JAPAN DISASTER MAY HURT WORLD ECONOMY
Ben White
Politico, March 16, 2011
The economic fallout on Japan and the rest of the world in the wake of last week’s devastating earthquake and tsunami is only beginning to emerge.
DBS Bank of Singapore has estimated that the disaster will cost the Japanese economy at least $100 billion — about 2 percent of the nation’s annual gross domestic product — because of shuttered automobile and electronics plants and other disruptions. Any significant worsening of radiation releases from the damaged Fukushima Daiichi nuclear plant could send that estimate skyrocketing.
Still, rebuilding, as painful as it is in human terms, often adds to GDP because of massive construction spending.
A larger problem for Japan and the rest of the world could be big additions to the island nation’s massive debt as the government pumps cash into the system to reassure tumbling markets and finance rebuilding.
(...) [artículo aquí]
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BOJ has already expanded their QE program from 5 to 10 Trillion Yen (120billion), to have the scale of QE 2 in the US, they need to implement the full size 30 Trillion Yen. As the government already indebted up to 200% of GDP, they are treading a fine line going forward. Japanese corporate, government and individuals own up to 850 billion worth US Treasuries. If they need to dip into their savings for reconstruction. Keep an eye for the yield curve on US debts.
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