Skip to comments.Japan Manufacturing Contracts at Sharpest Rate for 19 Months
Posted on 12/01/2012 2:56:39 PM PST by Kaslin
In Japan things have gone from Grim to Grimmer. The Markit/JMMA Japan Manufacturing PMI™ shows Japanese manufacturing sector contracts at sharpest rate in 19 months.
Output and new orders both continue to decline
Capital goods producers register sharpest falls in production and sales
Inventories and employment cut amid subdued economic outlook
Operating conditions in the Japanese manufacturing sector continued to worsen in November. The deterioration was driven by falls in output, new orders and employment as the economic climate remained difficult. Amid an uncertain outlook, manufacturers also cut inventory levels and lowered purchasing activity.
Investment goods producers also recorded the steepest fall in staffing levels during November. With the consumer and intermediate market groups also registering reductions in employment, a net fall in total manufacturing payroll numbers was recorded for the second month in succession.
Reduced sales and a subdued economic outlook were reported to have led to the reduction in staffing levels in the latest survey period. Similar factors led to declines in inventories and purchasing activity over the month. The fall in stocks of raw materials and semi-manufactured goods was the steepest in over a year-and-a-half, while input buying was pared to the steepest degree since April 2011.Watch Japan's Current Account and the Yen
On November 12, in Japan Plunges Into Deep Recession; GDP Shrinks 3.5% Annualized; Japan Current Account Turns Negative First Time in 30 Years I noted that Japan trade deficit hits record as relations with China poisoned.
Japan Current Account Turns Negative
The trick for Japan is how to finance its national debt, now at a majorly unsustainable 235% of GDP.
Japan was able to do so for years on account of its current account surplus, of which trade is typically the largest component.
You can now kiss that surplus goodbye because Japan Current Account Turns NegativeBug in Search of Windshield
As my friend John Mauldin suggests, Japan is a bug in search of a windshield. I highly doubt Japan can make it to 2022 or even 2017 before it runs into serious issues.
Actually, Japan has extremely serious issues already, it's just that the market is ignoring them for now. If interest rates rise by a mere 2% or so, interest on the national debt will consume 100% of Japanese tax revenue.
Global imbalances are mounting. I suspect within the next couple of years (if not 2013) Japan will resort to the printing press to finance interest on its national debt and the Japanese central bank will start a major currency war with all its trading partners to force down the value of the yen.
Need more stimulus?
The only thing they will be exporting soon is nasty semi-porn anime and dirty U-15 videos.
They also sell soiled panties in vending machines.
How many 3D TVs and Priuses does one need? Flooding the market with cheap electronics and faux environmental marketing to cheapskate liberals is a disaster waiting to happen.
The BOJ is completely out of bullets to compete in the race to deflate that is occurring within central banks now. The half life of their currency injections can now be measured in minutes rather than days.
This is not going to end well folks.
Fuel....Food....shelter....clothes...guns and ammo
I figure I can barter a side of beef for the Priuses...Should I ever want one...
I would have thought the Tsunami would have spurred their economy...
You mean the “Broken Window” example is a FALLACY???!!!!
They need to stick to building giant robots!!!!
Imagine if their built some big ones we could take some giant robots to mussleman land and kick some serious goat pounding rear!
Imagine the barbarians crapping themselves as a Giant robot walks into their village and start stomping on terrorists like the vermin they are!!!
Godzirra! Godzirra! He’s stomping on our factories! Quick, Bob, drive that Volkswagen into him. Maybe he’ll get mad and go to Germany!”
“That didn’t work! Here’s a buck, Bob! Go buy some soiled panties from that vending machine and throw them at him! What? They’re out of soiled panties? Well, what do they have? A Snickers bar? You’re gonna die, Bob.”
>> Yes, they really sell worn panties in vending machines.
Yeah, 25 years ago.
“He’s coming this way, Bob! Throw some soiled shorts at him! No! They’re not in the vending machine. Let me take them off.”
It’s like the old joke. The vending machine stocker’s wife finds a pair of used panties in his delivery van.
“What are these?” she demands holding them up.
“We stock those in the vending machines, honey. Guys buy them all the time. You know guys, kinda kinky.”
“Dodged a bullet there.”
“This is not going to end well folks.”
No, it’s not. The Mayans might end up being right after all.
“Japan will resort to the printing press to finance interest on its national debt and the Japanese central bank will start a major currency war with all its trading partners to force down the value of the yen.”
All the major world currencies being destroyed at once. Weimar on steroids.
Not good. Not good at all.