Japan will have to borrow enormous sums of money to rebuild their economy. This will boost their local economy.
They cannot raise the debt from external borrowings, as they are borrowing localy at 0.25% in the domestic market.
At that rate no body will lend to the japanese. So they will do 2 things. print money and also sell investments across various markets.
Governments across the world I suspect will work in tandem to allow a rational and smooth manner so that there is no panic on Monday, tuesday or wednesday.
But in the next 12 months markets are definitley down.
The printing of currency is going to debase the Japanese economy, pushing up its economy significantly as it will become very competitive.
If the Chinese devalue their currency I dont know what is going to happen.
The Japs have American backing to the hilt. So it looks like a massive trade war between the Japs and Chinese.
What will the effect of a devaluation of currency be on the Chinese economy.
The Indian economy will be okay, but the markets will not be. Hot money is going to move to the Japanese markets.
Edited by barla - 12/Mar/2011 at 7:58pm
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