[Novus]

$this->bbcode_second_pass_quote('Novus', 'T')he nuclear ordeal isn't over yet.

[eXpat]

I believe it has
Has The Tsunami In Japan Destroyed The Japanese Economy?
$this->bbcode_second_pass_quote('', 'T')he truth is that the economy of Japan was already deeply struggling before this disaster.

The national debt of Japan is now well over 200% of GDP and there seems to be no doubt that they will need to borrow massive amounts of money to deal with the aftermath of this crisis.

Up until now the Japanese government has been able to borrow money at ultra-low interest rates of around 1.30 percent for 10-year bonds, drawing on a huge pool of savings from its own citizens.

But in light of what has just happened, will the citizens of Japan still have enough resources to continue to fund the rampant spending of the Japanese government?

At this point, it is estimated that this gigantic mountain of debt breaks down to 7.5 million yen for every single citizen of Japan.

Politicians in Japan have been pledging for years to do something about all of this debt, but nobody has been able to make much progress.

Even before this disaster, the major credit rating agencies were warning that they may have to downgrade Japanese government debt. The earthquake and the tsunami are certainly not going to make the Japanese even more credit-worthy.

Hideo Kumano, the chief economist at Dai-ichi Life Research Institute, has said that a "tipping point" will come when world financial markets finally recognize that the government of Japan simply cannot afford to service its debt any longer....

"It's hard to predict when the bond market might collapse, but it would happen when the market judges that Japan's ability to finance its debt is not sustainable anymore."

Is the massive tsunami that just hit Japan such a tipping point?

Other countries such as Greece and Ireland would have already collapsed if it had not been for the massive international bailouts that they received.

So who is going to bail Japan out?

This could potentially be one of the greatest economic disasters that the world has seen since World War 2.

With the world already on the verge of a major financial collapse, this is the last thing that world financial markets needed.

In fact, much of the rest of the world had been hoping that an influx of capital from Japan would help to stabilize things.

For example, Japanese insurance companies had recently announced that they were planning on buying up lots of European sovereign debt, but now obviously those plans are on hold. As a result of this disaster, Japanese insurance companies will be forced to sell off assets like crazy in order to pay settlements. But as Zero Hedge is correctly pointing out, without Japanese financial institutions stepping in to soak up Eurozone bonds this is going to make the European sovereign debt crisis even worse.

[dblk]

$this->bbcode_second_pass_quote('', 'A') few employees at a factory in Kuji that manufactured shipping parts showed up for work on Monday, even though it had been reduced to rubble. One young worker smoking a cigarette outside the skeletal remains of the Kita Nihon Zosen k.k. factory said he came "because it was a work day."