The "Economic Tsunami" from Japan

I am not making light of the tragedy in Japan, but an "economic Tsunami" is coming as a result of the tragedy there from the earthquake and the nuclear power plant problems. Japan is a major customer of U.S. products -- and a major seller of merchandise to the U.S. Japan is also a major investor here and Japanese businesses own a lot of real estate. The truth is a lot of American jobs depend on a strong Japanese economy.

Now the Japanese economy is under tremendous stress and it could get a lot worse if the nuclear power plants suffer a meltdown. Not only would this seriously damage the Japanese economy and life in Japan, but it also threatens the American agriculture industry and Canada's agriculture industry as well.

Japan will need to rebuild and rebuilding could help some American contractors and suppliers. Japan will need concrete and steel and lumber and the demand could increase our prices and hurt our housing recovery. At the same time, Japanese businesses might need to pull money out of the United States for their own rebuilding and reinvestment in their own country.

A lot is at stake. Watch developments carefully.

It's been a month since the quake and tsunami and now most of America already knows about some of the economic impact: there is a shortage of auto parts, auto production at some plants has been stopped, new car deliveries will be impacted, and certain brands of Japanese electronics will be delayed. Some factories making consumer electronics were severely damaged impacting the delivery of cameras and camera equipment. The TV industry is now facing a shortage of certain kinds of digital tape for recording and the distribution of TV shows. But the forecast is that in about six months the factories will be open and producing again. In the meantime we will have to deal with delays, shortages and perhaps even price increases.