The recent natural disaster that hit Japan took everyone by surprise and the country seems to find it difficult to put itself together. The earthquakes and tsunami left hundreds dead and as many homeless. The consequences of the disaster will also have a considerable impact on the world's economy, and they begin to be visible already. What does such an event mean for the economy?
As we have mentioned about the shortage of electricity and the nuclear radiation wave, we must add that if you have noticed a slight rise in prices at the pump, this is also due to the disasters from Japan. Up until recently, Japan was the principal nuclear power, advocating for it as well. However, the explosion of two reactors at the Fukushima plant and the spreading of nuclear radiations have changed the global point of view, who fears now nuclear plants. That is why the demand for oil increased and with it, its price.
However, these events can help Japan's economy on a medium long term. How? It has been proved that one of the reasons of the 90s crisis was the low domestic spending. In consequence, every time the government is obliged to spend more, the economy recovers and starts even to blossom. The buildings and infrastructure destroyed by the tsunami and the earthquake will have to be rebuilt, so the government will have to invest a lot in these sectors, which will lead to economic growth. Of course it would have been desirable to obtain this growth without the devastating effects of a natural disaster...
The oil market has also been affected and it has been noticed that the price of oil has increased. This has, of course, to do with the incidents in North Africa, but with the tsunami in Japan as well. Global attention is focused on the struggle to avoid a potential nuclear explosion at the Fukushima plant, and both this and the recent events have discredited nuclear power globally, which translates in a higher demand for oil. More demand, higher prices, and we will soon see that at the pump.
The following few years will be difficult for Japan, and maybe for the rest of the world, and investments will maybe change their pattern. but a good side of what happened in Japan is the fact that people will bind together and help each other. As for the economy, for measures of safety in this unstable society, successful investors and economists suggest we should invest in safer commodities, like gold, because its price is never affected by the economic mutations.
As we have mentioned about the shortage of electricity and the nuclear radiation wave, we must add that if you have noticed a slight rise in prices at the pump, this is also due to the disasters from Japan. Up until recently, Japan was the principal nuclear power, advocating for it as well. However, the explosion of two reactors at the Fukushima plant and the spreading of nuclear radiations have changed the global point of view, who fears now nuclear plants. That is why the demand for oil increased and with it, its price.
However, these events can help Japan's economy on a medium long term. How? It has been proved that one of the reasons of the 90s crisis was the low domestic spending. In consequence, every time the government is obliged to spend more, the economy recovers and starts even to blossom. The buildings and infrastructure destroyed by the tsunami and the earthquake will have to be rebuilt, so the government will have to invest a lot in these sectors, which will lead to economic growth. Of course it would have been desirable to obtain this growth without the devastating effects of a natural disaster...
The oil market has also been affected and it has been noticed that the price of oil has increased. This has, of course, to do with the incidents in North Africa, but with the tsunami in Japan as well. Global attention is focused on the struggle to avoid a potential nuclear explosion at the Fukushima plant, and both this and the recent events have discredited nuclear power globally, which translates in a higher demand for oil. More demand, higher prices, and we will soon see that at the pump.
The following few years will be difficult for Japan, and maybe for the rest of the world, and investments will maybe change their pattern. but a good side of what happened in Japan is the fact that people will bind together and help each other. As for the economy, for measures of safety in this unstable society, successful investors and economists suggest we should invest in safer commodities, like gold, because its price is never affected by the economic mutations.
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