After weeks of saying they were getting everything under control, Japan has raised the severity of the nuclear crisis to level seven, putting it on par with Chernobyl. According to the International Atomic Energy Agency, level seven disasters involve a major release of radiation with widespread health and environmental effects.
Up until now, the Japanese governemtn had talked it down, telling the world that the nuclear fallout was no more than a five, putting it on the same level as Three Mile Island. This is a lot worse. It's a meltdown.
The alarming part, as Bloomberg reveals, is that some towns in Japan will never recover. Almost 28,000 people are dead or missing and 150,000 are homeless in the northern town of Tohoku, where 25 percent of the population is 65 or older and where there are twice the number job seekers to jobs.
The big question is whether Japan will recover. The disaster has struck a country already mired in its second decade of stagnation and deflation. Japan's national debt is twice the size of gross domestic product. All this has been created by an ageing population which has generated soaring welfare costs and falling revenue with fewer people working.
When that happens to the world's third biggest economy, the global economy will suffer.