Earthquake, Tsunami, meltdown sounds like triple witching. Currency, Debt and Stock Market sounds like it too. The Japanese currency is melting down, the Stock market got hit with a tsunami and is under water huge and the debt is just an earthquake waiting to happen.
We are hearing about overheated reactors, fuel rods and cooling pools all over the news. This news will diminish as times go on but what will not go away is Japan’s economic meltdown. Greece, a much smaller economy, was in debt about 127% to GDP in 2009 and should be around 150% 2011. Japan will be more than 230% in 2011 and this doesn’t include the massive money needed to clean things up. Yen collapsing, hyperinflation a very real threat – frankly japan should have already melted down ages ago. The disaster, although terrible, may just be the beginning of the high speed train wreck a huge problem for the US. And hey I even hear California is selling Iodine like crazy in case of nuclear Fallout as Jerry Brown has a meltdown of one of the world’s largest economies on his hands too.
Not only has the Japanese stock market all but crashed, the Bank of Japan hoping for a Hail Mary by intervening, their currency is toxic too – hence why the G7 is chocking on it right now. This is all very tragic. But remember this, in the earl 1990’s Japan was experiencing a meltdown and was going to sell some of it US treasuries. The President of the United States called their Prime Minster to plead with them not to. Right! The Baily Bank and Trust. It would be a run on the US Bank for certain – once one starts selling – the rest will follow. Washington Mutual bank all over again.
Japan owns $877 Billion of US debt and China $907 billion – give or take a billion or two. Ahhh now we see – if they are radioactive and dying than so are we. So why does the G7 care about the Yen. Why are the US and many nations lock step with Japan singing Kumbaya around the currency, the Bank of Japan and their stock markets? If Japan gets sicker right now, their economy is already dying of cancer after all, the rest of the world will may lay right down in their respective economic coffins too. Oh but for China and India it won’t be so bad considering their debt to GDP is only 4.7% and 4.8%.
Mark my words – the unnatural – man made disaster will be much worse when it comes home to roost.