Just think about what happened after Hurricane Katrina. Did the economy of New Orleans bounce right back? No, there are some areas of New Orleans today that still look like war zones.Well, this disaster is much worse.The truth is that this is going to be one of the defining moments in the history of Japan. Hundreds of miles along the coast of Japan have been absolutely devastated.
Authorities are finding it difficult to even get food and water into some areas at this point.Even before this great tragedy Japan was one of the nations that was on the verge of a national economic collapse. Their economy had been in the doldrums for over a decade and their national debt was well over 200 percent of GDP. Now the Japanese economy has experienced a shock from which it may never truly recover.The Bank of Japan is already flooding the Japanese economy with new yen, and so we may indeed see some impressive “economic growth” statistics at the end of the year.
But just because lots more yen are being passed around does not mean that the Japanese economy is in better shape.The truth is that a tsunami of yen is not going to undo the damage that the tsunami of water did. A massive amount of Japanese wealth was wiped out by this disaster. An economy that was already teetering on the brink is now very likely going to plunge into oblivion.It is fine to be optimistic, but the cold, hard reality of the situation is that this is a knockout blow for the Japanese economy. The extent of the devastation is just too great. This truly is a complete and total nightmare.