Now, after yesterday's report that the main market analyst at China's Caixin Market News and Analysis reports that he is convinced of a 40% devaluation of the Japanese yen is imminent and inevitable, here comes another report hot on the heels from the United States.
Market Watch reports in: The Yen's Looming Day of Reckoning
Japan is on an unsustainable path of a strong yen and deflation. The unprofitability of Japan's major exporters and emerging trade deficits suggest that the end of this path is in sight. The transition from a strong to weak yen will likely be abrupt, involving a sudden and big devaluation of 30% to 40%.
It will be a big shock to Japan's neighbors and its distant competitors like Germany. The yen's devaluation in 1996 was a main factor in triggering the Asian Financial Crisis. Japan's neighbors must have a strong banking system to withstand a bigger devaluation of the yen.Japan's nominal gross domestic product contracted 8% in the four years to the third quarter of 2011, and six percentage points of that was due to deflation. Without increased government expenditure, the contraction will be one percentage point more. Japan has not seen this kind of sustained deflation since the 1930s.
Without government deficits, Japan's economy will decline much more. Central government bonds and borrowings plus its guaranteed debts rose by 116.3 trillion yen ($1.4 trillion) during the period, equivalent to one-fourth of the level of the nominal GDP in the third quarter of 2011. If Japan had adopted balanced budgets, its economy would have contracted two to three times more. This will lead to a debt crisis in its private sector.
Without government deficits, Japan's economy will decline much more. Central government bonds and borrowings plus its guaranteed debts rose by 116.3 trillion yen ($1.4 trillion) during the period, equivalent to one-fourth of the level of the nominal GDP in the third quarter of 2011. If Japan had adopted balanced budgets, its economy would have contracted two to three times more. This will lead to a debt crisis in its private sector.
If you are living in Japan then it is time right now to get your house in order.
1) Stop using credit cards immediately
2) Get out of debt immediately
3) Store up at least three months (six months preferably) of food and water to get over the coming financial shock
4) Protect your wealth by obtaining physical gold and silver
These warnings about Japan's collapse have been coming louder and louder and more often over these past two months. The crash that was predicted by Karl Bass and reported here in Debt in Japan Actually 492% of GDP! UK 497% of GDP!:
...People going along, as usual, in their ignorant bliss. The "leaders" knowing full well what's going on but trying to get out with what they can, while they can! The only difference between the sinking ship and the economy is there won't be any rescue coming for us.
While the entire world watches Greece and Italy, it seems, from looking at this chart, the real action is the UK, Japan, Spain and France.
Business, government and household debt in Japan show a 492% of GDP problem for Japan. The tax and spend days are coming to an end soon in Europe, the USA and, of course, in Japan.
This entire house of cards is going to collapse around our heads. When the collapse does come, it will come suddenly. Hope you have cash readily available and at least a few weeks of food and water ready. Because when the crash does come, stores will be empty in a matter if a few hours - if it takes that long.
You've read it on this blog and I seriously warn people to get ready... This could break any day now considering the still simmering situation in Greece, the worsening situation in Spain, Portugal and Italy, tensions and saber-rattling by the USA and Israel against Iran... And now more problems with a world wide move away from the US dollar.
May you live in interesting times.... Indeed.
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