Despite the G-7 Intervention, Japanese Banking Crisis is Inevitable

Monday, March 21, 2011
By Paul Martin

BY KEITH FITZ-GERALD, Chief Investment Strategist
Money Morning

The United States and Canada today (Friday) joined other Group of Seven (G-7) nations to intervene as a means of weakening the Japanese yen in an effort to help Japan deal with last week’s catastrophic earthquake and tsunami.
This G-7 intervention is a substantial development, although there are precious few details, since none of the world’s central bankers (a list that includes the U.S. Federal Reserve) have commented on exactly what “intervention” entails. Nor have they identified what currencies will be involved.
I believe the G-7 leaders are underestimating the implications of their actions. For starters, there will be Japanese banking failures – caused by the simple fact that huge numbers of people who lost everything and weren’t insured (and whose places of employment may have been washed away, as well) won’t be able to pay their mortgages, their credit card bills, or their car payments.

The Rest…HERE

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