It really seems like at this point Japan is in deep trouble. I'm wondering what the consequences of this are? 1) Japanese tourism will be shot, for years. 2) Japanese food production is deeply in question. This means that more food will be imported from abroad, which also means that food prices will increase. If more money is spent on food, then that means less money will be spent elsewhere, meaning that GDP will be hurt. Now that the disaster is raised to level 7, will people be less apt to buy Japanese products? If the economy goes into recession, then what sort of dominoes will fall? 1) Will a Japanese recession drag down the US economy? 2) Will this finally be the point where Japan's 200% Debt-to-GDP finally catch up with them? To me, it really seems like Japan could be the domino that takes down the rest of the world's economies. I don't know anyone who will be willing to travel to Tokyo with this radiation catastrophe. That already is going to be a huge hit to the economy. If the economy really does take a nosedive, then maybe Japan's day of reckoning in terms of their debt will finally catch up with them, and it could cause interest rates to skyrocket, and then maybe it will cause "contagion" to all other countries that hold a lot of debt, ourselves included. If my thesis is correct, what is the best investment? Gold? Real estate? Is this a deflationary or inflationary situation?
That is completely irrational. The radiation level in Tokyo is less than the average natural background radiation in Europe and the US. See my post here: http://www.elitetrader.com/vb/showthread.php?s=&postid=3149621#post3149621 There is no radiation catastrophe in Tokyo, nor anything like one. There are problems in Fukushima prefecture with contamination, but the extent is still unclear.
I agree with that part, but I also think people will be hesitant at best to visit Tokyo or other parts of Japan because of still many aftershocks (and a bad one could affect power, affect flights back out, etc.). Also, just the thought that going to Japan right now means that they have to deal with more people when they already are having issues with fuel, food, etc. And if any of what I'm saying is wrong, at least that's how it's being reported. I would think of course this won't last forever, but I would certainly think this would hurt tourism in Japan for 3-6 months at least and possibly years.
It may be irrational, but it's how people feel. I live in California, thousands of miles away, and people still ask me if California is safe to visit. If tourism is dependent on regular people deciding to spend their hard-earned money to visit a country, and if regular people are nervous enough to think that California has the potential for radiation problems, then most certainly regular people will be afraid to go to a city that is only 150 miles away from a radiation catastrophe. Sorry, I could have worded that better. I didn't mean that Tokyo had a radiation catastrophe, I meant that the Fukushima disaster is most certainly a catastrophe. It has been raised to level 7, which means it is on par with Chernobyl. To put it in other words, Fukushima is just about as bad a radiation disaster as the world has ever seen. Would people rather go to Tokyo, which is 150 miles away from this, or would they rather spend their money in China or Australia? I mean think, tourists need to eat. Do you think the vast majority of tourists will feel comfortable enough to eat the rice, the sushi, or the vegetables? Probably not, especially if they don't know where the food came from and if they can't speak the language. As long as there is radiation problems making the headlines, I think Japan tourism will be dead-in-the-water, and this could be for several years.
A new troubling concern is the latest 7.1 earthquake which was further down the coast, only 100 km from Tokyo. The 9.0 quake was preceded by a 7.1 earthquake. The plates north and south of the 9.0 may be "loaded" which could result in another epic quake. Rennick Sagan out
And Alaska Oregon Washington California is on the other side of the tectonic plate known as the "Ring of Fire". Wonder what's next?!
Japan does not rely upon tourism to sustain it's economy. The country relies upon exports. Maybe you have heard of Toyota? Canon, Fujitsu, Seiko-Epson, Nissan, Honda, or Sony to name a few? They manufacture shit and then sell it overseas at a profit. Japan is not Hawaii or Thailand. The beaches are not beautiful and the weather is not nice. It is hot and humid in the summer with mosquitoes and typhoons, and it is expensive. While JPY has weakened recently, it is still closer to all time highs rather than lows and has been strong since the beginning of the US financial crisis back in late 2007.
Japan's tourism industry is about 2.2% of the GDP. This is on par with the automobile industry at 2.3%. This is as of 2000, but I don't imagine it to have changed that drastically in 10 years. http://www.oecd.org/dataoecd/43/48/33649824.pdf
Have many times have you come to Tokyo for tourism or even thought about it? You wanna pay 85 yen per USD to visit Tokyo? Where would you even go? Was Japan more dominant in the auto industry in 2000 or in 2011? What was the exchange rate in 2000? Was it more expensive now or then to visit Japan? <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3150881">
Maybe you should educate yourself a bit... You cannot judge radiation exclusively by the levels. You have to consider what particle causes it. It makes a big difference, if it is caused by iodine, caesium or plutonium, if it gets into your body. The consequencies are not the same at all. Also, the real problem, radiation levels and their severity are being scandalously played down alll the time. The real mass of the disaster is only getting aknowledged much much later than they are known to the authorities. Watch this video. Based on the statistics of the Chernobyl experience, one can count with about 400'000 cancer cases in the near future in Japan, as a direct consequence of the "accident" Though this might seem to be a tiny number to you... http://rt.com/news/radiation-japan-water-fukushima/