the japanese economy is in very dire straits

EconomicCollapse | Now that nearly a month has gone by since the horrific tsunami in Japan on March 11th, it is starting to become clear just how much economic damage has been done. The truth is that the Japanese economy is in much bigger trouble than most people think. This is almost certainly going to be the most expensive disaster in Japanese history. The tsunami that struck Japan on March 11th swept up to 6 miles inland, destroying virtually everything in the way. Thousands upon thousands of Japanese were killed and entire cities were wiped off the map. Yes, Japan is a resilient nation, but exactly how does a nation that is already drowning in debt replace dozens of cities and towns that are suddenly gone? The truth is that thousands of square miles have been more completely destroyed than if they had been bombed by a foreign military force. The loss of homes, cars, businesses and personal wealth is almost unimaginable. It is going to take many years to rebuild the roads, bridges, rail systems, ports, power lines and water systems that were lost. Nobody is quite sure when the rolling blackouts are going to end, and nobody is quite sure when all of the damaged manufacturing facilities are going to be fully brought back online.

The truth is that this is a complete and total economic disaster.

The Japanese economy is not going to be the same for many years to come. In fact, many are now warning that this could be one of the triggers that could lead to another major global financial crisis.

One of the big fears is that Japan will need to sell off a large amount of U.S. Treasuries to fund the rebuilding of that nation.

If that were to happen, it could result in a "liquidity crisis" similar to what we saw in 2008. Already the rest of the world is really starting to lose confidence in the U.S. dollar and in U.S. Treasuries, and if Japan starts massively dumping U.S. government debt things could get out of control fairly quickly.

In any event, it is undeniable that the Japanese economy has been absolutely devastated by this crisis. In fact, when you combine the tsunami and the nuclear crisis, this could be the biggest economic disaster that any major industrial power has faced since World War 2.

So will the crisis in Japan push the rest of the globe into another major recession?