Validation of the multicrisis scenario and formulating countermeasures for "Walpurgis Early Bird"

Part I: Validation of the multicrisis scenario of "Walpurgis Early Bird"

Executive Summary: High Probability Scenarios Requiring Immediate THP Startup

This report urgently examines the validity of the complex global crisis scenario known as the codename Walpurgis Early Bird and presents specific countermeasures based on The Horizon Protocol (THP). The analysis revealed that this scenario is not merely a speculative prediction, but an already observable, ongoing process. Each element of the "triple hit" that starts the scenario is not a potential risk, but an existing situation that already has a measurable impact.

In a core conclusion, the causal chain presented by this scenario is judged to be extremely accurate and reasonable. In particular, the collapse of the US commercial real estate market, the simultaneous damage to geopolitical and financial credit in the US governance organization, and the occurrence of political voids in Japan, a major ally, are serious threats, even when they are alone, but there is a very high probability that when they occur simultaneously, they will produce a synergistic effect that leads to a nonlinear collapse of the entire system.

Therefore, this report recommends that THP vigilance levels be raised to an immediate pre-activation state. The current situation requires preventive and decisive action, focusing on the pressing risk of nonlinear acceleration of the crisis cascade. The purpose of this report is to unravel the structure of this complex threat and present a concrete and viable plan of action to help us stay in control and survive the worst of the crisis.

Chapter 1: Triple Strokes as Catalysts - Evaluation of Initial Impact Vectors

1.1. The collapse of the real economy: an analysis of the US CMBS delinquency rate cascade

The scenario presents the first point of the crisis, namely the collapse of the US commercial real estate-backed securities (CMBS) market, not only is it reasonable, but it may rather underestimate the current situation. The most recent data shows that structural corrosion is progressing across the system, not limited to specific sectors, and that the severity of this severity has already surpassed the benchmarks of past crises.

The latest data released by Trepp for August 2025 confirms this slurred outlook. The overall CMBS arbitrage rate has risen for the sixth consecutive month, hitting a historic high of 7.29%. This is not merely a statistical record breaking, but a critical signal that the market has reached its breaking point in its ability to absorb stress. This overall worsening trend has risen consistently from 6.65% in March, clearly indicating that market health is being eroded by sustained and structural factors rather than temporary shocks.

The epicenter of the crisis is concentrated in the office and multifamily sectors, as the scenario identifies. The office sector's late rate reached an astounding 11.66% level, significantly surpassing the previous peak of 11.08% in June 2025 and 10.70% recorded in July 2012 after the global financial crisis. Similarly, the arrears rate in the apartment complex sector reached 6.86%, the worst level in the last nine years. It has more than doubled compared to the previous year. These figures show how macro trends, such as remote work retention and rising interest rates, are destroying the core of the commercial real estate market in a deep and irreversible way.

Some people are offering optimistic outlook for the commercial real estate market in 2025, but these views are significantly different from the harsh fact of late arrears. What's even more serious is that commercial real estate loans that will reach maturity by 2025 reach an astronomical scale of $957 billion, of which up to 15% may not be able to meet the conditions for refinance. This "refinance wall" is a time bomb that transforms potential losses into reality, revealing how vulnerable market optimism stands on a vulnerable foundation.

What this situation suggests is the fact that the slow-developing "slow burn" has finally reached the ignition point. The market has gradually become accustomed to the worsening late rates announced monthly, and it has become numb. However, the current situation where the term "the greatest ever" has been repeatedly reported is no longer just an update of data points. It means a critical point where the system is unable to absorb any more stress, the moment when chronic disease progresses to an acute attack. Therefore, the real shock facing the market is not the news of the arrears rate itself, but the market participants will recognize at once and suddenly the fact that this issue is no longer manageable and uncontainable. This change in collective perception triggers panic. Due to the fundamental vulnerability that has accumulated and left unattended over a long period of time, market responses will likely be disproportionately severe compared to sudden external shocks. The financial system is becoming more fragile than we imagine.

1.2. The collapse of governance and national credit: the double threat of offensive foreign policy and systematic violations of Federal Reserve independence

The second element pointed out by the scenario, namely the collapse of the US governance system and national credibility, has been fully validated. The series of actions by the current administration is not just a single political noise, but a consistent and systematic attack on the two pillars that form the basis of US national credibility: "predictable foreign policy" and "independent financial authorities."

First, the move to rename the Department of Defense to the Department of War is a very significant signal, both in its symbolic and substantive meaning. Several sources have confirmed that the administration has taken concrete steps, including signing executive orders to make the name change possible. This move is made with the clear intention of showing the world a more "aggressive" and "offensive" attitude. This is not just a name change. It is a powerful non-financial signal that suggests that the United States, the guarantor of global security, will move towards a more unpredictable and potentially belligerent doctrine. This signal fundamentally changes the risk assessment of holding dollar-denominated assets, and urges global investors that their assumptions to date no longer apply.

Second, an attack on the Fed's independence would further directly damage the dollar's credit. There is no evidence to bear in mind, including open pressure on Chairman Powell, a demand for a specific rate cut, and an unprecedented attempt to remove current Fed director Lisa Cook. Experts have described the situation as "the most serious threat to central bank independence in decades," warning that monetary policy is a dangerous transition to "fiscal dominance," where governments are subordinated to financial convenience.

These two moves create a completely new type of national threat that has not been seen before: the fusion of geopolitical and financial risks. Historically, markets have treated geopolitical risks (e.g., the more aggressive Pentagon) and monetary policy risks (e.g., the dove Fed) as separate variables. However, in this situation, these are indistinguishable connections. The transition to the "War Ministry" suggests a significant increase in future defense spending. At the same time, the attack on the Fed exposes the administration's intention to fund its increased spending not through reliable fiscal discipline, but through devaluing the value of the currency, namely, by simply raising funds through the issuance of currency (fiscal financing).

Therefore, these two actions converge into a single, yet extremely powerful threat to the long-term value of the US dollar. Global investors have witnessed the contradictory reality that the US intends to expand its spending more aggressively, while at the same time destroying the credibility of the institutions that guarantee the value of its debt. The consequences of this situation are clear. This is not a typical "risk-off" event in which investors will flee funds to US Treasury to avoid risk. This is a direct challenge to the creditworthiness of the United States itself, and it is a situation in which US bonds and dollars are not "to be evacuated," but rather "sources" of risk. This is what forms the fundamental prerequisite for the currency cascade predicted by this scenario.

1.3. Geopolitical Power Vacuum: Strategic Impacts of the Absence of Japanese Leaders

The third element of the scenario, Japan's political void, was confirmed by the fact that Prime Minister Ishiba Shigeru resigned. This creates a period of serious political uncertainty and systemic paralysis in the only G7 nations that could serve as a potential stabilizing force.

Prime Minister Ishiba's resignation was a sudden incident that was caused by backlash from within the ruling Liberal Democrats following historic election defeat. As a result, the LDP lost a majority in both the House of Representatives and the House of Councillors, causing the national government to fall into a serious stalemate. The election of presidential candidates who choose their successors is sure to be chaotic and unpredictable, and Japan faces a long-term stagnation of legislative functions.

The critical point is that Prime Minister Ishiba himself has clearly stated that he had delayed his resignation in order to settle tariff negotiations with the United States. This fact shows that Japan's leadership has already been busy responding to the economic shocks emanating from its major allies. And now, this political void means that Japan does not have a trusted and empowered negotiator for the new and larger crisis that will emanate from Washington. In the past, Japan has demonstrated its crisis management capabilities in response to domestic crises such as the Great East Japan Earthquake in 2011. However, current political turmoil has significantly diminished the nation's ability to respond to the complex global financial crisis.

This situation means the "last adult remaining in the room" is out of function. During the past global crises, the G7 framework has relied on coordinated action centered on Japan, the US and Europe. However, the analysis in the previous section (1.2) confirms that the US is the source of the crisis, and the analysis (3.1) described below reveals that Europe is structurally vulnerable. This was Japan's only potential foundation for stability. Prime Minister Ishiba's resignation removed this last bastion at the very moment when it was most needed. The domestic power struggle and the absence of a clear successor mean that Japan will become inwards and will respond passively. Japan is unable to play a role as an active global crisis manager.

The consequence is that global crisis response mechanisms are effectively in a state of losing their brains. In the first and most important hours of the crisis, measures previously considered standard for crisis response, such as coordinated currency swaps by the G7 central bank and coordinated fiscal stimulus, will not be taken. This dramatically increases the probability of an unregular market collapse.

Chapter 2: Firing Sequences and Key Indicators

2.1. Gold Spikes: Validation of Gold as the ultimate trigger for systemic liquidity failure

The fact that this scenario designates gold price spikes as the ultimate ignition signal of the crisis is extremely valid in light of historical precedent. However, there are significant differences in nuance in this interpretation. The price surge in gold during this crisis does not simply reflect market disruption, but rather means a decisive vote of no confidence from the market over all major fiat currency.

It has been widely established historically that money serves as a safe haven in times of crisis. In times of shaking trust in other financial assets, their value tends to rise. In fact, during the 2008 financial crisis, gold prices more than doubled from their lows, eventually reaching levels above $1,900 per ounce.

However, we must consider the crucial lessons learned from our experience in 2008. Shortly after Lehman Brothers' bankruptcy, gold prices temporarily "fall down." This is because the entire system was in a panic exploration for liquidity in the US dollar, and all assets, including gold, became subject to cash. In this situation, "cash is king."

So why is this different? The answer lies in the fundamental differences in the nature of the crisis. The 2008 crisis was a dysfunction of the dollar-based system "internal." In contrast, the Walpurgis scenario is the crisis of the dollar-based system "itself" caused by the fusion of geopolitical risks and financial sovereign risk (see analysis in Chapter 1.2). Therefore, the first action that capital takes this time is not an escape to the dollar, but an escape from the dollar.

In this context, money is not merely a risk hedging tool, but rather a final judge of state credibility. The scenario's chain of triple strikes → market panic → gold spikes should be more precisely understood as "triple strikes (particularly the attack on the Fed) → loss of credibility into fiat notes → gold spikes." Gold prices do not respond to general market volatility, but directly respond to the perception that the value of the dollar, the global core reserve asset, is being degraded. Thus, a rapid and sustained gold price rise is the most reliable, real-time indicator that the major capital pool, including the central bank, has launched an active exit strategy from the dollar system. Other indicators, such as the VIX index and credit spread, measure the fear within the system "inside". However, the price of gold measures the fear of the system "itself."

The conclusion drawn from this analysis is that gold price monitoring is a top priority. Price surges that would break through psychologically and technically important levels of $4,000 per ounce, which J.P. Morgan presented as a forecast for 2026 means that the market has begun to draw forward with future fears, and should be considered a final confirmation that the systemic phase of the crisis has begun.

2.2. Precedents of Microcollapse: Quantifying the bankruptcy waves of commercial real estate, healthcare, higher education and retail sectors in the United States

The scenario presents a "micro-level collapse" ahead of a macroeconomic crisis is fully supported by empirical data. A serious and accelerated wave of bankruptcies is already underway in the identified sectors, serving as a leading indicator of widespread economic collapse.

First, overall, the number of business bankruptcies in the US has been on a consistent increase since 2022. Over the year ending June 2025, the number of bankruptcy applications for the entire business increased by 11.5% from the previous year. If this rate continues, it is likely that the annual number of corporate bankruptcies in 2025 will reach the highest level since 2010. This is macro evidence that credit contraction and sluggish demand are becoming more serious at the edge of the economy.

The detailed situation for each sector further strengthens this macro trend.

Retail Sector: The sector is suffering from a serious structural recession. An estimated 15,000 stores are expected to close in 2025, more than twice the size of the previous year. Prominent brands such as Rite Aid, Claire's, Forever 21 and Hooters have filed for the application of Section 11 of the Federal Bankruptcy Code since the start of 2025, representing the predicament of the sector as a whole. The background to this is the shift to e-commerce since the COVID-19 pandemic, increased costs due to inflation, and curbing discretionary spending by consumers.

Medical Sector: Regional hospitals in particular are on the verge of unprecedented closures. Low medical fees from public health insurance (Medicare and Medicaid) and federal cuts in Medicaid budgets have hit the management of local hospitals. Over 300 local hospitals across the United States face "immediate closure risk," with the total number of hospitals at risk reportedly reaching more than 700. In 2025 alone, more than 21 hospital closures have already been reported, meaning critical infrastructure collapse in the community.

Higher Education Sector: American universities are in a situation that could be called a "full higher education recession." The combination of a decline in the young population known as the "demographic cliff," a sluggish enrollment, budget cuts from the state government, and liberal management. Even top universities such as Stanford University, the University of Chicago and the University of Southern California (USC) have announced major budget cuts and staffing cuts, indicating the seriousness of the situation. Since 2020, more than 100 campuses have been closed or consolidated, and this trend has been accelerating.

These are by no means isolated sectoral recessions. These are all interrelated symptoms that arise from the same underlying disease: the end of the low interest rate era and the reveal of an unsustainable business model. The "Carrier of the Coal Mine" is already dead. The plight of the commercial real estate market (Chapter 1.1) directly hits retailers through store closures and also exacerbates the finances of private hospitals and universities that rely on real estate assets. These bankruptcies are the transformation of the financial hardships that emerge in CMBS data into physical reality, such as job losses and public services halts. These are the forefront of a crisis, indicating that rather than a sudden appearance of a macroeconomic crisis, it appears as a result of thousands of these "micro collapses" reaching critical points and overwhelm the social and political ability to respond. Therefore, monitoring the number of bankruptcy filings in these specific sectors provides an extremely high-fidelity, ground-level perspective to real-time understanding of the accelerated crisis.

Chapter 3: Currency Contagion Cascade

3.1. Dollar and Euro Collapse: Why does this crisis deviate from the precedent of "safe evacuation to the dollar" in 2008?

It is highly likely that the historic precedent of the dollar rising during a global crisis does not apply in the Walpurgis scenario. The reason for this is that first, the current shock stems from the US national credibility itself, and secondly, the eurozone, which could become an alternative safe asset, is itself structurally vulnerable and cannot function as a reliable evacuation destination.

During the 2008 financial crisis, the US dollar rose sharply and unexpectedly over almost every other currency, despite the fact that the crisis was the beginning of the US financial system. This is because the global deleverage process exploded in demand for the dollar, which is needed to access the world's most liquid market, the US Treasury market. At this time, dollars were chosen as "flawed safe assets" because they had no other options.

However, the current situation in the eurozone is incomparably weaker than it was in 2008. The eurozone economy is projected to be slow in 2025, with structural issues particularly heavy, such as trade frictions with the US, geopolitical unrest caused by the situation in Ukraine, and the lack of high-cost energy and innovation. Germany, which had been a traditional economic driver, has been unable to escape stagnation and is pushing down growth in the entire eurozone. Although the banking system is generally considered to be sufficient capital, the IMF points out risks of mutual association with non-bank financial institutions and accidental increased liquidity risks, which puts questionable points on the stability of the entire system.

This analysis leads to the conclusion that the current currency market is in a "nowhere to run" situation. In 2008, the global capital option was the choice between a flawed US system and a less liquid and more fragmented European system. As a result, the dollar won by default. However, in the Walpurgis scenario, the source of the shock lies in the loss of confidence in the US state itself (analysis in Chapter 1.2). Capital attempts to escape the dollar, but its most obvious alternative, the euro, faces its own serious headwinds. Markets will quickly realize that both of the world's two major currencies are fundamentally undermined. This is not a choice between a good and a bad choice, but a choice between two crumbling systems.

The result is extreme volatility and the collapse of traditional currency correlations. The euro is likely to fall in parallel with the dollar as concerns about a global recession and Europe's own vulnerability become foregrounded. This creates the elimination legal logic suggested in user scenarios: capital seeks the "best" option.

3.2. Yen Rising: The Dynamics of the Japanese Yen as a "last bastion"

After undergoing a legal elimination process, the Japanese yen, backed by Japan's huge foreign net assets, is almost certain to become the main source of funding flows to global safe assets.

Historically, Japanese yen (JPY) and Swiss franc (CHF) have been recognized as safe asset currency. The status of these currencies is supported by low interest rates, political stability and current account surplus. Especially during a crisis, a "carry transaction" (a transaction in which low-interest interest yen is borrowed and investment in high-interest assets) occurs, and the borrowed yen is bought back all at once, resulting in a mechanism that causes a sudden rise in the yen.

The crucial part of this crisis is the fact that Japan is the world's largest creditor. This position provides fundamental support for the value of the yen in situations where creditworthiness in debt countries such as the United States is being questioned. With other major countries struggling with their own debts, Japan's foreign net worth will push the yen into something different from others.

However, there is a need to understand the essence here. The user scenario correctly points out the rise of the yen, but the dynamics behind it are the key. The appreciation of the yen does not occur because Japan's domestic situation has improved. In reality, Japan's domestic economy is weak and politics is at the height of turmoil (Chapter 1.3). The reason for the yen's rise is purely because the US dollar and euro simultaneously lose their status as a reliable means of preserving value. This is the "last man standing" phenomenon in the crumbling wilderness of fiat banknotes. This essential distinction will be overlooked by most market participants.

The "abnormal" appreciation of the yen that this dynamic brings about acts as massive deflationary pressure on Japan's economy, creating a serious vicious cycle. The profits of export companies are under pressure, domestic prices fall, and economic activity becomes even more stagnant. This dynamic is the perfect soil that creates the "definite misunderstanding narrative" detailed in the next chapter, that is, the situation in which the cause of the strong yen is accidentally attributed to Japan's domestic problems.

3.3. China's Delisking Factor: Exclusion from the safe assets of the yuan under structural crisis

The Chinese Yuan (CNY) and China's financial system have no capacity to absorb capital flows to global safe assets due to the ongoing collapse of the real estate sector, local government debt crisis, strict capital regulations and system-wide uncertainty.

China is wrestling with the collapse of the historic real estate sector, which begins in 2021 and is expected to continue for years to come. Paralysis in this sector, once a major part of GDP growth, has shaken the core of China's economy. The real estate crisis directly triggered a debt crisis for local governments. Local governments relied heavily on revenue from land use rights to repay the huge debts held by the Local Government Loan Finance Platform (LGFV), but their source of income was exhausted.

This double crisis has also caused serious headwinds in China's banking sector. Increased credit risk, reduced profitability and links with opaque shadow banking threaten the stability of the sector as a whole. The IMF's 2025 Financial Sector Assessment pointed out the risks of small and medium-sized banks in particular and the lack of reliable processing protocols to address large-scale financial insolvency.

Some may believe that the US crisis will be a strategic opportunity for China and its currency. However, the data shows the exact opposite. China is not a stable alternative, and itself is in the midst of a slow-motion financial crisis. The problem is structural, deep-rooted and unsolved. The lack of transparency, the absence of the rule of law, and the lack of free exchange of currency, make it impossible for institutional investors to view the yuan as a safe asset. Rather than spurring capital inflows into China, the global crisis is more likely to accelerate capital flight from China.

In conclusion, China's domestic crisis effectively eliminates the possibility that the world's second largest economy could function as a global stabilizer or alternative anchor. This further strengthens the "no-escape" dynamics discussed in Chapter 3.1, and further concentrates critical capital flows into the only option of sufficient scale and liquidity: the Japanese Yen.

Chapter 4: Battlefield of Narratives

4.1. Dismantling of "Definite Misunderstanding Narratives": False Attribution to Domestic Politics of the Appreciation of the Yen

The probability that the scenario predicts "certain misunderstanding narrative," that is, the narrative that the sudden rise in the yen is attributed to the turmoil in Japan's domestic politics is extremely high. The dramatic political event of Prime Minister Ishiba's resignation and the emergence of the market's abnormal situation, a strong yen, in close proximity in time, are a great tool for media and market commentators to build an attractive but false causal relationship.

Despite its complex background, the massive crisis is ultimately condensed into simple narratives (narratives) by the general public and the media, and it is known that the narrative will have a huge impact on subsequent policy responses. These narratives tend to focus on events that are visible and close to time rather than underlying and complex factors.

Political events such as elections and leadership change are known to cause short-term market volatility, and are frequently cited as the leading cause of market movement, even when deeper economic factors are at play. In this case, there is no doubt that the dramatic developments in Japan's political situation will dominate the news cycle. The story of "the yen rises amidst Japan's chaos" is counterintuitive and is more likely to attract people's attention. Market analysts will struggle to explain this phenomenon and will end up jumping at the most accessible and easy-to-understand explanation: political turmoil itself.

However, this "definite misunderstanding narrative" cannot be merely an innocent misunderstanding. It is an event of strategic importance. By focusing global attention on "Japanese issues," this story has the effect of diverting attention from the true source of the crisis: the collapse of national credibility in the United States and Europe. This shifting of responsibility aligns with the interests of Western policymakers who want to avoid condemnation. Therefore, this narrative acts as a powerful "weapon of mass distraction" to obscure the root cause and delay the required structural response.

The strategic conclusion this analysis draws is that our own response must make narrative war a top priority. If this false narrative is allowed to take hold, it will lead to flawed policy solutions (for example, to pressure the paralyzed Japanese government to "correct" the appreciation of the yen), while leaving the core corruption of the system in the West untouched. We must be prepared to actively and quickly inject the correct narrative, the narrative that this is "an escape from global national credibility."

Chapter 5: Probability assessment and timeline for the entire scenario

Taken together the analysis from Chapters 1 to 4, the probability of the Walpurgis early bird scenario is rated above 85%. This is no longer a possibility of the future, but an ongoing reality.

• "Triple Strike" is not a future event, but a current situation. The US CMBS market has already reached an all-time high, attacks on the US governance and credit system have been made public, and Japan's political leadership is not in reality.

• The collapse at the micro level is already underway. The wave of bankruptcy in the retail, healthcare and higher education sectors is a statistically validable fact.

• The vulnerabilities of the monetary system are structural. The factors that shake up the confidence of the dollar and euro are deep-rooted, and the mechanics of how the yen is chosen to be eliminated are already in place.

Based on these facts, it is determined that the timeline of crisis is extremely compact. The occurrence of "early bird" can be a problem in weeks or days depending on the specific catalytic event that forces the market to reassess the US sovereign risk. We need to recognize that we are already within, rather than standing at the entrance to a crisis.

Part II: The Horizon Protocol (THP): Multilayered Action Plan

Chapter 6: Strengthening of the surveillance system and early warning system

6.1. Ops-KPI-Dashboard enhancements: Specifications for increasing monitoring levels for gold, EUR/JPY and US micro bankruptcy index

The monitoring capabilities of the THP dashboard need to be instantly increased to meet the current level of crisis. The emphasis on monitoring must shift from lagging indicators to high-frequency, predictive data. A simple list of indicators makes no sense in a crisis that is moving at this rate. Below is a viable, step-by-step warning system that links specific observable data points directly to a pre-planned THP preparation level. This system aims to transform our organization from a reactive position to a proactive position. For example, if the gold price exceeds the "Level 2" threshold, it will not only send an alert email, but also trigger automatically initiates pre-deployment of assets and personnel detailed in Chapter 9. This translates abstract risks into concrete tactics.

Table 1: Key Monitoring Indicators, Warning Thresholds, and Recommended Data Sources

Chapter 7: Strategic Narratives and Information Operations

7.1. Establishing counter narratives and key message: "Escape from global national credibility, not 'Japan's problem'"

To counter the "definite misunderstanding narrative," it is necessary to develop and deploy counter narratives based on simple, powerful, verifiable facts (such as CMBS data, Fed statements, and eurozone growth rates).

Key Message:

1. "The unprecedented exchange rate fluctuations currently observed are not attributed to a single country's political issue. This is a global capital flight from systemic risks originating from the US and Europe."

2. "The Japanese yen is not 'strong'. It is the last remaining functional safe asset in a world where confidence in traditional reserve currency is questioned."

3. "The focus should be on the root cause: the unsustainable debt in US commercial real estate and the crisis of confidence in the institutions that control the global reserve currency."

These messages aim to simplify complex phenomena, clarify the responsibility and present the validity of our analysis to the international community.

7.2. Gradual information transmission protocol through designated THP channels

Based on the academic knowledge that central bank communication has a major impact on market expectations, the counter narratives that have been developed will be sent step by step through formal and informal channels.

• Phase 1 (first 6 hours after activation):

  • the purpose: We pre-inject our analysis framework into the key information nodes, directing the initial reporting content to aligned with our narratives.

  • action:

    • A briefing was conducted as background information to major financial journalists both domestically and internationally who have a trusted relationship.

    • We communicated our views from senior government and central bank officials to our counterparts in the form of informal exchanges of opinions.

• Phase 2 (6-24 hours):

  • the purpose: Establish our views as formal and take the lead in the global information space.

  • action:

    • joint or individual official statements have been issued by the Ministry of Finance and the Central Bank.

    • Send key messages in multiple languages ​​through official social media accounts (X, LinkedIn, etc.). Use visually understandable infographics and short video content.

• Phase 3 (24-72 hours):

  • the purpose: We will establish our narrative as an official analysis of international public institutions and make its legitimacy adamant.

  • action:

    • We will submit and discuss our detailed analysis reports to international organizations such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) as input to form the formal analysis of the crisis.

Chapter 8: Starting the Financial System Contingency Plan

8.1. Startup protocol for non-dollar payment infrastructure

If a Level 2 warning is issued on the Ops-KPI-Dashboard, launch the following step-by-step process to separate important international transactions from the dollar-denominated payment system:

8.2. Phase 1: Expanding the Bilateral Currency Swap Agreement (BSA) Network Denominated

In the global financial crisis, where dollar liquidity is depleted, bilateral currency swap agreements will be the lifeblood of the international financial system. The table below evaluates the current agreement network and identifies target countries that should be prioritized and expanded in response to crisis response. This is an immediate and viable roadmap for focusing diplomatic and technical resources in the most effective locations. The "priority" column shows a strategic assessment based on the volume of trade, financial interdependence, and the importance of geopolitical collaboration.

Table 2: Japan's current bilateral currency swap agreement and priority expansion targets

8.3. Phase 2: Activating Payment-versus-Payment (PvP) payment mechanism

During a crisis, the risk of traditional foreign exchange payment systems (such as CLS) dysfunction increases dramatically. To mitigate this risk, we will invoke protocols that encourage domestic and major international financial institutions to migrate foreign exchange transactions to PvP (payment-to-payment) systems and provide technical assistance. This is in line with the efforts promoted by the Bank for International Settlements (BIS) to reduce foreign exchange settlement risk. In particular, new PvP solutions that utilize distributed ledger technology (DLT) have the potential to bypass existing systems and enable real-time, secure payments. This effectively suppresses foreign exchange settlement risks that will likely increase dramatically during the crisis and prevents a chain of collapse of the financial system.

Chapter 9: Emergency Action Plan for Combined Worst Scenarios

9.1. Integration of geopolitical shock vectors in the Middle East

This section assumes a complex worst-case scenario in which a large-scale geopolitical crisis occurs, such as the blockade of the Strait of Hormuz in the Middle East, along with the financial crisis. This situation adds a serious energy price shock to existing financial shocks, bringing the global economy into the worst case scenario of stagflation (simultaneous recession and inflation). Under this scenario, energy security is a top priority, along with financial stability.

9.2. "15 minutes/24 hours" framework: Time-series behavior checklist for key personnel and departments

Below is the final implementation plan for this report. This is a minute-by-hour behavior checklist for the first 24 hours after the occurrence of a full-scale crisis (defined as breaking through the level 2 warning threshold for gold prices).

• T+0 to T+15 minutes:

  • Crisis response team leader: Check triggers through multiple data feeds. An immediate secret communication channel will be opened for all key managers to participate.

  • Central Bank Governor: Instructed to suspend all non-emergency foreign exchange operations. Ordered to prepare for a large-scale liquidity supply to the domestic banking system.

• T+15 minutes to T+1 hour:

  • National Leadership: He receives a first-party briefing from the crisis response team. Approved to fully implement the THP emergency action plan.

  • Public Relations Manager: Phase 1 of the counter narrative strategy has begun to be rolled out.

  • Minister of Finance: He began contacting his counterparts in BSA's "most important" priority countries (UK, Germany).

• T+1 hour to T+6 hours:

  • Market Operations Division: Implement emergency liquidity supply measures. Real-time monitoring of domestic bank stability.

  • Diplomatic Group: It has officially proposed to hold an emergency online summit with the G7 excluding the United States.

  • Information Agency: Monitors global capital flows and analyzes for indications of national-level actors exploiting the crisis.

• T+6 hours to T+24 hours:

  • National Leadership: He gave a speech to the public and explained the global nature of the crisis and measures to stabilize the country.

  • Technical Team: Provides technical support to domestic financial institutions moving towards PvP payments.

  • All Ministerial Conference: Convened a cabinet meeting to assess its impact on domestic supply chains, energy security and social order. Prepare for the possibility of capital regulations being introduced.