Bessent’s Big Short on Japan

Scott Bessent made $3.5 billion crashing the Japanese yen when he worked for George Soros and he just spent upwards of $10 billion of our tax dollars to prop it back up.

The yen hit a 40-year low, 162 to the dollar. The worst it has been since 1986.

Japan panicked and spent a… pic.twitter.com/D12W6MLDPz

— theleahfiles (@leahfiles) August 31, 2026

Scott Bessent made $3.5 billion crashing the Japanese yen when he worked for George Soros and he just spent upwards of $10 billion of our tax dollars to prop it back up.

The yen hit a 40-year low, 162 to the dollar. The worst it has been since 1986.

Japan panicked and spent a record $96.4 billion trying to prop up their own currency. That did not work, so Japan started selling US Treasuries. They dumped $29.6 billion in the first quarter of 2026 in the largest quarterly sale since 2022.

Why does that matter?

Japan holds $1.24 trillion in US government debt. They are our largest foreign creditor. When Japan sells our bonds, US borrowing costs go up, yields spike, and the housing market, deficit, and entire federal budget gets more expensive.

And that is a problem for Bessent because his whole buyback scheme depends on keeping yields down. He just doubled buybacks to $4 billion per operation and he is sitting on a $950 billion war chest in the Treasury General Account.

If Japan keeps dumping Treasuries, it blows up his entire operation.

So what did he do?

He used the Exchange Stabilization Fund, i.e. our tax dollars, to buy upwards of $10 billion in yen in the first coordinated US-Japan yen intervention since 1998.

Senator Warren asked some pretty obvious questions.
How much was spent?
What was the legal basis?
What is the current value of the position?

Instead of answering, Bessent attacked her personally, saying she knows less about foreign exchange than she does about banking. He answered nothing.

So, in the 1990s, he attacked the yen for Soros and made $3.5 billion.

In 2026, the yen is at a 40-year low, and Japan is selling our bonds to survive. But that move threatens his buyback operation, so he is spending our tax dollars to prop up the currency he crashed.

And when Congress asked for basic details, he insulted the senator and refused to answer.

This is not normal behavior. Treasury Secretaries do not personally attack members of Congress for asking how public money was spent. They do not refuse to disclose the size of currency interventions.

Something is different and it is not good.

Here is why you should care:

If the buyback scheme works, the dollar keeps weakening. Americans’ groceries, gas, rent cost more, our savings lose purchasing power.

The dollar is already down 8.8% since January 2025.

If it fails and Japan keeps dumping Treasuries, yields will spike. Your mortgage rate is directly tied to the 10-year Treasury yield he is trying to suppress, so that will go up. Car loans will go up. The deficit will balloon.

Either way, he is sitting on a $950 billion federal cash reserve and signaling he will drain it to fund more buybacks.

That is the government’s emergency money. If there is a recession, a bank run, a real crisis, the cupboard is bare because he spent it manipulating the bond market. Do you see the problem?

And there is zero transparency of public money.

Here is what to watch our for:

(1) November 4 is the Treasury’s quarterly refunding announcement. Bloomberg reports Wall Street is already war-gaming a major shift in borrowing strategy. If Bessent starts issuing more short-term debt to fund long-term buybacks, that is the Treasury Twist and an escalation.

(2) Watch the TGA balance. If it starts dropping from $950 billion, he is draining the war chest.

(3) Watch Japan’s Treasury holdings. If they keep selling past the $29.6 billion pace, the yen intervention failed and he needs a bigger play.

(4) And watch for more currency interventions. The yen was the first. If he starts propping up other currencies to keep foreign governments from dumping our bonds, the pattern is set and it’s not a good one.

A currency speculator is running America’s Treasury, manipulating the bond market, spending our tax dollars on currency interventions, draining emergency reserves, and refusing to tell our elected representatives how much any of it costs.