The recent earthquake and tsunami in Japan has wreaked havoc on Japan’s infrastrutcture and economy.  And the aftershocks are still being felt.  Not only are there geophysical aftershocks to deal with, but aftershocks in the Japanese economy and the ripple throughout the rest of the world’s financial markets.

Of particular concern in the timing of the event, as the world economies were showing a few signs of life after a three year period of economic devastation.  Japanese Auto production has been shut down.  The Germans have shut down their older nuclear plants.  The markets have tumbled.  What are the long term impacts likely to be?

For one, as Japan must now focus its capital on rebuilding, the net worth of the world will not grow.  Using capital to expand and build can be engines for growth.  Rebuilding what already existed but now is lost is a net-net absorption of wealth.

The Bank of Japan has already released capital into the markets to boost rebuilding efforts.  This will surely have ripple effects on US issued treasuries and the debt of foreign governments all over the world.

The Japanese disaster is very unfortunate, and our hearts go out for all the families affected in this crisis.  While I struggle with grasping the implicaitons of what the horrendous event may have caused– ripples that will be felt long into the future– when looking at the anemic economies of the world, the unrest in the middle east, and the devastation on Japan, it’s no wonder that the markets are spooked.

Aside from a few bright spots here and there, there is major unrest, major natural disasters, hyper-inflation on our doorstep, and governments, both domestic and foreign, that are basically bankrupt.

The next several months will tell the rest of the story…

About the Author: Joseph M. Bochicchio, PLLC., is a licensed Charlotte, NC Bankruptcy Lawyer with nearly 2 decades of experience in finance and law. His Charlotte Debt Settlement Law Firm is committed to providing legal and ethical guidance for North Carolinians facing financial hardship.

Leave a Reply

You must be logged in to post a comment.

View Our TV Commercial
Free Consultation

Call us at 704-543-2294 or fill in the form below to schedule your free consultation.

Your Name (required)

Your Email (required)

Phone Number (required)]

Enter Message Below

To reduce "spam", please enter image in field below.
Enter Image Here:

Debt Law Help Logo Joseph M. Bochicchio, PLLC

Debt Settlement and Bankruptcy Lawyers

Main Office:
6025 Blakeney Park Drive
Suite 130
Charlotte, NC 28277

Steele Creek Office:
2015 Ayrsley Town Blvd
Suite 302B
Charlotte, NC 28273