On Tuesday, the Dow Jones Industrial Average stock index crashed 870 points, the biggest drop since October.

The mainstream media predictably blamed President Donald Trump’s threat of tariffs over Greenland, but they were wrong.

Thanks to Bitcoin—which trades 24/7—we can actually go to the tape. It turns out Greenland barely made a dent. What caused the bloodbath was Japan.

Specifically, the drop was due to new Prime Minister Sanae Takaichi’s Monday press conference. She announced snap elections to bolster a raft of reforms, which would hike government spending and reduce tax revenue. This sent Japanese bonds crashing as bond investors worried Japan can’t handle its massive government debt.

The panic then bled into U.S. financial markets via the yen carry trade, where hedge funds and speculators have borrowed hundreds of trillions of yen at near-zero interest rates to park it in U.S. assets.

The trade worked fine when rates in Japan were kept artificially lower than in the United States and traders could employ plenty of leverage—like gambling with borrowed money.

But now Japanese bond yields are soaring with the 30-year yield setting new records and shorter-term........

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