Tragedy in the Land of the Rising Sun

17 03 2011

The earthquake and tsunami that took place last Friday in Japan has left the country devastated, trying to understand just exactly what the economic impact will be. Economists from Capital Economics said it best, “The recent events in Japan are first and foremost a human tragedy, nonetheless, the markets also need to consider the economic impact.”

The earthquake and flooding from the tsunami caused damage to roads, railways, limited electricity all of which has caused factories to close down. Economists are expecting many factories, including Toyota Motor, Honda Motor, Nissan and Sony to stay closed for a number of weeks. When this occurs, it disrupts the supply chain. So factories in other parts of the world that help assemble a finished product will also be affected due to Japanese factories coming to a halt.

It will be a long journey to recovery, and an expensive one at that. Japan already has debt that doubles their GDP.  Estimates of the total damages run from $35 billion to more than $100 billion.

Want to donate to the Japan Relief effort? See the links below:

American Red Cross

The Salvation Army

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