Japan Devastated; Economic Impact?
Briefing: On March 11, 2011, Northeastern Japan was struck by a massive 9.0 magnitude earthquake. It was followed by a devastating tsunami with waves up to 10-meters high. The death toll as of 5:39 am on March 13, 2011, was 801 people.
With a magnitude of 9.0, this was unfortunately the most powerful earthquake their country has ever witnessed. Several cities have been devastated, families separated, and military efforts are now racing against the clock searching for survivors. To make matters worse, a nuclear threat is now present due to an explosion at one of their nuclear plants.
Restoration and relief efforts will indefinitely take a toll on Japan’s economy. However, if there is one country other than the U.S. that can handle such a natural disaster it is certainly Japan. Japan is a first world country and considered to have one of the top 3 economies in the world. Will the numerous countries dependent on Japan feel the economic impact of this earthquake despite the strength of Japan’s economy?
More importantly let’s talk about the impact on the U.S. economy. Japan, second only to China, owns more than $880 billion of U.S. treasury debt. U.S. stocks immediately fell and bonds rose following Japan’s earthquake; but several economists and CEO’s think the impact will be minimal. Uri Landesman, a managing general partner of a New York hedge fund who helps control roughly $900 million, had this to say about the impact of Japan’s earthquake.
“The market is digesting the earthquake in Japan, which is a human tragedy but probably won’t have a big financial impact. The global economy is recovering on balance, but it’s very fragile as we see this week and the market is more event-driven right now.”
The jobs that will be created for the reconstruction and rebuilding of Japan is one (long term) benefit that will result from this unfortunate earthquake, but its hard to envision Japan’s revival in the midst of their worst crisis since World War II.
Do you agree or disagree that the economic impact of Japan’s earthquake will be minimal? The $880+ billion that Japan holds of U.S. treasury debt certainly can’t be overlooked in the midst of their unfortunate natural disaster. Do you think this fact has any influence on America’s willingness to aid Japan in any and every way possible? Your Political Voice is Important.
Whether Haiti or Japan, humanity is vital everywhere and I’m sure President Obama has and will continue to respond accordingly. G
The Post and Courier http://t.co/JNIQHdr