http://english.caixin.com/2012-03-23/100372177_all.html Oz impact? Cheaper Hondas, less mining income? And some wild cards: p.s interesting rebuttal in comments below the article Opinions?
Loss of confidence in the yen = stronger AUD and Loonie. Now this doesn't mean the AUD will necessarily get to USD1.20, but that it will remain at or above parity for the time being. That is a speculative play by the international money players while they sit on the sidelines waiting for the inevitable commodities bust (not soon, still a long way off) at which point the big money will jump ship, back into the laps of the USD and Yen. What other game do they understand?
The problem is with Japan. 1, Population is aging and less young people have to support more elderly 2, Population is shrinking and since the 1990s, dropped below the replacement level. If the current trends hold steady, Japan's current population of 127 million is expected to shrink by 30 million by 2050. 3, Younger Japanese save less then the older generation. 4 Less than 50% of Japan budget comes from revenue, the rest is borrowed for future generation to pay back with interest. 5 Like in the US no end in sight to balance the budget or pay anything back. 6, Debt to GDP is 230% and rising . 7 The Japanese interest rate only can go up from here, but eve on current level Japan spend 25% of the budget on debt servicing consists of interest rate payments and bond redemption.
On the subject of aging population China has a massive aging population with an enormous deficit in young people to go into the workforce because of the 1 child policy. It will be interesting to see what happens over there in the next 20 years
The big difference is China do not have that massive pension and social and health benefit obligation.
