This is a very serious situation in Japan. Our hearts go out to the Japanese people in their time of need.
However, this could also affect the rest of the globe. Japan has been on the brink of a depression for 20 years and the set-back caused by the earthquake and then the tsunami may be the tipping point for their economy.
More important, the Japanese have taken up the slack from the Chinese who have been pulling back from buying the ever-increasing U.S. Treasury bonds. It’s not the Japanese government that has stepped up its U.S. bond buying but Japanese financial institutions like insurance companies. With insurance claims about to skyrocket from the earthquake/tsunami, these financial institutions will need to raise cash to settle claims and the resultant massive selling of U.S. bonds may also be the tipping point for the world’s largest economy and will have global repercussions at a time when most economies are still weak.
The report below on the nuclear melt-down adds to the Japanese woes.
Japanese Government Confirms Meltdown March 12, 2011 | 2148 GMT
Japan’s Nuclear and Industrial Safety Agency (NISA) said March 12 that the explosion at the Fukushima Daiichi No. 1 nuclear plant could only have been caused by a meltdown of the reactor core, Japanese daily Nikkei reported. This statement seemed somewhat at odds with Japanese Chief Cabinet Secretary Yukio Edano’s comments earlier March 12, in which he said “the walls of the building containing the reactor were destroyed, meaning that the metal container encasing the reactor did not explode.”
NISA’s statement is significant because it is the government agency that reports to the Agency for Natural Resources and Energy within the Ministry of Economy, Trade and Industry. NISA works in conjunction with the Atomic Energy Commission. Its role is to provide oversight to the industry and is responsible for signing off construction of new plants, among other things. It has been criticized for approving nuclear plants on geological fault lines and for an alleged conflict of interest in regulating the nuclear sector. It was NISA that issued the order for the opening of the valve to release pressure — and thus allegedly some radiation — from the Fukushima power plant.
NISA has also overseen the entire government response to the nuclear reactor problems following the Tohoku earthquake and tsunami. It is difficult to determine at this point whether the NISA statement is accurate, as the Nikkei report has not been corroborated by others. It is also not clear from the context whether NISA is stating the conclusions of an official assessment or simply making a statement. However, the Tokyo Electric Power Co. (TEPCO), the operator of the Fukushima nuclear plant, also said that although it had relieved pressure, nevertheless some nuclear fuel had melted and further action was necessary to contain the pressure.
If this report is accurate, it would not be the first time statements by NISA and Edano have diverged. When Edano earlier claimed that radiation levels had fallen at the site after the depressurization efforts, NISA claimed they had risen due to the release of radioactive vapors.
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