if it is not one worry than it would be another bother, and now, just in in-tray, not exactly good news, and most probably bad tidings, i.e. say bye bye to japan, their yen, and any and everybody they used to finance, say the us$, for starters
a fine mess, with euro not able to go higher, us$ must drop else teotwawki, and now, a yen that will surely be no more, all soon enough
Comments from a very successful hedge fund manager over the past decade-plus...
QUOTE
Sometimes we do feel that if there is a major new macro economic event unfolding it is necessary to bring it to the attention of our investors besides making money out of it of course. We believe such an event is beginning in Japan now.
Japan is expected to go through the 200% [edit: government] debt to GDP level in the next few months, a level that no developed country has ever come back from. This is a ratio that makes the US look underleveraged in comparison. The flip side of this equation is that Japan has $15 trillion of savings and a healthy, sub 100% loan to deposit ratio in its banking system. This has seen a flight to safety into Yen when global equities have come under pressure. We now are seeing a crossover approaching where Japan will for the first time need external financing to support its ballooning debts.
Additionally, Japan has moved to a trade deficit for the first time since 1983 and a collapse of their current account.
The Liberal Democratic Party is unlikely to hold onto power for the first time since the second world war and the population remains on a trajectory to halve over the next fifty years. The economy is contracting at a rate that seems unbelievable (circa 8% in the first quarter) and Japanese exporters are caught in a vice between a high currency and a collapsing global economy. What all this may set the scene for is a collapse of the Yen at some point in the not too distant future.
UNQUOTE
|
