by Bill Holter, Miles Franklin:
Japan’s stock market got crushed over 6% last night and I expected to see some further weakness in our stock market this morning. As I left this morning to go riding the futures were down but not by much…when I got back after the open the Dow was UP!?! Japan is the world’s 2nd or 3rd largest economy and the 2nd largest equity market by market capitalization. I mention this because “they matter.” They “matter” to everything all over the world. I would also like to mention that Japan is more interconnected and “Ponzied” than any other system in the world. Their banks and insurance companies have “cross ownership” of each other and there are “pools” very similar to those back in the 1920′s in the U.S., and we all know how that worked out.
Another minor detail about Japan is that their banks/banking system is THE largest in the world. They dominate spots in the “Top 20″ banks by size globally. They DO matter and no large bank in Japan can go down without taking others with it and …thus the rest of the world. Deny or pooh pooh this statement all you’d like (just like our market is doing today.) When all is said and done, Japan’s interconnected financial Ponzi scheme will come down like all others before it and very possibly could be the spark for the entire financial system coming down.
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