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I Am Hedging My Entire Mortgage in Yen: John Mauldin

I Am Hedging My Entire Mortgage in Yen: John Mauldin

If the dramatic moves in the Yen and Japan's benchmark Nikkei 225 (^N225) index lately have caught you by surprise, then prepare to be stunned for what's about to happen.

That's what John Mauldin, founder of Mauldin Economics and the Thoughts from The Frontline newsletter, has to say about a nation that he believes is embarking on a desperate course of devaluing its currency to save its own life.

"The Japanese are in a situation where their only real path out (of a shrinking economy) is to devalue the Yen," Mauldin says in the attached video. "This is a country that is going on sale."

In fact, he's not only predicting the Dollar/Yen will slump to 200 versus the U.S. dollar in the next 5 years, he says he is planning to hedge his entire mortgage to Japan's weakening currency in hopes of paying for his new Dallas apartment.

"The country is dying. People are retiring," he says, adding that by the time "Abenomics" has run its course, "you'll be able to buy a Lexus cheaper than a Kia."

Further complicating their comeback is what he calls the "Demographics of Doom," which highlights the growing ratio of the country's retirees compared to those actively working.

"When you're at debt-to-GDP of 245% you're beginning to run up against your limit to borrow money at rational interest rates," he says, defending the country's decision and course, yet he's also certain that "it doesn't end well."