Posted on 02/14/2002 3:08:26 AM PST by ex-Texan
The Panic Spreads
Benjamin Fulford
You can no longer safely shrug off Japan's economic crisis. It just might drag the world into a depression.
The world--including even the previously sanguine Japanese--is now catching on to the fact that Japan's 12-year slump has deteriorated into a full-blown crisis, threatening a wild global ride. Falloffs in various indicators in the world's second-largest economy resemble the plunge of such countries as the U.S. into the Great Depression of the 1930s.
What about the theory that Japan is so rich a nation that it can buy its way out of a financial collapse? After all, it is said, the huge debt overhang from the country's rotten banking system and the actuarial deceit of its postal- and insurer-based retirement systems is just a case of Japan owing itself. This is not Russia or Argentina or Thailand.
No, it's not Russia or Argentina. In fact, it is potentially something far worse.
"Japan is 42 times bigger than Thailand," says Kenneth Courtis (who is interviewed on page 58) , vice chairman for Goldman Sachs in Asia, referring to the country dubbed the epicenter of the 1997 Asian crisis. That bout cut world output by $300 billion in a year. Japan represents the "largest economic crisis since the 1930s," says Courtis.
Read the rest of this very long article
* * * "The world is heading for a once-in-a-century economic crisis," says Ryoji Musha, a strategist for Deutsche Bank in Japan.
How so? Consider the notion that, with perhaps $11 trillion in savings, the Japanese have enough wealth to cope. It sounds as if they do--until you realize that the total on- and off-balance-sheet claims on the household, corporate and government sectors in Japan are about $30 trillion, according to estimates by Goldman Sachs. That sum is six times Japan's $5 trillion GDP. (The total of U.S. public and private debt is $19 trillion, two times GDP.)
Those ratios in Japan are being made worse month by month, year by year, by deflation, which at perhaps 4% annually in Japan (measured in consumer prices) is the most pronounced in the world. Deflation aggravated the Depression in the U.S. in the 1930s. And it can spread. Cheap Toyotas are already putting pressure on U.S. auto prices. What if Japan devalued the yen, taking it from 133 to the dollar to 140 or 150 These Toyotas would then be even cheaper for U.S. customers.
Robert Jay Pelosky, the chief global strategist for Morgan Stanley, says: "This would send a price shock into the U.S. and Europe at a time when we [the U.S. and Europe] are flirting with deflation."
At the same time Japan faces a debt bomb at home, it is also the world's largest creditor. If its banks were panicked into calling in overseas loans, by, say, a run on deposits, an economic contraction would sweep America and the globe. * * *
Hit the link above to read more ...
A sarcastic comedy about Japan's income tax system (remarkably similiar to our own IRS) it also offers a funny view into Japan's underground economy.
The black market may become THE market, a free market where everything is available for a price regardless of government and corruption in high places.
Thursday, February 14, 2002 at 09:30 JST
TOKYO — Chief Cabinet Secretary Yasuo Fukuda on Wednesday dismissed Moody's Investors Service Inc's move to review for possible downgrade Japanese government bonds, saying the U.S. credit-rating agency does not understand Japan's "real power."
"Moody's is a private ratings agency. So, it is up to it" to make judgments about the Japanese economy, but, "I must say it does not know Japan's real power," Fukuda said at a press conference. (Kyodo News)
Remember boys, denial is not just a river in Egypt.
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