Chris Martenson

The economic impact of the earthquake, tsunami, and ongoing Fukushima disaster on Japan’s economy, that is.

Of course, that’s not much of a surprise to readers here, but it will definitely be creeping out into the broader markets over time, and should be fully recognized in another two months or so.

The economic minister of Japan, not usually given to anything other than very measured statements, has come out with some rather bold pronouncements, including the idea that Japan may have difficulty financing all of the costs due to an already too-high level of debt.

Here’s the story:

The term “black swan,” as coined by Nassim Taleb, refers to an unusual event that nobody was expecting because such an event had never happened before. Until a black swan has been seen, they simply don’t exist; their probability is zero.

We are now in the midst of exactly what we might predict would happen when a world accustomed to sufficient net energy to drive its processes runs short of that surplus. This is our ultimate black swan.

Trained and raised in a world of ethereal numbers and ideas, today’s economists simply lack the proper framework to understand that all of the ‘rules’ they learned about monetary theory, interest rates, debt accumulation and all the rest, were not actually rules, they were temporary conditions permitted by abundant net free energy.

Brent crude oil at $124/bbl is telling us something. While the unrest in the MENA region is certainly driving some of the price gain, it is important to note that the price of Brent crude has been climbing more or less steadily since July of 2010, when it was at ~$80/bbl.

Saudi Arabia has said many times that it has lots of spare capacity and can easily fill the gap left by Libya’s temporary (or perhaps prolonged) departure. There are two problems with this view.

On Friday, March 11, 2011, at 2:46 p.m. Tokyo time, an earthquake measuring 9.0 on the Richter scale struck, sending shockwaves through the earth’s crust and devastating walls of water into helpless coastal towns less than ten minutes later.

Within hours, it was immediately apparent that a nuclear complex had been mortally stricken, a combination of extremely rare natural circumstances and insufficient design parameters working together to first cripple and then ruin the plants.