Japan's Financial Armageddon is Coming in 60 Days?

Is the financial Armageddon coming soon? Many people are now warning that it is inevitable. I agree. It may not be in 60 days, but I think it is coming Autumn 2011. I'm not sure, but things are lining up poorly so I think you had better get prepared. This is a warning.


People should listen to my warnings. I warned people in October of 2008 to buy gold and silver and to stock up on food (click the links for proof). At that time, gold was $724.08 an ounce (today gold is $1562.30) and silver was $9.11 an ounce (today silver stands at $47.40).


If you had taken my advice, you would have easily more than doubled your investment in gold and taken over a 520% profit on silver. It's still not too late to get into gold and silver but a price correction is coming so wait a bit.* There will be no price correction on food. Stock up now, while you can. 


*Note: A few hours after the posting of this article (check the dates and times) the price of silver dropped almost 10%.


After the big Tohoku earthquake and tsunami, when the stores shelves were bare for a week or so (and no one knew at the time how things were going to turn out on the food and water situation) my family was fine; we had 6 months of food and water, enough for 5 people, stocked up and ready to go. When people panicked and ran away from Tokyo or when they were fighting for parking spaces at the local grocery store, or fighting for bottles of water, I only watched and shook my head in disbelief.


How can people be so gullible and foolish? How can people be so negligent and irresponsible not to be prepared?

The repercussions of the Japan earthquake and tsunami followed by the nuclear accident has created shock waves throughout the world. Throw that on top of the soon-to-come collapse of the Euro...

Either preceded or followed by the collapse of the US dollar.... 

A lot of people predicted an economic calamity after the earthquake and tsunami. But, now some are saying it didn't happen. The fact is that the earthquake and tsunami are blips on the screen in the overall picture of the world economy.... But taken together with the information contained in the videos above, and they stat to cause one to consider.


Consider the Euro zone and the US dollar - along with Japan's aging problem and public debt problems - in the context of the repercussions for the business world of the Japan disaster. For a small example of how the Japan calamity is affecting foreign nations and companies, consider the fact that Japanese cars manufacturers have closed many of their plants as they are unable to obtain parts. 


On initial inspection, this doesn't seem to be such a problem. But these plants, and including Japanese plants in the USA, employ tens of thousands of people. Now, what about the satellite businesses that deal with cars? The list is long, but here's two easy ones; Tire makers or service stands? What about other businesses that cater to auto worker employees? How about them? Home manufacturers, clothes makers, shoes manufacturers, the entertainment sector, banks, credit card companies, etc., etc.? 


Now, consider the fact that nearly ever company must file their quarterly business report, well, every quarter. That means that the earthquake occurred on March 11... Let's just use March 30th as an easy calculation... This means that all of these corporations will show the effect of the Japan disaster - added to an already overloaded world economic crisis - and you just might have one more straw added to the camel's back... Could it be the straw that breaks the camel's back?


I don't think so. But throw on the extremely high probability of a Greek, Irish and Portuguese default on public debt and the ground swell rumors now abounding that Spain and Italy are next ( and are "Too big to bail") then you have a serious problem.


Let me give you fair warning again. Especially if you live in Japan: 


1) Store up enough water for at least 2 months (6 months preferable)
2) Fill your bathtub with water every night (if water stops you can use for cleaning)
3) Today or this week, buy at least 2 months of canned food (6 months preferable)
4) It is still not too late! Start saving money every month by buying gold and silver. If you have some savings, take 33% of it out of the bank and buy gold. Take the other 33% and keep it at  safe place at home.


It looks like we are headed for some really rough times. Better be prepared to stay out of the way.


If you want to find the best places to buy gold and silver, search those keywords on this blog's search function. I've warned people so many times up until now, that I'm tired of linking to it over and over.


Will people pay attention this time? If history is any guide, the answer is "No!" 

Three Short News Stories About How Messed Up Japan's Finances Are

Here's three news stories on Japan this morning that just made me roll my eyes. The first one shows how Japan's public debt hit new highs... This causes the incompetents in the Japanese government to panic and try to throw a budget together somehow....


From The Wall Street Journal: 


Japan's outstanding public debt hit a record Y919.151 trillion at the end of last year, the Finance Ministry said Thursday, likely fueling concerns over the nation's fiscal health and adding to a sense of urgency within the government to quickly formulate a tax hike plan. The ministry's quarterly data showed public debt rose 1.1% from the end of September, reaching a level equivalent to 194% of Japan's nominal gross domestic product for the fiscal year ended March 2010. Central government liabilities tracked by the data include government bonds, short-term debts called financial bills and other kinds of borrowed money. The picture of Japan's fiscal house gets even worse if the long-term debt of local governments worth around Y200 trillion is also taken into account.

Writer's rendition of Japanese PM Naoto Kan

Like I've written about numerous times, these idiots in the government never have the idea to cut the budget. All they ever think about is raising taxes. But the people are taxed out already. More taxes are not the answer. Cutting expenditures is and the Japanese people are starting to get fed up with high taxes. There is a movement afoot to do something about them too.


The Economist reports:


It was hardly a "mad-as-hell" moment, but still. On learning on February 6th that he had won a landslide re-election victory as mayor of Nagoya, one of Japan's biggest industrial cities, Takashi Kawamura put on a pair of black rubber boots while a small group of supporters threw buckets of cold water over his head. Hours later, with a nod to America's tax-cutting rebels, Mr Kawamura declared that a kind of tea party had been born in Nagoya. He sat alongside his political ally, Hideaki Omura, who on the same day thrashed his rivals for the governorship of the surrounding prefecture of Aichi, home to Toyota. It was hard to judge how serious they were, not least because, dressed in anoraks, they looked like the Two Ronnies, a 1970s British comedy duo. "This is a citizen's revolution," Mr Omura declared.


Finally, as a result of these problems, and how the government never tables any ideas as to how to cut expenditures and only raise taxes, I predicted how current Japanese prime minister Naoto Kan will be out of office by the end of June.


Bloomberg Reports:

Japanese Prime Minister Naoto Kan's inability to break a stalemate over budget legislation threatens to make him the fifth straight premier to last no more than a year and end efforts to rein in the world's largest public debt. Kan has been unable to persuade opposition lawmakers to agree on financing bills for his record 92.4 trillion yen ($1.1 trillion) budget that begins in April, 44.3 trillion yen of which must be funded by government bonds. Finance Minister Yoshihiko Noda last week said Japan's economy faces "the risk of economic slowdown" if parliament fails to move. Sometimes I get complaints from readers saying that I don't specifically state what Japan's government should cut from their budget... My friend's, there are a million things that could be cut. I would begin with something like a 10% ~ 20% across the board cut. Here's is some information for you. Where should we cut? I think we could cut everything by at least 10% across the board and still be fine (10% probably would only buy us a year or two's time!) Where should we cut? You decide. Have a look:  I searched and found this in English for you. It is highlights of the Japanese budget of 2009 & 2010 from Japan's Ministry of Finance. Especially look at page 2: We can definitely cut military expenditures. According to Wikipedia as of 2007 Japan is #7 in the world for military expenditures.  (We spend more than 0.8% of GDP on the military) Spending in 2010:  ¥47,903,000,000,000 (at ¥80 to the dollar) that's about $58,680,000,000. When we have the US military umbrella and the USA spends more than the rest of the world combined, why is Japan spending all this money? How about cutting that into half? Cut military pensions too Overseas Development? ¥682,000,000,000  that's  $8,350,000,000... Yeah, 15.7 of Japanese are under poverty line according to NY Times but we're throwing money away to other countries. How about cutting that to zero?  Further down below, on the same page, you'll see ¥5,196,800,000,000  ($63,658,000,000) for "miscellaneous." Yes, this is the category that our politicians get into scandals about every year for having geisha parties and lighting up the town. How about cutting all politician's staff and budgets by 40%? I could go on and on. Check top of page 4. A ¥13,000 allowance for every child!? About $160.... Morons! Why don't they just cut our taxes rather than just giving us our money back? Remember when former US president Bush did this crap? A lousy $160 per child? I can get twice that for a kidon the black market! Of course, I am only joking. Too bad this debt problem here is Japan is not a joke. Thanks to News on Japan