Believe in Japan, It Believes in Itself

It's heart breaking to see what is happening in Japan, especially as the situation seems only to deteriorate. The unfolding high death toll, destruction, food shortages, power outages and threat of a nuclear disaster are now joined by severe weather. Each one is a tough blow on its own, together they are a very heavy weight on the shoulders of the Japanese people.  Japanese friends are describing confusion, deep concerns for family members unheard from, empty store shelves and a growing disbelief in the information provided by the government. Outside of Japan, pundits are predicting an eroding economic situation that will also harm the global economy.  

As always, there are those that see the short-term hardship and believe it to be the be all and end all. Diamond industry observers that expect diamond trade with Japan to decline join them.  

That may be the case in the short term, but not beyond. 

Historically, the Japanese people have always risen from hardships. It's ingrained in the culture. The Japanese central bank has already injected some $281 billion and the interest rate will likely remain low, providing further incentives to borrow and rebuild.  

The nation, and its people, are financially sound, with one of the highest personal savings ratios in the world. The recovery projects to rebuild housing, restore infrastructure and construct new energy facilities, infusing new money into the economic system that will trickle into people’s pockets. 

An RBC research comment claims that, "diamond demand in Japan will be significantly impacted." Consider an alternative prediction: Disasters bring us closer.  

We are far more expressive of our feelings when faced with death and fear, which completely reshuffles our concerns and priorities, putting family and friends ahead of most everything else. The 9/11 attacks are a prime example. More people propose, marry and act more generously with each other, as a result, diamond sales will grow.

In recent months, Japan rediscovered its desire for jewelry and taste for diamonds. As the Japanese start rebuilding their lives, many will want to express and show their love. Don't discount Japan so quickly, it will surely pull itself up by the bootstraps and once again set an example of how it's done.  

The 2011 Holiday Season may seem far away for many in Japan, but by then, it will be a heartfelt, emotional holiday. Many in Japan will step into jewelry stores, looking to express their feelings with a generous and timeless gift.  

If you want to support Japan, don’t hold gloomy predictions for the country.  Instead, see the Japanese people for what they are – strong, resourceful and resilient.

May this be a peaceful weekend.