Japan earthquake rocks US economy...

[Gob]

Despite being in, or close to, recession for two decades, Japan still has a lot of clout in the global financial system.

In fact, it's the biggest lender to other countries, especially the US.

The weird thing is it's also the biggest borrower - from itself.

Japan's government debt-to-GDP ratio of 225 per cent is worse by far than any other advanced country, another reason to suspect a prolonged slump in household and business spending since it is obvious taxes will rise.

By the way, the reason Japan can lend to others is because it also runs a huge trade surplus with them, which is second only to China's.

But the Japanese are already pulling money back home, which could precipitate the long-feared crash in bond prices in the US.

This would drive up interest rates in the US, which would choke off its recovery and could even, gulp, create a GFC 2, where banks are starved of funds.

Already the yen is soaring, which is odd considering the problems Japan faces. But the higher it goes, the worse it will be for the Japanese economy and the shakier global sharemarkets will be

http://www.smh.com.au/money/investing/b ... 1c1a0.html

[@meric@nwom@n]

Did steve post this?

[Gob]

Not yet.

[rubato]

The interruption in the supply of high-tech goods from Japan has already been a huge boost to many US businesses, including mine. A related division in my company sells ultra-high purity metals, tantalum, copper, aluminum, titanium, molybdenum, gold, used to make chips, displays &c and we pulled out and shipped display items back to be melted down and re-cast into products to meet demand.

$$$

yrs,
rubato

[dgs49]

The HI-larious thing is that some economists - even Nobel Prize winners whose name we won't mention - have intimated that the economic activity necessitated by these twin calamaties will be good for Japan's economy, thus proving that the broken window fallacy lives on, even in the minds of those who should know better.

Indeed this very same august economist has been shrieking for months that the U.S. is being too timid at spending borrowed, worthless Gub'mint money to spur the economy.

Where can we sign up for our own earthquake?

[oldr_n_wsr]

Where can we sign up for our own earthquake?

Sit tight
Hurricane and tornado seasons are only a few months away.