Just Do It Japan

Gold Digest ^ | 05/28/03 | Doug Mcjkintosh

[bert]

Just do it Japan.

Doug McIntosh

Japan's economy is a fascinating thing to watch collapse in slow motion. One wonders if all the energy put into trying to deny it's collapsing, were used in trying to deal with the real problems what would happen. One of my fundamental beliefs is that the modern world has seen the moral corruption of the global ruling class and that corruption has led to the dismal failure of everything that ruling class tries to do. Yes Virginia, the people ruling this planet's economy, political systems and militaries really are incompetent. I'm reminded of the statement a young lawyer made after serving as a criminal defense attorney, a public defender, for low income criminals. She said, "I didn't think they would be that guilty"; likewise, I didn't believe our leaders could be that corrupt and incompetent. For that, I truly repent in sackcloth and ashes. With the exception of Ron Paul, the lonely congressman from Texas, I can't think of a single politician in the entire world who has any moral character.

The reason this essay's wrath is focused on Japan is simply this. I've written several essays here at www.gold-eagle.com commenting on Japan's imminent economic collapse. My faithful e-mail hounds, sort of my own version of the lamprey eel, have gleefully reminded me that Japan is still around. Oh really! For starters, there has never been a factual, documented and honest accounting of exactly how many bad loans the Japanese banking system is dealing with. The numbers bounce from $500 to 2 Trillion. Every single official economic statistic coming out of Japan is based upon this blatant deception involving the true financial status of Japan's banks. Japan has been in economic distress since 1990. Japan still won't even admit the monetary numbers used to value the loans upholding the 8% bank reserve requirement are a lie. The reason all this matter is Japan is the world's second largest economy and still has massive overseas investments. The other reason all this matters is that, finally, Japan is being made to face banking system reality.

The news out of Japan was stunning to anyone who understands how the global financial system really works. The first bunker buster was the public announcement that Japan's fifth largest bank would receive direct government aid to avoid collapse. The interesting thing about this was the Japanese government faces a debt closing in on 150% of the total Japanese GNP. A comparable American federal debt would be around 15 trillion dollars. The unasked question was why a government that far in debt would sell even more debt to bail out a bank. The answer is to prevent an economic collapse. Incidentally, one of the senior Japanese officials even commented that a financial collapse was indeed possible in Japan. This tidbit was sent out into the news media ether and promptly caused a near collapse in banking shares. After things calmed down a bit, phase two was launched.

There have been several mainstream media news articles about the following economic admission. We have the number five Japanese bank needing a bailout, from a heavily indebted central government that is threatening to nuke North Korea among other things. It's the admission, the public admission, that the largest four Japanese banks made no profit in 2002 and lost nearly 27 billion dollars that is shaking Japan to its rotten economic core. Even with all the lies, the phony numbers, the deceit, the government spin control, the top four banks lost money and the fifth one would collapse unless the taxpayers bailed it out. If you don't think that kind of admission has global economic implications, think again. For all intents and purposes, the Japanese banking system is now incapable of generating a profit. It is incapable of generating a profit even when the numbers are faked to hide the several trillion in bad debt. What do you think will happen to the NIKKEI 225 bank stocks when it dawns on stockholders that not only are the banks NEVER going to generate a profit, but in reality face staggering losses if an honest accounting was done? What do you think will happen to Wall Street when they figure out that one way these banks can cover themselves is by selling overseas assets? Assets, I might add that are denominated in a weakening US fiat dollar? Nah, I'm just being doomer. All those times I wrote about Japan's banks being bankrupt were just delusions.

If nothing else, this tells me that a controlled collapse is being allowed. The idea is to go down one stair at a time versus jumping out the 30th story window. Japan has been in free fall, deflation for over thirteen years. It's top five banks are money losing frauds. SARS, severe acute respiratory syndrome, is now shattering its economy. Heated rhetoric about a nuclear exchange with North Korea is now routine in Japan's newspapers. In that climate, how can anyone possibly think Japan's economy will grow or its banks will prosper?

What individual people need to understand is that it is up to them to sidestep the collapsing global economic order. Gold and silver are one way to do this. Buying sugar, tobacco, whiskey and other barter items is another. Whiskey will get you through times of no gold, better than gold will get you through times of no whiskey, is certainly a valid doomer cry in my opinion. Keep your eye on Japan and Asia. When SARS explodes this fall, look for some serious economic consequences. Can you imagine what the impact would be in the USA if the top four United States banks announced they were showing no profit for the year; the fifth said it needed a multi billion dollar bailout? That's what happened in Japan this week. Take note of it and understand what I've been saying for quite some time. The Japanese banking system is bankrupt. The Japanese government is bankrupt. This week's announcements were the first sighting of the tidal wave. There is a reason the Japanese people have been buying tons of gold the last two years. The reason being they understand just how bankrupt their banking system is. The lies will go on until the moment they cannot be sustained. Apres moi, les deluge said the French King. After me the deluge. The deluge is coming for Japan first and then the USA.

28 May 2003

[kissthis]

The Sky is falling....Buy Gold.

Brought to you by the people that sell gold.

[Eric in the Ozarks]

If Japan re-arms, look for a Nikkei bounce.