From: Forrest Bishop (forrestb@ix.netcom.com)
Date: Wed Apr 10 2002 - 19:45:38 MDT
It is next to impossible to keep your eye on all the balls in play these days. Two non-ME situations are just as important to your
well-being.
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http://www.usagold.com/business/cpm/cpmforum/
Black Blade (04/10/02; 18:42:48MT - usagold.com msg#: 73107)
Japan - Is It just The Banks That Are Insolvent - Or Is It The Whole Damn Country?
Recently George "Dubya" Bush went to China and on his way he stopped over in Japan for a "courtesy call" on Japanese Prime Minister
Junichero Koizumi. The problem it seems is that this was no ordinary "courtesy call" or just a couple of chums yukking it up over a
few cases of sake. It seems that the problem of Japan's insolvent banks and failing currency are very likely to drag the rest of the
world into a deep Global Depression and the Japanese aren't doing much to stop it.
Japan is the world's second largest economy and it also has the world's largest level of public debt to the tune of 140% of GDP.
That's a colossal load of debt. Across this Island nation bankruptcies and unemployment are rising to new record levels never seen
before. The Nikkei 225 has recently hit new lows, consumer confidence is nearly nonexistent, and consumer prices are falling fast.
In fact housing prices are falling to levels not seen since 1982. Many properties are priced far below the mortgage values creating
some major concerns for the insolvent Japanese banks (more on this later).
Joblessness, bankruptcy, crime, and suicide were once almost unheard of in Japan, and now these problems are so common that they
rarely even make it to the back pages of Japanese newspapers. These days it is not uncommon to see middle-age educated men and even
some women walking about in Japan's cities begging for money with signs around their necks that read "Restructured" - that's
Japanese for fired or shuffled off to the "Bone Pile".
Actually the biggest crisis may be the failed Japanese Yen. The Bank of Japan is hard pressed to keep the printing presses running
24 hours a day to offset the growing liquidity crisis. The Yen recently hit about 135 Yen to the US Dollar. This of course is a
major concern to US manufacturers who depend on exports as a chief source of income and the increased competition from a weakened
Yen is resulting in much of the US "Bone Pile" growth. But it is actually much worse than that - this crisis will likely trigger
currency devaluations throughout the Asian community. This may very well result in "Asian Contagion - Part II".
The Japanese have even forsaken the Yen in some quarters. The massive "run for the Gold" is partial evidence of this falling
confidence in the country's currency. In fact a new currency is circulating now. This script is called "Yufu". Actually it is more
of a barter script. People contribute their skills (under the table of course) for Yufu that they can exchange for goods and
services. Japan is in the beginning stages of a growing currency crisis and it is no wonder that the Japanese people are "going for
the Gold" (or platinum, or almost any hard asset).
The Insolvent Japanese banking sector is not a pretty sight either. Here Japanese banks have over $5 Trillion in debt that they are
not willing to (or can't) write off. They are trying to collect on these bad debts. The result is that suicide and bankruptcy rates
are accelerating and Japanese bankers are going so far as to hire armed martial arts experts to collect from some unsavory
characters (such as members of the Japanese mob - Yakuza). The banks are being forced to write off bad loans while the rate of bad
loans are growing even faster. That results in a loss of confidence that leads to even more bad loans (a death spiral).
It appears that it is now up to Koizumi to drum up yet another bailout for Japan's banks (the fifth since 1998). If anyone here
thinks that the US S&L crisis in the 1980's was bad, this Japanese banking crisis makes that look rather insignificant. This crisis
will sink Japan and its economy to the point of total collapse and in the process take many of the world's economies with it. So
what has the Japanese government done? So far they have changed regulations that allow for guaranteeing only the first $75,000 in
time deposits beginning on April Fools Day. Next year this restriction carries over to all Japanese savings deposits. There is a lot
of Yen to steal when the banks collapse.
There is nowhere to run and nowhere to hide for many Japanese. Many Japanese are making the decision to get hard assets like Gold
and Platinum rather than take their chances on a failed government and a failing banking sector. As more Japanese end up on the
growing "Bone Pile" and the Yen becomes worthless they simply do not want to end up as those poor people in Argentina who were lied
to and screwed by their government. People in Japan still have fresh in their memories news reports of survivors of the Kobe
earthquake digging through their ruined homes and pulling out Gold bullion that survived while their currency and possessions burned
in the resulting fires. The growing crisis in Japan's insolvent banking sector and crumbling currency are fanning the flames of a
different fire that threatens to consume the wealth of most Japanese. Therefore it is a foregone conclusion that the "Japanese Gold
Rush" will continue for quite some time to come.
[Japanese gold demand shot up 600% last month. The flight from the Yen appears to be on- FB]
- Black Blade
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http://atimes.com/global-econ/DD10Dj02.html
What really killed Argentina?
By Hugo Salinas Price
MEXICO CITY - "So the Argentine economy has collapsed and social and financial chaos reigns.
We have read a great deal about it, but very few analysts have mentioned the actual and fundamental cause of this disaster. To do
so is too horrifying, for what has destroyed Argentina is the same cause at work all over the world today. Argentina's fate is the
world's fate - and that is too drastic a conclusion for any analyst who wants to be paid for his work. ..."
(Copyright Hugo Salinas Price. This article was first published in the website Moneda de plata www.plata.com.mx)
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These two situations provide something of a guage of near-future conditions in the US.
-- Forrest Bishop Chairman, Institute of Atomic-Scale Engineering www.iase.cc
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