Forget The Distractions

It has been a busy March, no one will argue that.

Libya and Japan happening side by side has made for a nearly impossible to navigate landscape. Everyone’s at risk of taking damage here. However, hopefully things will abruptly settle down next week.

I definitely didn’t believe that the U.N. would actually move against Libya. However, with Qaddafi busy crushing the remains of the opposition, it’s not much of a move. Unless Qaddafi’s forces are completely dependent on air strikes, well…let’s just say they only have one town left.

Maybe Libyans will pull an Iraq on Qaddafi, effectively turning the country into a guerilla nation?

Meanwhile, the U.N. nuclear watchdog group raised the warning level of the Japanese nuclear situation today to 5, which I guess means core damage and potential long term consequences. While I don’t want to minimalize the seriousness of this, for the Japanese, in hindsight I think the bigger issue was the damage caused by the tsunami, not some radiation.

Just as an observation, people tend to overestimate the damage from small, complicated things, and ignore the big issues dangling in front of their faces. Ignore the nuclear issue, and you’ll see the U.N. scrambling to devalue the Yen, as the world needs the Japanese to be fine almost as much as Japan does.

U.S. debt yields spiking is bad news for just about everyone right now. I could see global markets pull back viciously if anything happens to the ability of the U.S. to raise money. Keep in mind, most of the world’s nations are holding our notes, and they all hold the dollar as reserves. U.S. credit speculation is not a headache anyone can afford right now, as it would flesh alive currency markets and governments alike. The resulting austerity and loss could in turn flesh consumers. Which in turn fleshes business. Even precious metals may take a temporary set back, as people scramble to settle debts (although that space would likely prevail).

Watch the communications among global leaders as they try to sort out a deal that doesn’t involve Japan selling treasuries. Ignore the rest of the headlines.