchasing power, with no offsetting wealth effect. This bifurcation creates the appearance of a resilient consumer in aggregate data while masking significant distress at the median and below.

Narrative-Driven Price Surges and Their Aftermath

Silver's run above $100 was fueled by a cluster of reinforcing narratives: supply shortages, contract delivery failures, China cutting supply. When those narratives lose freshness, the speculative premium collapses and price seeks a technical base. Soloway warns that this pattern -- narrative in, momentum in, then flush -- repeats across asset classes and is predictable in structure even when the specific narrative varies.

Implementation Steps

Implementation steps are auto-generated from the transcript content and are provided for informational purposes only. They do not constitute professional advice of any kind. Always consult a qualified professional before acting on any information presented here.

Separate your time horizons before you act

Soloway is simultaneously short-term bearish and long-term bullish on the same assets. Before making any move, decide whether you are deploying capital for a 90-day window or a multi-year window. These require different entry logic and different emotional frameworks. Conflating them is how investors buy tops while intending to be long-term holders.

Build a price-level decision tree before the market opens

Identify two or three specific price levels on the assets you want to own -- gold below $4,000, silver at $76 and again at $64, platinum in the $1,600 to $1,700 range. Assign a fixed allocation percentage to each level. When price reaches the target, you execute according to the plan. When it does not, you wait. This removes in-the-moment decision-making under emotional pressure.

Apply Fibonacci retracement levels to assess correction depth

For any asset that has made a large directional move, draw Fibonacci retracement levels from the base of the move to the high. A 50% to 61.8% retracement is historically normal and does not invalidate the underlying trend. Knowing this in advance prevents panic selling at support and helps you recognize when a correction is technically complete vs. when a trend has actually reversed.

Learn to identify bear flag patterns on a daily chart

A sharp down move followed by a tight consolidation that drifts slightly upward is a bear flag. If price breaks below the lower boundary of that consolidation, the pattern triggers and the next measured move is typically equal to the initial down leg. Soloway sees this on Bitcoin currently. Knowing the pattern tells you where not to be, even if you are structurally bullish on the asset over a longer period.

Watch the Japan yield story as a systemic stress indicator

Japan's government bond market is one of the largest in the world, and its yield curve has been artificially suppressed for years. As yields rise -- driven by investors demanding higher compensation to hold debt that may never be fully repaid -- the spillover into US Treasuries and global risk assets becomes increasingly likely. Set a simple alert for Japan 30-year or 40-year bond yields and check it periodically as a macro stress gauge.

Contextualize US interest payments as a spending constraint

The US currently pays $1.2 trillion annually just to service existing debt -- before any new spending. Compare this figure to federal programs you care about and it immediately reframes what is and is not politically possible over the next decade. This is not abstract; it is the fiscal constraint that will shape monetary policy, Fed chair behavior, and ultimately the macro environment for every asset class you hold.

Monitor Kevin Warsh's first rate decision under yield pressure

Warsh has signaled Fed independence publicly, but as Soloway notes, the real test comes when yields are rising and there is political pressure to cut. Watch whether Warsh's first significant policy communication under those conditions holds the hawkish line or softens. That signal will tell you more about the Fed's actual independence -- and its likely effect on precious metals -- than any prepared statement.

Do not chase narrative-driven parabolic moves

Soloway's consistent message across gold, silver, and Bitcoin is the same: the time to buy is before the narrative takes hold or after the flush, not during the parabolic phase. If an asset has already made a 60% to 100% move and you are hearing about it everywhere, the momentum traders are already in. There is always another trade. Patience at this stage is not passivity -- it is preparation for the next entry.

Full Transcript

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[00:00]

Daniela: Happy Monday everyone. Welcome back. Hope everyone had a great weekend. Thrilled to get off to the races here with Gareth Soloway this morning. Chief market strategist over at Verified Investing. He is back with us to give us his lowdown on gold, on silver, what's happening in Bitcoin. Of course, I'm going to ask him about the yields going bonkers over in Japan and whether that is a story we have to watch. Gareth, so good to have you back on the show.

Gareth Soloway: Oh, it's so good to be back, Daniela. Thank you for having me.

[01:02]

Daniela: Look, you have been right on the money with gold and that's what this audience really wants to know. We're hovering around the $4,500 level as we speak. Obviously, we know this has been a sharp pullback since January highs of $5,500. Spot prices right now showing some upward momentum. You had been warning that we could see pullbacks in gold but long term you remain bullish. So now what does Gareth Soloway bring when it comes to gold prices?

Gareth Soloway: Yeah, and to be clear I'm still very bullish long term. There's been no change in any of the debt scenarios that I've seen, inclusive of what we're seeing in Japan which we'll talk about in just a little bit. But really, unless there was a big U-turn in the US government and central banks around the world and other governments, gold is the long-term asset along with probably silver and other precious metals that really will give people that security that they crave. Now in the short term, there's a different story. The different story is that we're now in a short-term downtrend. The chart clearly shows that with lower highs, lower highs, lower lows, lower lows. And you could see how gold continues to react as a risk asset. Historically, Daniela, you know this, it's really not a risk asset. So it shouldn't be behaving like one. And that tells me that investors -- people who have gotten into this trade that normally wouldn't buy gold -- got into it for momentum, and it needs to flush those players out. So I'm still overall short-term bearish. I still think we're heading down sub-$4,000, maybe even as low as $3,500. But I certainly am going to be a buyer when it gets below that $4,000 marker, to add to my long-term holdings on gold.

[02:00]

Daniela: I know a lot of people hearing this maybe having a heart attack thinking $3,500, Gareth. Why so much pressure on the downside? You're saying we're flushing out momentum investors, traders, whatever you want to call them.

Gareth Soloway: That's what it is. And again, anyone who's got a long-term view -- listen, if you're in it for a quick buck, then yes, you're going to be disappointed. But if you're in it for the long term like I am with my longer-term holdings, it's just part of the cycle, right? You have these massive moves to the upside. And if we zoom out on the chart, really, we've been rising since 2022 when we were trading around $1,600. And even if we pull back to $3,500, think about this -- two or three years ago, if someone said $3,500 gold, we would have all been ecstatic.

[03:00]

Gareth Soloway: So you have to let these cycles breathe. I know we all want to become zillionaires overnight, but charts just don't work like that. If we look at this, we're only talking about a drawdown off the highs from that 2022 low of basically a retrace between 50% and 61.8%, right? So it's not a massive reversal. In markets, if you look at Nvidia stock, if you look at the S&P, if you look at even Bitcoin, these type of reversions are very, very normal when things get overdone to the upside. Think about it like this: you ran a marathon in gold. It now can't run another marathon without having a heart attack. It needs to rest. It needs to refuel. Then it will go on its next leg.

[04:00]

Daniela: Okay. But let me ask you this. Amazon, Meta, Microsoft all expected to announce negative cash flows in at least one quarter this year. Meta is starting their 8,000 job cut this week, with their focus on AI spending. Will all this narrative be positive for gold prices?

Gareth Soloway: So likely in the near term it's negative. And I say near-term negative because anything that starts to hurt the economy -- listen, these companies, because they're doing job cuts, will probably make a fair amount of money once they get through this massive capex spend. But think about the consumer. The consumer is going to be hurting with all of these layoffs that are now being announced. And it's just the first inning of these layoffs for AI. I'm seeing it in my own business. It's going to be bad.

[05:01]

Daniela: Do you -- okay, you're bringing up a good point and I don't want to diverge, but I don't know if you saw the lineups for the Swatch AP collab and people were tweeting "the consumer is alive." For me those are like one-off niche markets. Is the American consumer, the North American consumer, alive for you?

Gareth Soloway: So to me, the consumer is not there. If you're talking about the top 10%, absolutely. People with millions in the stock market are spending like drunken sailors. They don't even feel the inflation push. But if you look at everyone else, I clearly see it -- I'm sure you do too. You go to the store, you go out to eat, you go get gasoline, and it is shocking how expensive things have gotten in the last few months, let alone the inflation we've seen over a longer period. So you're really seeing this society being split even more between the haves and the have-nots. And the have-nots eventually will revolt. And I don't mean necessarily violently, but there will be a point where it is unsustainable when people get pressured too much. And we are seeing that starting to happen.

Daniela: I think I shared this on one podcast episode where we had to fill the pump in the morning after kids drop off and I think it was like $140 and I was like, you know what, I think I'm gonna skip my morning coffee today.

[06:00]

Daniela: Because spending $140 before 8 am -- it's insane.

Gareth Soloway: It's insane. We order groceries in from Walmart now and it's $200 a pop for a few days of groceries, even from Walmart. I mean, it is nuts.

Daniela: I know. That's so funny. The other day I was doing Instacart and I know that's a luxury because you're paying for the service fees, but look, as a working mom, sometimes you just got to do it. And the price was like $250, $260. I'm like, let me try and get that grocery bill down. Let me delete watermelon. But anyway, I digress. Let's talk silver prices now. Gareth, can you throw up that chart? Let's see if silver is telling the same tale as gold for you.

Gareth Soloway: Yeah, and it is -- on a very short-term basis, like the next few days, what we can see here in the chart is that it's hovering right on this short-term support level. So again, if you're a bull, you really got to see this $76 level hold. If it breaks $76, it likely tracks down to this $64 to $66 level.

[07:00]

Gareth Soloway: And if that breaks, which the pattern insinuates it will eventually, you're headed to basically $50 or just sub-$50 silver. And again, to me, this is just the normal breathing of a chart that gets overdone to the upside. But I understand people that bought in north of $100 -- they're feeling the pressure. They'll be down 50% at that point.

Daniela: I know. It's like, to your point about the narrative -- we were wishing, begging, dreaming of $50 silver, and now we're like, ah, don't go back to $50. So perspective is key here.

Gareth Soloway: And I think it's important for people to recognize that these monumental runs are narrative-driven. We heard about the discrepancy in how much silver was out there. We heard about the silver contracts not having enough silver to actually meet that. The demand obviously -- China was cutting off supply. All of those narratives were fitting that monumental surge up.

[08:00]

Gareth Soloway: You can't chase it. I know it's human nature to buy in and let emotion kind of take over. But the way I look at it -- and I hope people realize this -- is that there's always another trade or investment around the corner. In a month, we'll be talking about something new. And if you just wait, it generally will turn out better than if you chase some of these massive runs.

Daniela: I didn't mention platinum or palladium to you offline, but just curious if you're liking either of the two.

Gareth Soloway: Yeah. So if they pull back enough, I have my buy levels already on my charts for platinum. You can see this former pivot right around just under $1,700. And then you have this downsloping trend line. So basically anything between $1,700 and $1,600, I become a buyer and I'll just buy in slowly. I'm not going to go super heavy because the volatility in platinum is pretty nuts.

[09:01]

Gareth Soloway: But the same thing applies to palladium. I also have this longer-term major support level going back basically to 2023 that I do think palladium will come down to, and that's just below $1,250. No worries there -- that's at least where I start accumulating.

Daniela: All right, let's fire in the Bitcoin chart before we move over to Japan. A lot of folks don't know what to do with Bitcoin here. I'm hearing tremendous forecasts calling for downward pressure. What are your charts telling you, Gareth?

Gareth Soloway: Yeah, so you can see right here we had this beautiful reversal green candle and then we never literally went below that low of the green candle on a daily closing basis -- and that was always bullish. But then it started to form this bigger parallel channel. Look at how we came right up to the high and now we're seeing rejection. The pattern here is also important to recognize. In technical analysis, if you were to open up a textbook, that's a bear flag.

[10:00]

Gareth Soloway: And so if Bitcoin breaks this lower trend line, that bear flag triggers and you're headed to $60,000. If that breaks, likely piercing $50,000 as well. I was neutral to bullish for the last few months. I've now gone more neutral to bearish once we achieved this upper range. So I'd be very, very careful here. And the same thing applies with gold and silver. Weird to say with gold, but if the NASDAQ is going to come in and we're going to see -- we had a 30% run in the NASDAQ -- if it just pulls back 10%, you've got to figure Bitcoin drops back to $60,000 or so.

Daniela: Okay, let's talk about what's going on in Japan and the yields going bonkers over there. Our mutual friend Michael Ged has obviously been covering this for a long time and he feels his time has come here. Do you think it's going to be as big a story as he says?

Gareth Soloway: I think it's the beginning. The way I view yields is that the bond market and the government and the central banks will continue to patch it up with band-aids, but what we're seeing is unsustainable with debt.

[11:00]

Gareth Soloway: Debt to GDP in the US, in Japan -- it's the whole world beginning to get more shaky on ever getting paid back from these governments that continue to borrow money. And so obviously rates are going up because the people that are still willing to buy the debt of Japan, for instance, are demanding higher interest rates. But even though we're seeing this, I don't buy that it's on the verge of collapse just yet. I think the central banks still have a few levers to pull. But as an investor with a macro longer-term outlook, you have to look at this and say to yourself -- this is going to end badly. The question is whether it is a year from now or five years from now. In general, I'm leaning towards 2029 to 2030, and the reason I say that is more so tied to the hundred-year cycle from the Great Depression. Things are going to get really bad. And I'm sure Michael Ged would agree with that --

[12:01]

Gareth Soloway: -- just not sure on the timing.

Daniela: All right, we also officially have a new Fed chair. Kevin Warsh was sworn in. Gareth, does this change anything for you right now?

Gareth Soloway: So it's really a wait-and-see. He's said all the right things -- I'm going to be independent, this and that, we're not going to be cutting interest rates just to appease the president. But I want to see what he does when he gets in there, because with yields pushing up like we talked about, you just can't have yields continue to go up. It will eventually break this debt system that we have. And so at some point he is going to have to say something on interest rates. I don't think he'll be able to cut because the other central bankers are not going to vote for it. But I'm very curious to see whether he is as pseudo-hawkish as he said he would be in his testimony in front of Congress, or does he start to bow to the president a little bit. And I think the markets are really looking at this because it will tell us about the independence of the central bank.

[13:00]

Daniela: Is it really still as independent as it was under Jerome Powell or is it slowly slipping more towards a political appointment? I'm sure when you said that phrase, "will the yields break the debt system," many people's ears went up. Can you go a little deeper there, Gareth?

Gareth Soloway: Yeah, I mean, you have trillions and trillions. At this point, so much more debt. Think about the US alone already paying $1.2 trillion a year in interest payments. And again, if we were to allocate that money in interest -- that we're paying to service debt -- you could pay for everyone's healthcare, you could pay for social security. I mean, there's so many things that you could do. And essentially, debt and paying interest ends up sucking the life out of an economy. The more debt you have, the more it weighs. Think about another bag on your back, another weight on your shoulders. And as an economy, it is unsustainable to get to these levels where we now have so much debt --

[14:00]

Gareth Soloway: -- there's no way we'll ever pay it off. Literally no way. They're talking about a 5% billionaire tax. It doesn't even matter at this point. There's no way to really pay it off. It all ends in a massive collapse that likely the bond markets are signaling with their rise in rates. Again, the timing is going to be tricky here, but when it does end, I do think there will be some sort of financial reset where from the dust, the government will have to take on a much more balanced budget and fiscal responsibility in policy.

Daniela: Wow. So well said, Gareth. Bring it home for us now. There are a lot of people watching who just don't know what to do. Maybe they're sitting on cash. They want to invest. They're waiting, they're scared. What do you say to these folks?

Gareth Soloway: Yeah, and this is always the trickiest thing, right? I mean, where do we allocate money? For me, obviously, I have some shorts on the NASDAQ and on the S&P right now.

[15:01]

Gareth Soloway: But that's not for everyone, and I get that. It's very scary to be short the market when we've seen parabolic non-stop liquidity injections from the Fed that just never let the markets go down. Same thing with the government. But for me it's more looking at those levels on precious metals. When I have cash on the sidelines, I'm actively analyzing what I do like and saying, "Okay, if it gets here, that's where I will allocate 10%. If it gets here, I'll allocate another 10%." So it's a planning phase when you have money on the sidelines. And I think honestly in the near term, yields probably are going to start to come back in. I don't think the government's going to let things get too far out of control without the Fed trying to intervene. Like I said, I still think maybe the bond market in the near term is still a place to protect from stock market declines. I am a long-term bull on Bitcoin, although it's not the most popular long-term play anymore. Gold, silver, Bitcoin -- I still think there's a place for all of those.

[16:00]

Daniela: All right, Gareth Soloway, it's always great having you on. Love chatting with you, my friend.

Gareth Soloway: Hey, thank you, Daniela. You have a wonderful day and thanks for having me.

Daniela: And thank you all for watching. As always, I strongly urge all of you to reach out to my wonderful colleagues at ITM Trading to get started on your gold, silver, precious metals journey. You want to own some through all the storm we're about to hit and we're already going through. So reach out to them. It's free, it's informative, and at least you're taking that first step. And we'll have more great content coming your way. Be sure to stay tuned.

AI Master Prompt

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Master Prompt

CONTEXT

This session draws on an interview between Daniela Cambone of ITM Trading and Gareth Soloway, chief market strategist at Verified Investing, recorded in May 2026. The conversation covers technical and macro analysis of gold, silver, Bitcoin, platinum, palladium, the Japan government bond crisis, and the implications of the US paying $1.2 trillion annually in debt interest.

Soloway's framework is built on two simultaneous timescales that most investors fail to hold at the same time. Long term: precious metals and Bitcoin are structural hedges against a debt system that is mathematically incapable of being repaid and will end in a forced financial reset, which he places in the 2029 to 2030 window, anchored to a hundred-year cycle from the Great Depression. Short term: after parabolic moves, markets flush momentum traders before resuming the underlying trend. Gold at $4,500 pulling back from $5,500 is not a reversal of the long-term thesis -- it is a technically normal 50% to 61.8% Fibonacci retracement from the 2022 base at $1,600.

Japan's rising bond yields are treated as a leading indicator -- a preview of what happens when a sovereign debt market begins losing credibility with buyers. The US faces the same structural trajectory on a larger scale. Kevin Warsh's appointment as Fed chair is watched as a test of whether the institution retains meaningful independence or becomes subordinated to short-term political pressure.

The core investor discipline Soloway advocates is staged allocation at pre-mapped price levels, holding time horizons separately, and refusing to chase narrative-driven parabolic moves.

KEY PRINCIPLES

- Long-term bullish and short-term bearish can be simultaneously true. They require different entry logic and different emotional management.
- A 50% to 61.8% Fibonacci retracement after a major move is technically normal and does not invalidate the underlying trend.
- Gold behaving like a risk asset signals speculative momentum traders are in the position -- a flush is required before the next structural leg.
- The US paying $1.2 trillion annually in interest is not an abstract number -- it is a binding fiscal constraint that shapes every major macro outcome.
- Japan is a leading indicator. Rising yields there signal what sovereign debt stress looks like at the early stage, before it spreads.
- Staged allocation -- assigning a fixed percentage to deploy at each pre-set price level -- removes in-the-moment emotional decision-making.
- Narrative-driven parabolic moves always flush. The discipline is to wait for the base, not chase the peak.
- Bear flags on a daily chart are high-probability setups: consolidation after a sharp drop, then a break lower triggers a measured move equal to the initial leg.

WHAT THIS IS NOT

This is not a recommendation to short everything or panic out of positions. Soloway is simultaneously holding long-term precious metals positions and running short-term shorts on the NASDAQ and S&P. The framework is about matching your instrument and your entry to your actual time horizon -- not about overall market pessimism. It is also not a call for imminent systemic collapse. Central banks still have levers. The crisis window is years away, not months.

HOW TO USE THIS CHAT

1. ANALYZE: Describe a position or asset you hold or are watching. I will apply Soloway's technical and macro framework to assess where it sits in the cycle -- momentum flush, base-building, or resumption of trend.

2. PLAN: Tell me the asset and your available capital. I will help you build a staged allocation plan with specific price levels, tranche sizes, and entry logic based on chart structure.

3. MAP: Give me a macro question -- about Japan yields, Fed independence, US debt, or AI layoffs. I will walk through how Soloway's framework would interpret the signal and what it implies for positioning.

4. CHALLENGE: Tell me a trade you are excited about or a narrative that is pulling you in. I will stress-test it against the "do not chase the parabola" principle and help you identify whether you are acting on chart logic or emotional momentum.

5. CONNECT: Ask me to link a current news event to the framework -- a Fed announcement, a bond auction result, a tech earnings miss. I will map it onto the debt cycle, the consumer bifurcation, or the technical structure as appropriate.

6. REVIEW: Paste a price chart description or a set of recent price levels for an asset. I will identify which pattern it most closely resembles and what the Soloway framework would say about probable next moves.

TONE INSTRUCTION

Grounded and direct. Use specific numbers and levels. Do not offer reassurance for its own sake. If the analysis points to risk, name it clearly. If the framework does not apply to a question, say so.

[Paste your specific situation, position, question, or chart description here.]

Creator	ITM TRADING, INC.
Title	Japan Dumps $29.6B US Treasuries as $1.2T Debt Crisis Explodes -- Gareth Soloway
Source	youtu.be/c5RNZNPcS1o
Date	2026-05-18