Wednesday, February 25, 2009

Japan’s Exports Down 45% Year on Year

There's an old saying, "When the United States sneezes the rest of the world catches a cold."

No better example that this saying still holds are the numbers out today on Japanese exports. Japanese exports fell 45.7 per cent in January, compared with the same month last year, according to the Japanese finance ministry. Exports to Asia sank by 46.7 per cent, the fourth straight month of decline, with shipments to China falling by 45.1 per cent. Clearly, it's an intertwined international economy with the United States exporting monetary inflation and a distorted structure of production.

This will continue as long as the dollar remains an important reserve currency (a dwindling status day-by-day) and countries like China prop up the dollar against their currencies. The Chinese support of the dollar resulted in massive Chinese internal money printing, thus the same distortions that took place in the U.S. took place in China. And Japan, as a result of the type of goods the U.S. and China were demanding has been severely impacted by supplying those goods.

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