A few days ago it was announced that Japan had indeed fallen back into a recession. This of course came just two weeks after Abe decided to crank QE up to 11 million. The writing has been on the wall for a WHILE now. But apparently economists don’t ever look at the wall.
How is this unexpected? They increased the sales tax by 60%! Japan’s government debt to GDP is over 200%. Government debt to revenues is over 800%. Their adult diaper industry is larger than their baby diaper industry. With an aging and xenophobic population, enormous debt levels, and a poorly run central government this should not be a surprise. It should actually be the most obvious thing in history. The only thing more obvious would be if you traveled back in time to the day before the 1929 crash and called the market top, but even then you may have entered an alternate universe where the 1929 crash actually happens in 1930. The point is, Japan’s situation is dire and above all, obvious. So obvious that I mostly gloss over Japan because there’s not much to say at this point, except keep your eyes peeled on the USDJPY which hit 118 today.