Japan crisis - the worlds economic outlook?

michaels

I wonder what it will do given the globalised nature of supply chains - for example will the UK Nissan , Toyota and Honda factories be able to carry on running if Japanese components are not available.

bo_drinker

Element47 wrote: »

Once again this thread is not really about Japan but the rest of the world.

The dust has almost settled there I suppose............... !!!!!!, Now how will this affect me mentality has kicked in.

One of the many reasons I don't come on this site.

purch

I am just wondering if Japan will start to cash in assets all around the world to pay for it all, and if they do will this cause a compete collapse of the already unstable fiat currency system?

If Japan did follow that course of action, then the effect on economic stability, and currency stability would be huge.

But they won't.

treliac

This evening's 'Newsnight' BBC2 10.30pm.....

We are also examining the impact the earthquake and tsunami is likely to have on the Japanese economy and in turn on the worldwide recovery.

Generali

I guess it's likely to be positive (or negative depending on your view of rising prices) for materials that Japan will suck in to use for rebuilding, eg steel, copper, energy, concrete etc and for the wages of engineers.

In some respects, once the Japanese get their act together after the immediate 'emergency phase' of this is over, it could well be positive for the worlds economy. One of the problems the world has is that there are 3 massive countries exporting far more than they import (Germany, China and Japan in no particular order) and the rest of us are importing more than we export. This may well mean that Japan starts to import more to rebuild the country. In the short term it's likely to be very negative for the world economy as supply chains are disrupted, production halted and workers across the world spend otherwise productive time surfing the 'net to find out how many people were killed and exactly how flattened the town hit by the tsunami were.

1984ReturnsForReal_2

Bank of Japan injects £165bn in effort to repair economy

......................

julieq

The most important effect goes way beyond Japan. Globally, nuclear power will now be far more difficult to sell to electors. In the absence of renewables in usable mass forms, that implies much more pressure on fossil fuel prices with all that implies. I suspect that China will push on regardless with nuclear projects, but it'll be a hard sell in Europe.

Within Japan itself it's difficult to call, but you have to remember that although catastrophes look horrendous, rebuilding does occur and we're being shown the worst of things rather than the places which are less affected so it's a distorted view.

There's an argument for saying that if funds currently saved in Japan are transferred into becoming economically active, the thrift paradox is reversed and there may be some stimulation. For example the automotive sector must surely benefit from replacement of cars, and that drives a lot of Japanese industry. You'd be amazed how much of the output of other industries - chemicals for example, metals processing etc - is driven from the automotive sector.

The big wildcard is the nuclear situation though. Japan have been underplaying the dangers throughout, but this looks lethally dangerous with the risk of irradiating very large areas of land and the surrounding waters. If that happens then recovery and clean up will be very difficult indeed. The worrying part of this is that the situation is still way out of control and appears to be deteriorating.

vivatifosi

julieq wrote: »

The most important effect goes way beyond Japan. Globally, nuclear power will now be far more difficult to sell to electors.

Good point julieq. I don't know if you're still out in the Far East, but there was a story this morning here that the EU Energy Chief has suggested that Europe should consider whether it can meet its energy needs without nuclear power. Hopefully this is the start of a rational debate "can we afford not to go down the nuclear route" or "what do we need to learn from the Japanese experience" and not timely politicking.

purch

......or timely "kneejerking" !!!

Arcaine

An intersting article from Bloomberg about Japan and the Nuclear Industry there...

http://www.bloomberg.com/news/2011-03-15/debt-tsunami-fights-radiation-for-bigger-risk-commentary-by-william-pesek.html

Just on a side note I live in Swindon, Honda want to put up 3 turbines to be a little greener. The decision has been delayed thanks a large no petition from the residents. (Personally I would insist they put up 3 extra to power local schools and save the council some money). We all want a reliable, clean energy sources, just not near us. We really need to start developing an alernative to destructive non-renewable sources. But we should also be pragmatic, it will not be solved over night and the wheels of industry and the lights at home need to stay on until we are there.