Welcome back to The Breakdown with me, NLW.

It's a daily podcast on Macro, Bitcoin, and the Big Picture Power Shifts remaking our world.

What's going on, guys? It is Thursday, July 24th, and today we are talking macro. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the breakers discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Hello, friends.

Been a couple weeks since we dug deep into some macro, and that is what we are doing today.

And I would say that if you wanted to take away a theme of this show or an exploration,

it's really a query underneath, which is this.

Is this trade war that we're experiencing or sort of always flirting with right now, actually a

capital or a currency war underneath. Yesterday, the administration announced a trade deal with

Japan. Imports will be subject to a 15% baseline tariff rate. In exchange, Japan has agreed to

increase their imports of U.S. rice, open their markets to U.S. cars, as well as expand energy

and defense

purchases. The kicker and the reason Japan was able to secure a lower tariff rate was a novel

new investment fund. The administration said that Japan will establish a $550 billion sovereign

investment vehicle with funds, quote, targeted towards the revitalization of America's strategic

industrial base. They included examples like

energy infrastructure, semiconductor manufacturing, mining, pharma, and shipbuilding. The White House

claimed the U.S. will retain 90% of the profits from this investment. Treasury Secretary Scott

Besant praised the investment fund as the element that sealed the deal, stating, they got the 15%

rate because they were willing to provide this innovative financing mechanism. They came to us with the idea of a Japan-U.S. partnership where they're going to provide equity, credit guarantees, and funding for major projects in the U.S. Now, it is beyond the scope of this show to actually dissect the quality of the deal itself. Twitter is filled with people arguing that the deal isn't all that different from the status quo a year ago. Others are pounding the table that these aren't real trade deals that can be formalized

and ratified by Congress, but merely handshake agreements with no longevity. Another very loud

point is that Japanese cars will now have an advantage over domestic vehicles, with John Toomey,

the executive director of the Coalition for a Prosperous America stating, it doesn't make sense

...