How The Japan Calamity Could Affect The Gold And Silver Market

How The Japan Calamity Could Affect The Gold And Silver Market

Japanese officials have said that the recent devastation from the earthquake and tsunami is the worst since World War II. From the pictures and videos it certainly appears to look more like war type destruction. The radiation from the nuclear plants in the upcoming weeks will only add to the tragedy. Once any sense of normalcy begins, the question is who will pay for the rebuilding of the Japanese infrastructure?At first glance the rebuilding process in Japan would seem to only concern Japan and perhaps its neighbors. When we look the global economy and how intertwined debt and the money supply, things could get more interesting. Much has been talked about the problem European countries and their debt, including; Portugal, Ireland, Greece, etc. Months ago it was Japan that purchased a great deal of European bonds and its debt. Now that Japan has its own rebuilding issues, will Japan dump some of the bonds as it tries to raise its own capital to rebuild?Right now, Japan is the second largest foreign holder of U.S. government debt. Japan holds about 882 billion in US Treasury Bonds and they are very likely going to need to liquidate much of that to help finance its rebuilding process of their country. It is very apparent that Japan is in no position to purchase any more US Debt. So the question is, where is the U.S. going to come up with the trillion and a half dollars it needs to borrow each year? What about Europe and their debt?Before that disaster in Japan there was a movement away from U.S. Government debt. So as Japan tries to regroup and deal with its rebuilding a major player is taken away from helping the U.S. finance its debt. This leaves the Federal Reserve to finance even more of the U.S. Debt burdon. There has been a great deal of speculation about whether "quantitative easing" will be extended past June or not. Whatever you want to call it "quantitative easing" or not, the fact is that the Federal Reserve is going to have to continue to "buy" most new U.S. government debt or the system will crash.This is all of course highly inflationary. Even before the Japanese calamity, all commodities have been soaring from food, oil and gold and silver. In times of trouble in the past, the world would look to the U.S. Dollar for stability and as a safe haven. With global debt rapidly expanding and the U.S. running out of good options, gold and silver will emerge as the "true currency".The global economy already is in big trouble. Gold and silver has been in a strong bull market for over a decade now, but with what is transpiring in global debt, the real rise is just getting started. As more of the public catches the vision of gold and silver as the true safe haven, supply will decrease and prices will dramatically climb upward. Be sure to get your hands on physical gold and silver today before the next financial earthquake hits.

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