muses of the moment

May 31, 2011

Starting to see the Japan impact

Filed under: Long term investing — totallygroovygirlfriday @ 9:23 am

As groovygirl has stated before, Japan was the third largest economy in the world and a major player in the “just-in-time” global supply chain. American business will soon be using the word resilience in the first paragraph of their annual report instead of profit. One, because the economy has taken another turn and there is no profit to be had. And two, if you don’t have a product, there is no possibility for profit.

Click here for zerohedge’s post about Japanese car exports dropping 68% in the month of April. That is a major impact on world GDP.

And while this would be the ideal environment for US carmakers to grab market share, the fact that many are missing critical Made in Japan components in their supply chain means that there is a broad-based supply drop.

Ah, the fallacy of the Western system of production. Soon, everyone will learn the hard way.

Many more downgrades of Japan the last few weeks. What was their first clue, the shutdown of reliable electricity to major areas of the country or the continued release of nuclear radiation?

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