So good to see something that is obviously credible.
Thank you, Jay.
I really don't yet have a good feel for how this will affect things. However, as a major holder of USTs, Japan will clearly be selling many of them, putting upward pressure on interest rates. This is typically not good for gold, but this is too simplistic a view for it seems likely that Japan and China will be competing for commodities to be used in the building of infrastructure. Commodity inflation should occur, principally in copper which should do very well.
Gold/copper plays like FCX should do well. Lumber, too, as it appears that the Japanese use a lot of it in their buildings.
Inflation is good for gold.
Of course, the first thing to do is determine the extent of the damage which is massive but not well known at this point.
How the Japanese government will finance reconstruction remains to be seen. Comparatively speaking, it is next to Zimbabwe the most indebted government on the planet. Despite the fact that any seismologist could have told the powers-that-be that a catastrophe of this magnitude was possible, even likely, the neat and tidies gorged on debt.
My respect for Japanese sagacity has gone out the window. The combination of potential natural disasters, when combined with bad demographics and horrible public finance meant that a natural disaster could trigger a horrific result. This of course was staring Japanese policy makers in the face.
Same here, however. Not much difference, except we have better demographics. |
