Investors who pay attention to Japan’s looming election can expect to be well-rewarded for their time.  Normally, we confess, Japanese elections don’t matter much, because the same guys always win. However, this one – set for Aug. 30 – looks different: It may actually bring about the first real change in Japan’s government in 55 years. That’s important.

The investment outlook for Japan is pretty grim right now. The world’s No. 2 economy saw its gross domestic product (GDP) decline by 4% in the first quarter – the equivalent of 15.2% annualized decline, and the worst showing in more than 50 years.

Japan’s Cabinet Office said today (Wednesday) that economic output fell to its worst levels ever, tumbling an annualized 15.2% in the first quarter, as the worst recession in 60 years hammered exports and consumer demand.

Anyone who has ever visited Japan knows it to be a country where everything works beautifully – and with great efficiency. Right now, however, it’s clear that something has gone horribly wrong there.

Governments are hosing down the markets with bailout money. Central banks, meanwhile, are making sure the cost of borrowing is as close to zero as possible. We smell another bubble in the making…and another inevitable crash. Talk about priming the pump for the next bout of excessive exuberance.