Freedom Lawyers of America

Japanese banks are in such poor financial health that even the
Governor of Tokyo - the equivalent of the Mayor of New York City - is
threatening to pull Tokyo's $14 billion out of Japanese banks. He wants to
move it to foreign banks to get it out of danger!

What a slap in the face! This is mind-boggling news. No wonder the
Nikkei just plunged to a 19-year low last night. It smashed through the
9600 support level I told you about and plunged straight to 9217 - on its
way to 7000, on this leg alone.

Turn this crisis into some of the most astonishing profits
imaginable. A modest $8,000 in put options on select Japan indexes and
stocks could explode into profits of $49,380. And this is just the beginning.

Tokyo Governor Shintaro Ishihara:
Get Tokyo's money out of Japanese banks!

It is mind-boggling that the Governor of Tokyo would say something
like this. It's like Michael Bloomberg, Mayor of New York City, saying US
banks are so unsafe that we have to yank the City's money out and move it
into Japanese banks. You can't even describe the impact that would have.

But the Japanese banks are in such terrible condition, I can't blame
him. I would do the same thing. The Japanese banks are drowning in loans
gone bad. Just recently, some of the major Japanese banks wrote off $21.5
billion in bad debts -- but so many more loans went bad that they ended up
with more bad loans than they started with.

And it's no wonder! More than 1,700 Japanese companies went bust in
July alone. And that's just the beginning because Japanese retail sales --
the driving force in any economy
-- are falling, down a whopping 5.7% in July compared to last year. That's
the 51st consecutive decline and one of the worst declines ever.

Imagine if your business' sales went down 51 months in a row.
Jeepers, I'd close the doors, go home and cry.

The Ginza shopping district in Tokyo is like a ghost town. Huge
stores are nearly empty of customers. Other, smaller retail shops lining
the Ginza are boarded up. On the famed Ginza subway line -- with its main
stop in the heart of the shopping district -- you can almost hear a pin drop.

It's already spread from the retailers to construction companies and
manufacturers. Huge Dai Nippon Construction went belly-up in July with $2.3
billion in debt ... giant rope maker Tesac Corp. -- $334 million in debt
... and machine tool maker Hitachi Seiki -- bust with $423 million in debt.

It's no surprise to me that ...

The Nikkei just crashed last night to a 19-year low. The next leg down in
Japan's stock market has begun. The rout is on!

Under this mountain of bad news, the critical support in the Nikkei
at 9600 -- which I told you about -- cracked. It's gone.

Now, I expect the Nikkei to fall to 9000, perhaps bounce a bit, and
then slice through it like a knife through hot butter. Then, it's going to
melt away to 8600, 7600, and even down to 7000 and lower!

The Japan crisis is rolling like a tsunami across the globe

Japan is the largest or second largest trading partner of nearly
every significant East Asian country, including China, Taiwan, Thailand,
Indonesia (the fourth most populous nation in the world), Korea, and the
Philippines. So Japan's troubles are pouring over onto them.

There's a civil war in Indonesia ... a terrorist rebellion in the
Philippines ... and political sackings in Thailand. Stock markets are
getting creamed in Taiwan, Malaysia, the Philippines, and Hong Kong. These
countries were just barely recouping from the 1997-98 depression. And now,
their largest trading partner is going into collapse. It's devastating.

Japan's troubles are even beginning to spill over to Europe.
Unemployment is running 50% higher than in the US. Meanwhile, consumer
confidence is crashing through the floor and a rally in the euro is killing
exports. And the opportunities in Europe are just as leveraged as those in
Asia.

The Asian crises of 1997 and '98 were just the early tremors of the
earthquake that's on its way now. Back then, the US was strong enough to
support the whole world. Not so today. The US is in its own heap of
trouble. There is no economic power on Earth that can stop a global
economic collapse.

Instead of being rescued by the government, Japanese banks are being
abandoned. And these collapsing banks will have to be liquidated, setting
off a new chain reaction of corporate failures and massive layoffs. Huge
multinational companies that used to dominate the world economy are simply
going to go belly-up. Kaput. Gone.


Sincerely,
Larry Edelson, Co-Editor