* Japanese exports plunge record 35 percent in December
* China's economy slows sharply in Q4
* Sony to cut more than 2,000 jobs - report
* Yen climbs near 13-½ year high vs dollar
Reuters
The collapse of the consumer economy in the First World nations that bought the cars and TVs is rapidly taking down the production economies of Asia. Although these are the "creditor" nations to the world, their positive balance sheet is totally dependent on exports, which have fallen off a cliff over the last few months. As noted here in threads on shipping and trade, virtually nothing is moving off the docks and inventories are swelling past the ability to store all the stuff.
There really is nothing to do but shutter the doors on the factories, which of course is putting millions of Chinese and Japanese and Korean factory workers out of work. While our unemployment porblems here are clearly bad, countries dependent on their exports from factories are just getting KILLED here.
The Chinese are talking about redirecting their economy internally, however about nobody has suggested a workable plan by which this might be accomplished anytime too soon. Meanwhile, the political situation becomes increasingly more unstable, and the likelihood the Chinese Goobermint can maintain enough control to keep even a local economy running becomes increasingly smaller each day.
Meanwhile, back there on the Consumer side of the equation, the Pound Sterling is just taking a major beating here, and the Brits are pretty much sunk under in a world of debt. Even one of our Best Choice Doomstead Nations, New Zealand is on the brink of Bankruptcy and its getting pretty clear that the international system of trade and finance won't recover anytime too soon. At this point, its become each Nation for itself, and certainly for economies like Britain or Japan or China its far beyond the capacity of the IMF to provide Bailout Loans.
So, my question to the group economic pundits is this: When does the de-coupling start? In order for any individual country to attempt to make sense of their economic system, they have to pull off the general grid here which is unbalanced and pulling everyone down together. Within your country, decoupling is good because you can set your money supply to match whatever your resources are and continue some kind of trade within your country. Its bad for you internationally because you can't use your currency to buy Oil. The only way you might get oil if you have none within the borders of your country is to Barter for it or Steal it.
It would be my guess that the Chinese will be the first ones to bite the bullet and pull off the grid. At some point here they just won't buy debt from the US, and then we have to go off the grid also. With no production and no exports, the positive balance of trade the Chinese have had that supports their economy is gone. Whatever savings they have will be quickly burned up just meeting the day to day bills, its like losing your job and having money in the bank, but your daily costs of maintaining your house drain the savings in just a few weeks or months, depending just how thrifty you were. I cannot see the Chinese surplus remaining high much longer, certainly not high enough to keep loaning money to the US.
I think the next two months is going to see great destabilization of the Asian Goobermints. All over the world, I think you are going to see a wave of Nationalizations of Industries and Banks as each country tries to consolidate and keep their own internal system running to some degree. The G7 is getting together to deal with the Brit problem of the Pound, and the Asian countries no doubt will get together to deal with their export problems. I am betting on a Bretton Woods style conference of all nations sometime in the next year, possibly by the Summer. The edifice they are using now is just toast, and something new has to be put in place. How they will resolve this is anybody's guess, but it will no doubt be quite entertaining.
Reverse Engineer
I'm actually of the opinion now that I might be able to take another trip to Hawaii next year and bring even more kids along for the ride 
Long term prognosis is not good, but I think the military and the slope will hold up for another year as drivers for our local economy. Every day is a blessing though, and regardless of how it plays out I'm at peace with my choices and what I do in this world. I love my job, and I love writing and I can do both for right now. It won't go forever, but for right now I am a very lucky man indeed.
