Japan's earthquake will cause a global financial aftershock

[Playinghardball]

Source: Guardian.co.uk

The cost of insurance and rebuilding could cause global markets to falter – and the Japanese economy to boom

In 1923, when a strong earthquake destroyed most of Tokyo, Japan suffered a crippling economic downturn that may have hastened the onset of military rule. Yet financial markets around the world barely shrugged.

Ninety years on, Japanese cash plays a crucial role in global bond and stock markets. Despite two decades of stagnant growth on home turf, Japan is the second largest foreign owner of US government securities, with nearly $900bn of America's public debt. This time it could be the rest of the world that takes a financial hit while the Japanese economy booms.

To understand how this could happen it is necessary to follow the Japanese money. Savings by individuals and money held by Japanese insurers and financial institutions amounts to trillions of dollars in cash, much of which makes its way on to world securities markets. When natural disasters happen in Japan, individuals and companies need this cash to rebuild, and insurance companies need it for payouts.

Read more at:http://www.guardian.co.uk/commentisfree/2011/mar/15/japan-earthquake-global-markets

[xchrom]

1. i think the 'establishment' will step in with estoric measures

to keep that from happening -- for now.

[snappyturtle]

2. Trickle down....shutting down (for now) Suburu plant in Lafayette, IN.

That's 3500 jobs.