Japan; top candidate to be the next black swan?

Posted on 7th March 2012 by Trevor Reynolds in Uncategorized

Here are the elements of difficulty for Japan, each one serving to reduce their economic and financial stability:

The total shutdown of all 54 nuclear plants, leading to an energy insufficiency

Japan’s trade deficit in negative territory for the first time in decades, driven largely by energy imports

A budget deficitthat is now 56% larger than revenues (!!)

Total debt standing at a whopping 235% of GDP

A recession shrinking Japan’s economy at an annual rate of 2.3%

This will lead to renewed efforts to debase the yen and we will see 100 vs the $ again. Perhaps an overshoot like in 1998, 79 then back to 147 . . .

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