Japan is in the grip of the worst natural disaster in its living memory. Thousands of people have lost their homes, and remain without food and water. In the longer term, the reconstruction costs will run into billions. And yet, Japan’s already heavily indebted government has shelled out over £200 billion this week to prop up the stockmarket.
As if it wasn’t enough to be shaken by the earthquake, swamped by the tsunami, and fending off a nuclear meltdown, now the Japanese economy is being trampled by the digital herd. First there was panic selling on the stockmarket, including the dumping of shares in nuclear power and uranium mining. Now there is more considered speculation. Currency traders are betting that investors will need to shift funds back to Japan to finance reconstruction, so the Yen is soaring against the dollar. The spike is serious enough that the government may need to devalue the currency to avoid harming Japan’s exports.
All of this is stupid, counter-productive and cowardly, but we tolerate it because it makes money in the good times, though not for real people of course. Isn’t it time there was some kind of failsafe for this kind of stuff? Some kind of pause button? Why do we continue to allow humanitarian tragedy to be compounded by these scared and greedy people, thousands of miles away and safely behind their computer screens?
Out of all the crazy trading this week, one thing jumped out at me. In the last few days, Burberry‘s value took a nosedive. Japan is one of the company’s biggest markets – so even as survivors were still being pulled from the wreckage, the speculators were placing bets on demand for handbags. Isn’t there something profoundly sick about that?
But then I’m an idealist. I probably shouldn’t be allowed to read the business section.
The Earthbound Report 