The world seemed to hold its breath yesterday. People watched videos of the tsunami…of the earthquake…of the nuclear reactors. Japan’s nuclear reactors were on the verge of a meltdown.The answer to DR's original question: no one will buy the bonds Japan needs to sell. Japan will have little alternative except to print money. The issue is that the world is awash in debt and Japan more so than most countries. The scale of the earthquake, tsunami, and nuclear disaster is such that it might unmask the face saving that they've been doing for the past generation by issuing more debt. With government debt twice as high as GDP and a chunk of that GDP either destroyed or idled, it seems they have some introspection ahead of them. For comparison, US debt is almost as large as our GDP.
Please donate to the relief effort in Japan.