Nov. 2019／Commentary and opinion pieces on the latest news and current affairs in Japan and around the world by Naoya Fujiwara (President, the Japan Revitalization Program and Promotion Forum)

As one of Japanese NGOs, called "the Japan Revitalization Program and Promotion Forum," we have had "lifelong learning" lectures every month since 2015. 

Commentary and opinion pieces on the latest news and current affairs in Japan and around the world by Naoya Fujiwara, President at the Japan Revitalization Program and Promotion Forum" are as follows: 

Introduction

Hello everyone. The Daijosai seemed to be over without delay, and the era of the new Emperor Naruhito, known as Reiwa has been started in earnest. As you can see in today's resume, it is moving a lot. It is a tremendous movement. As I said before, the Heisei era didn't change its shape much. During the Heisei period, there was more liquidity than movement; there were mixed feelings of joy and sorrow. I have been saying for a long time that the form of the Reiwa era will change drastically based on such things, and that is exactly what is happening. That's why it's not a good choice to just watch over in the era of Reiwa. Try it. Please think that the basic thing is to correct while moving. If you wait and see until the result comes out, the time will move forward. Please do your own trial and error while moving and correcting. That's especially true of corporate activities. If we wait for a chance because we really have money in corporate activities, we won't have any chance. Even for individuals, you will never get a chance unless you move yourself.The most terrible thing is water disasters. In short, it rains more than expected. I think this is the rise of ocean temperature, but there is still a possibility that the range of this water will expand. After all, where to live and where to put the factory must be seriously considered. There is no such story in Nagata-cho, the core area of Japanese government administration. They are saying that they will take disaster countermeasures for 4 trillion yen, but in short, it is something like emergency measures. Just something that cures a little. Global warming is something that can't be managed with a small budget. Up until now, global warming has been a political issue, but everyone thought, "I didn't know that." and suddenly water came to our feet. After all, I really think we have to move in the Reiwa era.

"Spit out" One Chinese character for next year

A year in which accumulated stagnation is spewed out in bursts and swept away

Today's resume will come in order. About this time of the year, I announce one Chinese character as the keyword of the next year around this time of the year. I was talking on the internet radio a little while ago. Next year will be "exhale". It means to spit out. It feels better when exhaling and spitting out. That's what I want to say first. We feel better when we spit out. In short, it is the best to spit out the stagnant things even if you can't digest them all. It doesn't even ferment anymore, so it'll be easier if you spit it out. Next year will be the second year of the Reiwa era. Well, it's been 2 years since Emperor Naruhito was enthroned, so I think the United States, China, Japan, Europe and the Middle East are going to start spitting out next year. By this time next year, it will be like, "What a relief. By the way, what should we do now?”. So you can think of it in a good way, and make sure that no one spits you out. You should think about your position there. Also, spitting out means, for example, a mudslide. That's why it's dangerous. Disasters are also dangerous. The water is coming out of somewhere. Please be careful of water disasters. Talking about earthquakes and tsunamis, the west side of the North American continent is in trouble now. On the west side of North America, it's just around Los Angeles up there in Washington, British Columbia, Canada, and a little bit higher. I heard that there were not many ocean-trench earthquakes around there in the 20 century. The trench type is the one that can pop the ocean plate. Recently, offshore Oregon has been hit by a series of mysterious earthquakes. Yellowstone volcano is also likely to blow. And in Los Angeles, there is a mysterious fault running in the land. If you go beyond the mysterious fault, it doesn't seem to remain in history, but it seems that a new fault is moving toward the fault which caused the earthquake of magnitude 8.0 class. That's why I'm so nervous. The atmosphere is that something is likely to happen soon. Also, in Greece, there are many earthquakes on the islands of the Aegean Sea. They said that they would do tsunami response training soon. That's why the story of natural disasters is really scary, but you should be prepared for it because it will be a big problem if you come. So next year, the word "spit out" will be used, so please be careful not to let people spit you out. I want you to think about various things from now so that you will feel better after spitting out.

A revolution has begun in China

・Liberate Hong Kong, revolution of our time
・Uprising of urban intellectuals, Bank runs and farmers, Depression and soaring prices, Foreign support for the revolution
・The Soviet Union, Japan, China,... historical end of bureaucracy

Let me talk about the world current situation, the biggest story today is the revolution in China. China has finally become a revolution. One thing I would like to say is that since Japan is not a country of revolution, people have no image of revolution. Frankly speaking, Japan has never experienced a revolution. The Meiji Restoration is not a revolution. The postwar is not a revolution; It's very different from a revolution. Revolutions are very different. China is a country of revolution. A little over 100 years ago, the country called the Great Qing Empire was overthrown and the Xinhai Revolution occurred, and the Republic of China was founded. After the war, the Communist Party took power and it was a revolution. China is a country of revolution. So that revolutionary country would overturn the present system. Things change from top to bottom. It is a revolution that the top and bottom change. So if you think people are just making noise, you're completely wrong. Revolution is not like that. Revolution is a big thing. This revolution has a name. It is called Liberate Hong Kong, revolution of our time. This word has appeared since around September. Now, both revolution and war are in the era of the Internet. For example, it may be a little hard to see, but this image was posted today. It's beautiful. It's just like Hong Kong's neon lights. The letters are beautiful, but the contents are hard. They kill each other in the revolution. It says " Liberate Hong Kong, revolution of our time" and it means to regain Hong Kong. This is a revolution, so there is even a national anthem. It was created in September, and now they are singing all over Hong Kong. So Hong Kong will become independent. I think it will become independent with Guangzhou Guangdong Province. It's already there. As I have been saying for a long time, Hong Kong's independence and civil war will surely start. China must get things done without civil war. It feels like it has finally started. The conditions for this revolution are right. Why did it become a revolution? That's Trump. It became a revolution by Trump's policy no matter how. I think I've said before that Trump will do big things. Before the election, he said many things in the book. He said in the book that he would return the dollar and the army, but he said a lot about relations with foreign countries. Among them, he is most conscious of China. As for China, he doesn't explicitly say it's a bad country in a bad way, but he says China is a tough country. He was saying that the relationship with China had to be changed. At the same time, he also wrote that we should be careful. In short, it's not easy. He wrote that the relationship between China and the United States must be reviewed carefully because it is complicated and has a great impact. As one said, Trump's approach is to keep his friends close and his enemies closer. Everybody misunderstood this. Both Shinzo Abe and Xi Jinping misunderstood it. Even Trump brought them very close, so they were not really close friends. Mr. Trump's closest pull is his enemy. So the change of Saudi was the same. And Netanyahu in Israel would have been like that. Everybody is down now. Don't you think Japanese government will collapse in response to the cherry blossom-viewing party scandal? The prime minister was stuck answering more than 30 questions himself. 

Now, how does Trump cook? From the beginning, he said, "Reduce the trade balance to zero". If the trade balance is zero, it must be hard for China, Japan, Europe and especially Germany. They are making profits by selling goods to the United States and running the economy. That will be a problem. First of all, Trump wants a weaker dollar, you know that. The dollar is going cheaper at first. But the exchange rate doesn't stop China from breathing. As I said before, it is the interest rate. Since Trump became president, the rise in short-term interest rates has not stopped. The short-term interest rate is rising rapidly. At last, from the time Trump became president to the time when the short-term interest rate finally reached its peak, it increased 12 times. Since China was the biggest borrower at the zero dollar rate, I thought, "The Communist Party dies", by watching the rise in short-term interest rates. They borrow a lot of money at zero interest and roll it around in a short period of time. It's a refinancing. And since Trump eventually raised the interest rate to 12 times, it's clear that it's going to be cash-strapped. 

Anyway, the Chinese Communist Party has never experienced that modern bubble burst. There was a small one in China, but they didn't do a complete panic. China hasn't gone through a complete panic, so they never know what's going on. After all, China is in a daze. The interest rate was soaring, the economy was in a daze, and as expected, the recession was coming, and then the financial crisis began. Chinese companies will not be able to be talented overseas. They won't even be able to go public in the U.S. by saying “Look, I've run out of money.” In the end, Hong Kong has always been the gold gateway to China. They were doing their best there. I guess they thought they were doing well in Hong Kong, but Hong Kong has been pretty tough for about two years. The real estate market was unstable for a few years. After that, the recession was coming rapidly. In the meantime, we've been talking about the umbrella revolution. There were several demonstrations like that, and students were taking action. Anyway, intellectuals lead the revolution in China. They are completely different from university students in Japan. China is the country where intellectuals are the main actors of revolution. The intellectuals move, the farmers start a riot and it becomes a revolution. My son is in Kobe. He’s a freshman. I emailed him this morning. There is a website showing that so many students in Hong Kong are protesting and Molotov cocktails are thrown. "University students about your age are making a revolution at the risk of their lives, this is the world." I said. What do you think I got back? It says, "I am having a quiet breakfast now. It is delicious." It's a very good thing, but if you look at Japanese university students and think it's the same, it's totally different. No matter how many years have passed, genes still remain. In China, intellectuals lead the revolution. What students want is democracy. It was the same in 1989. The Tiananmen Square incident in 1989 was also democratization. As I thought, there is an order in everything. When they become middle class, they want politics next. But the Chinese Communist Party did not break down the one-party dictatorship. In short, Xi Jinping says he runs his administration based on the middle class. But the middle class will collapse first when the bubble economy collapses. Nothing is more dreadful than the middle class. People in extreme poverty are always in extreme poverty. Most millionaires are much richer. But the middle class is the most vulnerable. If they say they support the middle class, they can't let the bubble burst. Well, if they were dependent on the United States for their economic management, if they were using the financial markets of the United States to make the economy richer for the middle class, it would be obvious that they would be upset if they were doing that. They don't understand at all. When you are about to overturn, how do you survive by changing the government? In Japan, the Liberal Democratic Party was replaced by the Democratic Party of Japan. After the bubble burst in the Showa era, the Liberal Democratic Party was split and the Democratic Party was established and the government changed. At the time of the Great Depression in the early Showa era, Good Governance Party changed to Seiyukai. At the same time, the Republican Party was replaced by the Democratic Party in the United States. Politics will survive with the change of government. Otherwise, the middle class won't survive. But China is not preparing for a change of government at all. As always, the People's Liberation Army is a party army. China can make the People's Liberation Army its national army, and make the First and Second Communists, and like the Republicans and Democrats, it can manage. If they divide the party into two groups, one is for the foreign party and the other is for the domestic party, we will be able to manage. Politics is a game. It is politics to play the game in Goetsu Doshu; Friend and foe in the same boat. A change of government is not a revolution. A change of government or a fight between the ruling and opposition parties is not a revolution. It's just a political fight. It's a battle in the boat of Goetsu Doshu, so it's different from the revolution. It's the only way. Well, if it's a revolution, they have to either do it like the National Party, which has the very richest man on their side, or do it like Mao Zedong, which has the poorest farmers on their side. There's no way they can get an answer. I was wondering what they were going to do when they were pulled away by the deck. That is the current state of the Communist Party of China.They haven't had a nerve since long time ago, so they hide their head and not hide their bottom. It's the limit of bureaucracy.

It's too late. First of all, what is happening in China is being abandoned by urban intellectuals in the hope of democratization. The people in Hong Kong are demanding five things, and they say they can't afford to miss one. And this year, about four regional banks in China went bankrupt with a run on. About two places around Liaoning Province. Some banks may not be familiar in the countryside, but in Liaoning Province, even near North Korea, banks have collapsed. The bank run is the scariest thing for farmers and ordinary people. The Chinese government is putting money into the financial system now. Since Trump is pulling out all of them, they can't catch up at all. The short-term interest rate has dropped considerably. Even if it goes down, it's still expensive, so money will be withdrawn from China by paying interest. Trump will not stop sanctions until the trade balance reaches zero. Trump is different from ordinary politicians and presidents. He runs like a manager until he comes to a final decision. Trump is saying that he will balance the trade balance to zero, so he will never relax until the balance is reached. 

According to today’s newspaper, 96 year-old Henry Kissinger was also worried and said "If we don't get things right, the United States and China will fall apart." There are various ways of thinking about what to do with China, but I think Trump has been doing it forcefully from the beginning, even before he was elected. "This will be more than w world war,” Kissinger says. It doesn't mean war, but I think it does in the economic sense. But Trump has no intention of quitting. In that case, farmers' riots won't stop. China is facing a recession and skyrocketing prices. The recession must have been caused by the United States stopping imports. The soaring prices are caused by pork recently. They got rid of 100 million pigs for African swine fever. I heard that the price of pork went up by 70% after 100 million pigs were disposed of. The current inflation rate is the highest in 8 years overall. What will happen if the economy is in a slump and prices are high, but it will get worse? Not only farmers but also intellectuals make noise. And there are foreigners there. For the most part, foreigners are always involved in the Chinese revolution. Japan used to use it a lot when the Qing dynasty fell. After the Sino-Japanese War, Japan also did very bad things, like joining the army. At the end of the Qing Dynasty, Japan shook and demanded the 21 articles of the Qing dynasty to the last. Japan made unreasonable demands. That place is Hong Kong, so England has been touching it for a long time, and the U.S. has also touched it. The U.K., the U.S., and Tibet have been democratizing for a long time. But no matter how much they do it from outside, if the inside doesn't collapse, it will never collapse. Same as short selling on the market. Even if foreigners start short selling, it will never collapse unless the society is in a state of collapse. That's why even if things have grown steadily only with the help of foreigners, they won't fall off just with foreign intervention. The world isn't that sweet. When it falls is when it is falling. When the persimmon fruit is about to fall, it will fall if you shake it. Chestnuts will fall if you shake them. If you shake it at such a time, it will crash. That's why it's dangerous. That's where the nerves are. Where does it come from? There are points. They should see the point and do something there. But before that, it seems like they don't know that they did it, even though they didn't do that. The bubble burst once in 2016.

First, the U.K. and the U.S. came out this time. There must have been a fuss since around September. Not only students but also workers and intellectuals got on the road and made a fuss. They have umbrellas to avoid tear gas. At the time, the people at the front were pretty fierce. They're slim and they're good at swinging sticks, and they jump up to the point where they hit an adult on the head. They were definitely professionals. I was told that the CIA was back. Now everyone can see it on the Internet, so you can see it by looking at it. But that changes the game. Things changed in October, and there are no such skinny guys now. Instead, they came out with very big people. People with the physique of professional wrestlers are among the demonstrators and the police. In short, the Beijing Police, the Armed Police and the People's Liberation Army in China. Hong Kong is a civilized country, so young people can't fight hard. The movement is totally different, so please compare them. Also, people like the armed police are demonstrating recently. They're destroying it. That's why it started to catch fire and break all at once, and it became a chaos. In short, in order to suppress Hong Kong's democratization, it is the usual pattern of the Chinese Communist Party to justify repression by saying that the mob in Hong Kong is a villain, not a revolution, just a mob, and a criminal. It is very special one pattern. It's all over the world on the Internet, and we can see everything, but they're hiding their head and not hiding their bottom. First of all, Taiwan President Tsai Ing-wen said, "The Communist Party of China should pull back its hands and stop violence.". Actually, Taiwan has a terrible history. After World War II, Chiang Kai-shek's Kuomintang lost the battle of the Communists and fled to Taiwan. This was a terrible terror. It is called the white terror. They caught and killed every dangerous person under martial law. This has been politically liquidated and the reality has become clear. Taiwan released all the documents when the government changed. The government officially apologized. That's why the Kuomintang settled the situation and apologized in the age of the white terror, and now Taiwan exists. This time it's like the white terror, so the president of Taiwan said, "Stop terrorism." Then, the Japanese Communist Party said, "The Communist Party of China should dissuad itself from violence and closed its hands". And it's the United States. when Secretary of State Mike Pompeo said, "The Communist Party of China and China are different," when he spoke in Berlin last week or this week. I thought Pompeo had said it at last. Pompeo is stuck with Trump, so "China and the Communist Party are different." is Trump's will, isn't it?

In short, no one wants to destroy the whole of China. No one can or should do it. We never know what the Chinese Communist Party will do unless it breaks down. It's a threat to the world. I guess more than 1 million wiggles have been arrested. It's ridiculous, like there, or Israel, because it's such a ridiculous government. Saudi Arabia, too. Especially in China. So, unless the Chinese Communist Party gets rid of them, America can't go back to the American continent with peace and security. And the U.S. Congress, first of all, the House of Representatives. It was originally on the Democratic Party side. The CIA and the people who are running it say they support democracy. This time, the Senate has rushed to pass the pro-democracy bill. This has something to do with the trade friction. They're talking to the president about, you know, " We are going to democratize, so if China launches the People's Liberation Army, stop trade." But Trump is good. Trump himself has yet to reveal his pros and cons on this issue. Trump hasn't said it yet, so his relationship with Xi Jinping ends the moment he says it. When Trump says, "Support for democratization in Hong Kong" his relationship with Xi Jinping ends. Trump is doing well there. 

But now that things have come to this, only North Korea and Russia support the Chinese Communist Party. And it was a long time ago. They just talked about support long ago. No country has said it's good in a situation where Hong Kong is in turmoil, armed groups of the Communist Party of China, and the People's Liberation Army has started killing more and more people. So I think the Chinese Communist Party is in a hurry. They want to make it look like criminals are making a fuss, but it's just not possible when the Internet comes along. The Internet kept spreading information about wars and failures. For example, the most recent war was the Iraq War in 2003. Since the start of the Iraq war, the United States has been in Iraq saying, "We won, We won, We won, We won". They invaded Iraq more and more. But at the time, American soldiers on the battlefield emailed their families to tell them what was going on. The U.S. didn't win at all. It was revealed. It started there. Afghanistan was the same. So was the Syrian War. The war in Syria was broadcast live on the Internet, saying, "A bullet came flying ― hit.". The civil war is over. So, now, when they do this kind of nerve-wracking thing and they disguise themselves, even if they say they're enemies, they'll find out right away. So that was cornered. That's why there are two ways. One is that Xi Jinping will resign. If Xi Jinping resigns and says he will overhaul the Chinese system and leave it to a group council, that may change a bit. It's a revolution, so it's a matter of life and death for both of them, so they give it up politely. It will change when Xi Jinping steps down. In general, Xi Jinping lost to Trump. Even so, I think Xi Jinping is losing his prestige. But I think Xi Jinping is continuing because it's over when he gets off. If Xi Jinping doesn't give up and send out the People's Liberation Army, the price of Hong Kong stock will be zero and the land will be zero, so we won't be able to get any money from China into China. It's the end of the stick. As Kissinger said, a catastrophe is coming. The United States should just throw everything away and go back to the mainland, so China's catastrophe will come. So that's the end of the year. When a uniformed soldier comes out with equipment, it is completely military occupation. Because it's military occupation, students start guerrilla warfare because it's revolution. How many years did it take to build a nation after Mao Zedong started? It's long. That's the Chinese revolution. They say that they won't give up because it's been a long time since they started. That's why the guerrilla war started and everyone is angry because the economic situation is like that. If that happens, China as a whole will suffer a catastrophe. Or Xi Jinping might be killed by an internal rebellion. There are several possibilities. In any case, as long as Xi  Jinping is sitting down, the current Communist Party will be targeted by Trump, and the people will also be pushed up from the bottom, so I think it will be uncontrollable. In any case, such a thing is happening in Hong Kong, and depending on the progress of the revolution, I don't know how long Japan will stay. For example, there was the Shanghai incident a long time ago. It was before the war, but there was a big fuss. And also Manchuria. In Manchuria, when Japan collapsed, they were supposed to leave everything behind. Since the old days, China has been catching on quickly.

Looking at this riot, there is a town called Nanchang in Jiangxi Province. The teacher of Nanchang Hongkong (Aviation) University here said that he supports students. Nanchang was the place where the People's Liberation Army first disarmed. It was like the beginning of the People's Liberation Army when they gave up their arms in Nanchang, and even now the anniversary of the PLA's founding is the day of Nanchang's abandonment. That's how Nanchang is. The fire broke out in Nanchang. Those people post support messages and pictures and support one after another through the Internet. Looking at it, there are many people studying abroad as well as all over China. I guess it is still increasing. It has become a full-scale revolution. 

And as for the exit of the revolution, we don't know yet. In short, we don't know until the mainland China starts moving. It's still at the entrance. It's just the beginning. After mainland China starts moving, it's going to get serious, so it's just the beginning now. That's why next year will be the most intense. It's a revolution, so there are many possibilities. But it may be settled sooner than expected. The Xinhai Revolution was settled in 1 year. People from foreign countries came to China to overthrow the Qing dynasty, and the Republic of China was established in the following year of the Xinhai Revolution. But Mao Zedong took many years. So sometimes it is settled soon, sometimes it takes a long time, and in any case, the revolution will not end even if they suppress it. The more they are oppressed, the stronger they are. As I said before, this way of fighting is the same as guerrilla warfare, and there is an equation from the old days. The so-called resistance movement or guerrilla war has been a way of fighting since old days. It's a way to win while losing. The worst thing to do in this kind of situation is if students have the same weapons as the army, they lose. Why do you think so? The worst thing to do in this kind of situation is if students have the same weapons as the army, they lose. Why do you think so? If students have the same weapons as the army, they lose. Because it's an equal fight. No, if it's not a crime from the bottom, no one agrees after winning. That's why they have to fight with the tools of democracy. That is the basic. But if they can only shoot with guns, they can't say so, so there will be various things. 

In other words, if the military force is not overwhelmingly weak, actually no one will trust you after they win. So, the way to fight is to fight local battles by guerrilla warfare and withdraw quickly with less damage. They fight and withdraw, and fight and withdraw. Each battle is sure to win over the other side. That's why they lose each battle, but they run away quickly. Vietnam was like that. Afghanistan will be like that. Everyone fights like that. While they were doing that, the other side was gradually being driven into a mental corner, and got scared. They’re scared because they don't know where their enemies are hiding. If they do such a thing, it's going back and forth. Somewhere, there will be a moment when it will definitely hit the other side. It will definitely collapse somewhere. Because of that, the other side can collapse. For example, that big China, everyone thinks students can't destroy it all, but it's not. That's the big one. If some of the important parts fall down, everyone gives up. Sometimes they thin out. When one spot collapses, it is exactly one hole of an ant, and all of them may collapse by a needle. Guerrilla warfare and revolutions can collapse in an instant if they don't watch them carefully.

For example, this is written in Taiheiki. The war chronicle of medieval Japan called Taiheiki describes the time when Emperor Godaigo defeated Kamakura Shogunate. Emperor Godaigo did exactly the way they do now. Every time they fought, lost, or lost, their support increased. That's the point. If they say "There is support." when they fight and lose, they win. Emperor Godaigo did it. In the end, the government office called Rokuhara Tandai, which was located in Kyoto, was destroyed. When they attacked here, Rokuhara of Kamakura Shogunate fell. They said they finally dropped Rokuhara, but they also said Japan is very large. At that time, the Kamakura bakufu (Japanese feudal government headed by a shogun) was doing it for 270 years, and there were shugo and jito (military governors and estate stewards) of the Kamakura bakufu side all over Japan, and now they are going to defeat one place in Kyoto, and how many years after the Kamakura bakufu itself falls? That's a few months. The Kamakura Shogunate ended a few months later. It broke from inside. This is how to fight a revolution or guerrilla war. 

So does the LDP. The Liberal Democratic Party is now completely unsettled, so if there is any bigger scandal, that could be the end of it. Companies, too. So do banks. If they are already exhausted, one big thing may collapse at the end. So China has to be careful now. Then, many things will happen in Japan. It happens all over the world. We still don't know if it will work to some extent or if it will lead to a catastrophe, so we have to take a close look at this. In any case, I think it is the historical end of bureaucracy. In short, because China is a complete bureaucracy, those who think "I'm a bureaucrat." are doing it. They are different from local government employees. "Let's make our town better somehow." they will become local government employees. Bureaucrats are different because they create a different world. They make a different world and make their own world, and the military is in it. The military is made to be independent. The military is able to obtain food by themselves, and be independent in communication and transportation. The Chinese Communist Party has a military, so it's a completely different world. They have a different world of communists. This is bureaucracy. 

But the Soviet Union has collapsed. With the collapse of the Soviet Union in 1991, the bureaucracy in Japan is collapsing right now. It's rattling. Japan also started from the Ritsuryo system, and the origin is China. China's bureaucracy is finally over. The bureaucracy is over. What I find interesting when I see North Korea is that I see Kim Jong Un very well, I think he doesn't like bureaucracy. He has his own army, doesn't he? The army does not only fight but also prepare food and do various things. The military also has a civilian component. So he uses an army that listens to him, and he cares about it. That’s why he's doing a lot of work, and he said the other day he's going to make the government 1/3 big. Kim Jong Un is also destroying the bureaucracy. It is completely Soviet style. The bureaucracy is over. Therefore, from now on, there is only politics for the people by the people. Then, it could be blockchain as a supporting tool. Everyone, please study blockchain. So this revolution in China is the final collapse of the bureaucracy. I think the world will go there.

Another sharp rise in JGB yields

・Japanese long-term interest rates also soared on hedge fund selling
・Prices of CLOs and low-rated bonds continued to fall
・We are moving into a full-scale depression

On the financial market, interest rates have started to rise. Everyone is in a hurry. This is the trend of long-term interest rates in Japan. This is the change in the interest rate of Japan Government Bonds due 10 years from around April this year.（Japan Government Bond 10Y） The interest rate has come down. This is zero, so the interest rate is negative, but the interest rate of Japanese government bonds has dropped smoothly. It's been going up and down a little bit, but it's been going down until around September. 

As I said before, something has changed in the U.S. government bond market since September. Interest rates in the United States have been going up since September 3, saying, "Hey, what are you going to do with all this?" Then, on September 14, there were missile strikes and drone strikes in Saudi Arabia, and from the following week, interest rates went down once. Now, the financial crisis begins. Each bank's funding crisis begins. "We have no money ― no money." banks panicked and a big incident happened.

At the end of September, the interest rate on short-term funding in the United States, which is usually about 2%, jumped to about 10%.（US Overnight Repo Rate） This is the big thing that happened after the Saudi crisis. It's still going on, and after it's gone, the Fed is rushing to ease monetary policy. The Fed doesn't use the term easy money, but what it does is it lends money to cash-strapped banks. The Fed is lending more and more money to banks that have run out of cash and can't borrow money from them. As a result, short-term interest rates have fallen since then. Because of this big incident, the end of the year is approaching and they are strengthening it again. And everybody says, "Which bank did the Fed lend to?". Everyone asks where the banks can borrow from the Fed because they can't borrow from the market. The Fed says it won't. This movement is not one or two banks. Not one or two banks, everyone can't get it.

This happened in 2007. There was a subprime crisis in 2007. It's very similar to that time. At that time, European banks could not raise U.S. dollars all at once. The reason is that the securitized products they had were actually very low when they were mispriced. When the asset value is very low, there is a concern that it is already in excess of liabilities as a bank. That's why the banks in the US have stopped lending money to the banks in Europe all at once. If I remember correctly, in the summer of 2007, the subprime crisis spread this confusion and led to the collapse of Lehman Brothers the following year. That's why European banks couldn't borrow dollars all at once. 

This time, they are mainly American banks. I think there are banks in other countries, such as Deutsche Bank and Japanese banks, but most of them are in the United States. Well, what is the cause? There are many reasons for that. There are already dubious mortgages out there. Also, the number of car loan defaults has increased considerably. Also, venture capital, investments with low credit ratings are uncollectible, and above all, American banks must have loaned to China or Saudi Arabia. The Trump is crushing them, so I think the bonds to Saudi Arabia and China are crumbling. Deutsche Bank invested a lot and American banks would have invested too. Well, they've put back a lot of things, but they can't put everything back. There are many possible reasons, but there is no doubt that a crisis has occurred. This is still going on.

If the interest rate goes up, it means that the price of government bonds goes down. The bond's price and yield are inversely correlated. Higher yields lower prices, lower yields raise prices. It's mechanical. It depends on the calculation formula. That's why interest rates go up = prices go down. You can see the difference in the way they move. When interest rates go down, that is when government bonds go up, the swing is small. This is proof that the market is stable. It is a proof that the interest rate is decreasing or increasing while it is stable. Volatility is a typical selling market. Stocks, too. When stocks and bonds collapse and a lot of real goods for sale come out, they move like this. It looks like a saw blade and the price goes down. If it's the interest rate, it goes up like a saw blade. 

Stocks are clear, too. Everyone just buys an index and goes up. Once it starts to fall, there are short sellers who say, "Come back." but they just step on it and go up. It is a typical way of lowering the market that the market falls while fluctuating wildly in the mountains and valleys. Giant ups and downs together are proof of real selling and the way the market declines. Japanese government bonds are a typical example. I've said it many times, in other words, interest rates are going up, or prices are going down, so you're worried. The Financial Times said, "Who sold it first, hedge funds?". Hedge funds cannot sell off a stable government bond market. The prices of Japanese government bonds have been going up for about 25 years, and interest rates have been going down. Apart from temporary things, people at home and abroad have tried many times in the past to sell them short or to play with them in an attempt to lower them, but have not succeeded. The Japanese government bond market is large, so foreigners are just speculators, not outright sellers. The market is not that sweet. But there was a downside to this. They kicked a little at the top, and it slumped.

The dollar crisis has occurred in the United States. The crisis has finally entered Japan. It landed in Japan. So far neither the Japanese government nor the Bank of Japan has said anything. But that's tough. I remember the old days. I remember the end of 1989 very well. 1989 is exactly the first year of Heisei era. The Heisei period started in January, and at the beginning, we were quiet when we were in mourning, and it was said that both the market price and the stock price had risen considerably since the autumn, but actually the market price had collapsed. In 1989 and the first year of Heisei era, stock prices only went up, but large-cap stocks were sold in the summer, and government bonds were sold in the autumn, and interest rates began to go up. I was in an American securities company at the time, and I thought, "Interest rates are going up, and it's creepy. Stocks are too expensive by any means. There must be something.". But I had no choice but to be bullish to the customers. We were talking about something exciting. I was wondering what would happen, but it's 1990. The market opened on January 4 in 1990, the second year of Heisei era and the stock market started to plummet. We haven't been there since then. That's why everyone is scared. It was 1989, the first year of Heisei era. This time in 2019, the first year of Reiwa era. What will happen to New Year's Day next year?

Stock prices are too high. The Bank of Japan bought more and more and lifted them up. To be frank, there are no stocks that are rising because they are doing well, and on the contrary, there are more and more companies that are doing poorly in Japan and the U.S. since the autumn. Cars don't sell, smartphones don't sell. It's a shame that Mitsubishi's plane is postponed for the sixth time. But the stock price hasn't collapsed. In other words, the stock price is too high for a company. This is the most dangerous place. They should lower it to the same level as the actual condition. Everyone, if stocks go wrong, you can just sell them. Why don't you give them a discount? But as long as there is a company, it always stops somewhere. What about stocks? If something goes wrong, you should sell more and more stocks. You are going to be able to spit it out. Then, it always stops somewhere. After that, if people think this company is good around here, they will buy naturally. If they buy naturally, they can rebuild the company and the market. If they don't do that, nobody will come into the market because the central government and the Bank of Japan support them in the middle of the market.

For example, there are only four foreign companies listed on the Tokyo Stock Exchange. At its peak 20 years ago, there were up to 125. There are only four companies now. In short, the market isn't working in Tokyo. They're raising the price. The Bank of Japan has hoisted as much as 28 trillion yen in stock and raised the price by cheating, so it must have been hoisted especially after the Abe Cabinet took office. That's why people can't buy it, it's too expensive. If it goes down even more, and it goes down about eight times 20%, someone will buy it and you can start over. If the company works hard, it will be a stock after that. They told not to take it down, so no one bought it. When they can't support at the end, they'll fall down like a bang. Japanese officials really don't understand things at all, they just sit back and take it easy.

It's a different story. It's a bond. As might be expected, we can't say that we can lower the debt once. Only bonds and interest rates will stop once they fall. The most important thing to keep in mind when operating financial markets is not to raise interest rates. It is not to let bonds drop. The bonds are different from the stocks. It is over when the bond price falls. Why do you think so? As bonds fall in value and interest rates rise, the economy and personal life are driven into a corner. Interest rates on housing loans have risen, interest rates on corporate financing have risen, and government funding rates have also risen. So when interest rates go up, they're all out. 

The key to monetary policy is never to raise interest rates. There is nothing worse than raising the interest rate. We can't raise interest rates anyway. Trump keeps saying a lot. "Why doesn't the Fed lower rates? Both Japan and Germany have negative rates." he said. He often says, "The government has issued a lot of government bonds, and if the interest rate is negative, money will come in. Why don't they do that?". Trump is right in a sense. At any rate, raising interest rates is the end of the economy. If you've been listening to my internet radio for a long time, you know, before the start of the Abe cabinet, in 2012, around that time, the people at the Bank of Japan were saying that we should raise prices to 2%. They say that economic and monetary policies should be implemented to raise prices by 2%. "If you do something like that, the interest rate will go up, so don't do it." I’ve been saying it over and over again. When the interest rate goes up, it's all over. What are you going to do? If prices go up by 2%, the interest rate will be more than 2%. At that time, there was a brave man who said, "Even if the interest rate goes up that much, the bank is fine. The economy will get stronger, so it's okay. Abenomics is not such a thing.". As a result, interest rates turned negative and interest rates did not rise. If the interest rate had gone up, it would have been the end. However, interest rates started to rise late. Where are we going? This is creepy. So now, the United States is going back and forth, and it's going to be a big deal if it goes up, and Japan is starting to go up, and as it goes up, the economy is going through a recession, and stocks are going down, so it's tough.

Looking at the situation around the world, financial markets are unstable, and as seen in the resume, the decline in the prices of corporate bonds with low credit ratings, such as CLOs, continues unabated. A CLO is a collateralized loan obliteration, which is an investment in a low credit rating. Securities companies, too. I heard that Japanese companies bought a lot of them in the last three years. Everyone in the world sells them, but only Japanese companies buy them. Why don't Japanese financial institutions read The Wall Street Journal or The Financial Times first thing in the morning? They can find out if they read it first thing in the morning because most of the things that collapse appear on the paper. For some reason, Japan buys it first. An American newspaper said, "collapsed" but Japanese securities companies have brochures in Japanese that say, "Won't you sell it or buy it?". 

It was really absurd when Citibank was running a business for the rich back then. Citibank makes a brochure in Japanese about the same day of something that's broken up and sold in the American market and can't be helped, and goes, "Would you like to buy it?". It's a scam. It's the same now. If you don't want to be a trash can, read The Wall Street Journal or The Financial Times first thing in the morning. At least these two papers must be read in the morning before you can touch the market. If you read these two papers, you won't be an easy victim to them. That's why CLO is irreparable. 

And it's an investment in shale gas in the United States. Texas is in a terrible recession. Oil is in a slump. About Masayoshi Son, he said something outrageous again. I heard he's buying LINE. I think LINE is expensive. It may be in the red, but if they have that much data, it must be very expensive to buy LINE. They say they'll consolidate. And he's going to get Mizuho Bank to pay for it again. When he gets stuck, he talks big and pulls money. He grows bigger and bigger, and at last he raises his hand, and it's all over. It's like Bank of Taiwan and Suzuki Store. During the colonial period, the Bank of Taiwan lent money to Suzuki Store, a trading company in Kobe for various reasons before the war. That's why the collusion between Suzuki Store and the Bank of Taiwan became a problem in the Diet. Then all the creditors pulled out the money and both fell down. Both went bankrupt as a result. So if there is a funding scandal involving Masayoshi Son this time, it will be the same as before. For example, Harunori Takahashi of EIE International crushed the Long-Term Credit Bank of Japan, and Nui Onoue pulled money out of the Industrial Bank of Japan. When a big bank collapses, they usually lend it to a strange place. They're doing things like illegal lending. So if that comes out this time, they'll be out with one shot. There's nothing more dangerous than that.

So how much did Japanese banks lose? What is the ultimate loss? I can't say for certain how much the loss is going to be because they are doing trash cans like this. It's a trash can, as WeWork and Uber have shown. That's pathetic. So, looking around the world, we are moving into a full-scale depression. That is, it is becoming clear day by day that Trump is not willing to compromise at all on trade issues. Then, there is no sign that the U.S. trade restrictions will stop. Not only the real economy stops, but also investment stops. In other words, if the market doesn't expand or gets smaller in the future, investment plans will be disappeared. Also, the announcement of new car development will be postponed. If consumption stops, there will be no talk of building a shopping mall. 

The other scariest thing is finance. When finance stops, banks stop lending money. The market will stop lending money. That means you'll have to force yourself to stop spending, like not being able to make monthly installments or lowering credit card loan limits. When that happens, it becomes a so-called full-scale depression. The most important thing to be careful at this time is that something like Lehman Shock happens. The recession is still mild. There is a chance that a mild recession will turn into a real recession.

Just take a look at this. This is the short-term economic observation of the Bank of Japan. （p.14）If you look at the equipment judgment index of the manufacturing industry, it means that the equipment above this line is excessive. If it is below this line, there is a shortage of equipment. The facilities were insufficient until last year and the year before last. So the economy was too good. But it's back. The current facilities are just right. The lack of facilities means a great economic boom. But it is slowly returning. That's why I don't think there is a feeling that a big economic tsunami has come yet. The economy is gradually declining. The government says on the contrary, the economy is slowly recovering. Capital investment alone shows a mild recession. However, there was a place where the shortage of facilities became excessive all at once. This is the Lehman Shock. From the moment the Lehman Shock happened, the world economy stopped. The world economy really stopped, and it became overcapacity in a moment. In other words, in the last 10 years, we've eliminated this excess capacity. It was getting better. When we thought it was finally over, the next recession came. The biggest trigger for a full-scale depression is the massive financial crisis. The recession comes all at once, even from places that have nothing to do with your industry or your country. That's why I'm scared. As for the global economy linked with the current international financial market, when a huge financial crisis occurs somewhere, the manufacturing industry also experiences a recession in an instant. If there is a recession in the manufacturing industry, it will also come to the non-manufacturing industry. That's terrible.

And the number of employees. It's an index of whether there are enough or not enough people. (p.14) There is a serious shortage of workers now, but the peak seems to be hit. I don't think the labor shortage will spread any more. Around now is the peak of labor shortage. Before the collapse of Lehman Brothers, we gradually ran out of manpower. From the moment of the collapse of Lehman Brothers, there was a surplus of people. At the time of the collapse of the bubble economy in the Showa era, there was a shortage of manpower more than now. There was a severe labor shortage in Japan. When the stock market began to crash, there was a surplus of people. So the most scary thing at a time like this is the financial crisis. The financial crisis leads to the most severe recession. So read the newspaper carefully. You can just read the headlines, please. When a huge financial crisis like the one in the headlines comes, think that an economic tsunami will come soon. So, frankly speaking, investing at this time is the most dangerous. We'd better be careful about the investment for expansion. Conversely, new investments may be better made aggressively. Because when it stops, if you don't do the next thing, you won't feel good at all. If we don't do something new now, when the economy gets worse and worse, there's nothing in the company. So we have to start something new now. So does life. There are too many people left, so people go to public employment security offices looking for jobs. It's going to be a pity. So let's think about it from now on. If you think you have no future right now, quit if you can. “Know, Go, Explore, Meet, it’s important to build a network with people in order to do new things. We need to connect the various possibilities now. Everyone is making a fuss and saying it was unexpected, but it was within the expectation. It starts moving toward the next exit. When a massive recession begins, the next thing to think about is where the exit is. This time, the exit from the financial market is very difficult. Because at the time of the collapse of Lehman Brothers, the U.S. government put in 47 trillion yen in public funds to bail them out. Please think that there is no other country that can put such a huge amount of public funds this time.

A bank run usually takes two steps. The first one will cause a big fuss because everyone goes to withdraw money. It makes a lot of noise, but it's not that difficult. If the central bank takes care of the payment, it is all right to accept the requests for withdrawing deposits from everyone. But they can't leave it at home, so they put it in the bank where they think is safe. They'll take it out from here, but they’ll put it in another place. The redeposited money will be returned to the central bank. So, the first one is fine. This is okay, it's just a round sum of money. But the problem is that there is a clear separation between the bank that lost money and the bank that was redeposited. The bank where the money came out, nobody will ever come back. The final question is how to deal with banks that have lost money. Yamaichi Securities was like that, Takushoku Bank was like that, and so was the collapse of Lehman Brothers. The question of what to do with a bank that has run out of money is, for the time being, the central bank makes advance payments. But since it's an advance payment, the Bank of Japan's money can't be used to cover losses. 

So how can we save them? There are two ways. There is a method called Bail in and Bail out. Bail in is covered by the money of the persons concerned. Shareholders, creditors, large depositors, and small depositors are asked to compensate in turn. This is fair in a sense because the people involved are responsible, but the market will melt down. The stock price suddenly becomes 0 and the corporate bond price also becomes 0, and the market will melt down. When it comes to "Bail out," taxpayers will not forgive them because they will put in tax money. Congress will be thrown into chaos, and the government will not be able to hold on. At the time of the financial crisis about 25 years ago, even the people of the Liberal Democratic Party at that time were desperate. As a result of taking care of the banks, the ministers were fired. "They helped the banks that cheated." So, the most unlucky thing for a politician is to rescue a bank that is about to collapse. It's not just for the cherry blossom-viewing party scandal. It's not just about the Kake and Moritomo scandals. That's why everyone doesn't want to do it. 

It's the same in the U.S. The people who had the most difficulty were George H.W. Bush and his son. George W. Bush must have had a hard time at the time of the Lehman Shock. When his father was the president of the U.S., small and medium-sized American banks went bankrupt in 1989. What do you guys do now? Does everyone pay taxes for Masayoshi Son? Tax won't help. It will be Bail in. That's why the market is melting down. It can't be helped. This time the market will melt down. It's too late to do that. Of course, there are places where there is no such cheating and they are stuck. For example, there are places where the industry is strict and it will be a problem if they disappear. It's the local economy. In this kind of place, money comes in pretty quickly. People are willing to spend money for industries, companies and regions that are stuck and can't be destroyed. We can understand each other. However, a large-scale institution really triggers a financial collapse. A lump of fraudulent loans pulls the trigger. So that's the problem. In that case, it's a complete panic. The key to a full-scale depression is a huge financial crisis. So please be really careful.

Abe Cabinet Rejected by the cherry blossom-viewing party scandal

・The cherry blossom-viewing party scandal made Mr. Abe's backers on the side of being pursued
・Abe Cabinet Expands Foreign Aid, Defense, Education and Police Rights
・Expectations of a general election in the near future continue

And about the Abe Cabinet. As you can see in the resume, the cherry blossom-viewing party scandal hit them to their feet. That might put an end to the cabinet. The problem is, well, that's a legal problem. But as you can see, the scandal of the Cherry Blossom Viewing Society turned to the side where individual supporters of Abe were pursued. This time it's tough. They're all assailants. Some people won't vote again, so it's a tectonic shift. The opposition took an unexpected turn, and the Abe Cabinet fell apart. The party to see cherry blossoms itself has been held since 1952. In previous cabinets, they didn't do it as showily as the Abe Cabinet does now. Originally, it was a consolation party for those who made a great achievement instead of such a big loud party. It's a very presumptuous cabinet. Things happen unexpectedly. The prime minister himself answers the questions. This is a great achievement of the opposition party. I hear that there will be an election in December or January. If they are planning to host the Olympics next year and the fourth term of the Abe administration, they have no choice but to hold an election at the end of the year. If the LDP were to maintain power with Komeito, Mr. Abe would probably resign. Then, the next cabinet will be severely scolded by the people. The only way to survive and gain public support in the next LDP Cabinet is to pursue the Abe Cabinet. The LDP is strong when it comes to things like Takeo Miki who tried to arrest Kakuei Tanaka. After all, as you can see from the Abe Cabinet, foreign aid, defense, education and police were all vested rights and interests. We’ve never heard of such rights and interests before. Security at the Olympics is also a right. Protecting specially designated secrets is also a police interest. And so is education. Benesse, Kake Gakuen, HSU (happy science university) are the same. Then, we would buy a lot of defense equipment from the U.S. And then, foreign aid keeps coming in and giving away money "Don't lose to China.". That has a kickback. That's why the Abe Cabinet created so many new rights and interests. But no matter how we look at them, they're so naive. I guess they are doing things because they don't think they will be revealed in these scandals. That’s why they are not prepared for anything. When lies are revealed, they burn the documents in front of them.

When Moritomo Gakuen became a scandal, everyone turned around. Everyone said they didn't know. How heartless they are! The Abe Cabinet is characterized by its complete inability to protect itself. They can pretend to be aggressive by using the mass media and feel good about it, but this cabinet can't protect itself at all. This is the characteristic of the Abe Cabinet. You can see clearly that they were engaging in exploitation. Even if such people are gathered, the next politics will not start. It's impossible unless we change the current election system.

Politics goes from right to left

・Democratic presidential candidate's asset tax policy on the super-rich
・The Allied occupation of Japan in postwar
・Realistic path of economic democratization
・Organizations that don't respect humanity can't survive

And from now on, politics will move from right to left. The U.S. is totally like that. That wealth tax story is pretty big now. People often ask, "Is Mr. Fujiwara on the left or the right?". Both right and left are important. Everyone, how do you cross the street? Look to the right, look to the left, and look to the right before crossing. If you only look to the right, you'll hit a car coming from the left. If you look only at the left, you'll hit the car coming from the right. You have to look at both. You have to look at both right and left. It's not one of them. What I like the most is the middle. For example, the hottest is summer and the coldest is winter. My favorite seasons are spring and autumn. I like moderation. I don't like the hottest one and the coldest one. The extreme right and the extreme left are no match. The middle is definitely the best. Spring and autumn. The most important thing in politics and management is to be in the middle. Extremely hot or extremely cold is hard. But you can't put it in the middle at first. Look to the right, look to the left, look to the right, look to the left, and you can see both. They do things like "I am on the right, so I don't know about the left." or "I don't know the right wing because I'm a left wing." So they can't see the middle. You can tell right and left by looking at both, so you can tell in the middle. It's wrong to say it's "You are right wing." or "You are the left wing.". If you really want to be a leader, you have to look at both. You can see the center by looking at both. This time, the world turned to the right too much. The pendulum swings too far to the right, and it goes back to the left.

In Japan, Taro Yamamoto appeared. In the U.S., Elizabeth Warren and Bernie Sanders appeared. We swung too far to the right, so now we have to go very far to the left. Then, right now, the next presidential election will probably be Trump next year. The next one will be completely left. The next presidential election is completely on the left, and there's talk of a wealth tax, such as Ultra-Millionaire Tax. Today's Wall Street Journal was full of sadness. When Elizabeth Warren imposed property taxes, some people were taxed at over 100%. In any case, the world has turned too far to the right, so it's going to turn left. 

Well, the one on the left is not dictatorship. It was not a dictatorship like Stalin or Mao Zedong in the past, but I think the political and economic democratization policy of the Occupation forces in Japan after the war is a realistic policy. For example, Japan democratizes the economy and politics. The democratization of politics changed the constitution. In the case of economic democratization, they liberated farmland, dismantled conglomerates, and imposed temporary property taxes. Also, social security was improved in Japan. Specifically, after 1955. 

In short, it is to strengthen the power of the country. In other words, the government stops the tyranny of the rich and wealthy, and the government takes responsibility for the distribution of assets and income. This is how the occupation forces worked. I can read it like that. Not only Warren, but Bernie, and maybe Alexandria Ocasio-Cortez, too. So, if I have to say something familiar, it's like a policy of the occupation forces. So, it is quite moderate or liberal. It's not a bad story. I think Taro Yamamoto is also like that. There will be a lot of changes in the future, but the consumption tax issue is just around the corner, and I think that line will be like the occupation forces. I think it's called economic democratization. Young people are far more supportive of socialism now, and young people embrace the idea of democratic socialism in the U.S., too. But socialism, as they say, is not Stalin or Mao Zedong, but I think that economic democratization and liberal seems to suit us as the best. In short, the world doesn't let individuals have their own way. It is said that society is responsible for taking care of everyone instead of leaving everything up to individual selfishness. That's why I think it's like the economic and political democratization policy of the occupation forces after the war.

Therefore, organizations that do not respect humanity cannot survive from now on. Politics that people cherish will swing to the left this time. The U.S. is great on that point. As we have seen this year, the CEO of JP Morgan told the American financial roundtable, " From now on, we will reject management that puts shareholders first". This is great. In the past, management was based on the principle of putting shareholders first, so "Solving social problems is not a company's job. Companies do it for profit. and let the government take care of the social issues", they were saying. "We make money, what is wrong?" is the principle of putting shareholders first. They deny it at this time. Politics for all stakeholders means management for all stakeholders, it means management for solving social problems. It means that as a company, they manage to solve these social problems. Solving social problems will become a company's job. It's coming back in the middle, the management of the company. In short, it starts from humanity. Because we take care of people, we have social problems. In short, the management of a company starts from human nature. Because we care about people, we have to deal with social issues. Since slavery is a matter of humanity, the story of "That's not good." can be the beginning of social problems. So is the destruction of the environment. Finally, social problems end up with people. In order for people to live happily and healthily, peacefully, social problems come to this. So, as we do, if we don't respect humanity, we can't manage. That's why there aren't any companies that are openly defending; Those company saying "Shut up, we're making money no matter what you say," were all gone. So, now that this is the trend, how should we shape it?

The new era of innovation and intergenerational succession

・Public activities supported by the people, blockchain, AI, and IoT after the collapse of the bureaucracy
・A person who opens the way to the future and someone who sustains and bears one
・A Healthy Nation is the Starting Point for Revitalization

Next year will be one big climax, but when thinking about the future exit, I think that nothing can be done without incorporating innovation and intergenerational succession. Blockchain, AI, and IoT are new tools to support public activities after the collapse of the bureaucracy. Blockchain is the role of management. AI is the role of judgment. And IoT is the reporting position. The order of blockchain, AI, and IoT is management, judgment, and reporting. Management, judgment and reporting are all done by machines. So there is only one person at the top. If there is a leader at the top, the management, judgment and reporting under the leader are basically done by the machine. 

Then, the problem of unemployment will come up first, so how should we let everyone work? On the contrary, the leader sitting at the top must be a great person, so how should we train great leaders? It's still an unsolved problem. This is not only a problem in Japan, but a problem all over the world. In short, this is a public support system after the collapse of the bureaucracy. This system covers various areas such as medical care, education, and of course management. It becomes a tool to create a society for citizens by citizens. The big companies, such as Facebook and Amazon are using this to make a mess of it and have been criticized in politics.

That's why human development is the biggest challenge, and we have to bring forward people who are pioneering the future. If the younger generation, at least people in their 40s or younger, do not go forward, it will be meaningless. Well, it's not the case that older generations don't have to do anything. Those who maintained Meiji were in their twenties and thirties. They were born in the Tempo era. However, the Meiji period went far ahead and they took the lead, but the people who actually shaped the Meiji period were all educated in the Edo period. The people who made Meiji were all educated in Edo period. In short, people born in the Edo era raised samurai. For example, the Sino-Japanese War was the first major war overseas fought by Japan. Most of the people under the command of that war were born in the Edo period. They were born in the Edo period, so they were born in samurai families. Or there might have been townspeople. In any case, people who were born in the Edo period would fight until the last Sino-Japanese War. Then, the Russo-Japanese War started in the Taisho era. Then people born in the Meiji period will come to the scene. They were on the front line. That's why they went like crazy. People who were educated during the Meiji period kept pushing forward, and finally Japan was defeated militarily. Japan was defeated in the war. That's how Japan's recovery started. All those people who did the postwar reconstruction were born before and during the war. The prewar and wartime people managed Japan's reconstruction and rapid economic growth to some extent. It was in 1980 that they all retired and handed the baton to the people born after the war. They had a bubble 10 years later and turned it over. The leaders in the 1980s were mostly born after the war. And we've wasted the last 30 years in this state. And it's good that people in their forties are appearing all over the world now. It doesn't start until people in their 40s and 30s come out. It's you who make the back. The leader in front of us makes it, but the people who actually do the work and get things done are the people who know the field. The top is running forward by making a model and setting a direction, but only people who actually know what's inside can move. Even if there are people who say, "I bought farmland. So we started to do some new farming," only people with agricultural techniques and skills can grow crops. Everything is the same. From now on, we have to be good at intergenerational succession, good at teamwork, and we all have to make it together. It's no good to have a strange old man sitting at the top now. At the top, young people at the top with young energy open will open up new avenues. From now on, adults will support them from behind. This is the normal shape. We have to change it to that. No matter how I look at it, I think Japan is in a leader recession now. The other day, a newspaper reported that large companies and listed companies had 506 trillion yen in cash on hand. Japanese listed companies have more than 500 trillion yen in cash on hand. If we have 500 trillion yen, we can do anything. That amount is like the annual GDP of Japan. Listed companies have more than 500 trillion yen in cash on hand to the point of being able to say, "Ladies and gentlemen, this is a one-year paid leave from the Japanese business community." or "Here's your New Year's gift money. Everyone in Japan can play." Also, the yen is very strong in this situation. For example, if a bank moves or manages to move, since Japan is the largest creditor country in the world, the domestic crisis is the cause of the strong yen because it sells its overseas assets and returns money to Japan. As long as the yen goes up, prices will not go up because of deflation. Then, the value of cash will increase. You can keep your cash, so you have money to spend. That's why Japan should create a real investment bank. We have money, we have people, we have needs, so we should think bigger. If you take a bigger stance and form a bigger team like Meiji Restoration or Showa after the war, it will surely be revived.

Compared to Japan, the world is one step behind. It seems like the real bubble burst, so it takes a little time. Japan fell first, so the scum of the old days is gone. In that sense, Japan is a bit advanced. It would be the Reiwa era to manage that. I think the next goal is to become a healthy country. Not only in Japan, but also all over the world, what people care about is health. When I see the protesters in Hong Kong, they throw tear gas, but it can cause health problems and make women unable to be pregnant. The same fight is very different from the old days. 

Therefore, it's a mixed blessing, but it's moving. The thing to keep in mind is that when a crisis like the Lehman Shock occurs, it's likely to be the biggest factor causing an extreme recession in your work. That's why it's not someone else's problem. A huge financial crisis is most important in any industry, in any region. From the moment it happens, it becomes a full-scale depression. The trigger is probably a financial crisis like this, so please keep an eye on that.

Q&A

Question：Isn't China selling gold yet?

Gold is sold several times. It has been sold recently several times in the past when they have financial difficulty. It's not for sale. They sell and buy again. Gold is one of the few assets you can give up when you are really panicked. If you look at the gold market in dollars, you can see. (CFDs on Gold US$/OZ) The gold market for the past year has gone up last December. I think Chinese bought it because the market was going up. They bought it, so the market went up again. From there, there were selling points. When they were sold, they put it back, and again when they were sold, they put it back. There were a lot of sales. I don't know if the seller is buying it back, or if the seller and the buyer are different, but gold is selling like hot cakes and is in a downtrend. So, in a big market, gold is sold more. It's going down, isn't it? After all, the cash flow is getting tight. This is from summer. It is from around August to the middle of September, so I think the crisis is related. After all, Chinese people are getting stuck with money, so they return it somewhere, but you can see that it comes more and more periodically.

Question：Can China repay the dollar by selling gold?

I don't know, but I think the dollar's debt is enormous. That's why I don't think they can repay the whole amount even if they sell gold. Rather, small investors, companies, and funds have gold because they think they won't buy it anymore, and they can sell it in an emergency. It means that they buy and hold it just in case for cash flow. So if I look at the country as a whole, I think it's not enough for the dollar debt.

Question：What should ordinary people do to deal with Japan's hyper-deflation and the financial crisis? What will replace the postwar farmland liberation and the dissolution of zaibatsu?

Cash is the most valuable. That's why a bank savings account is fine. You can use a savings account and a chest of drawers, and cash is enough. On the other hand, stocks will go down, so I prefer not risk assets but ones with the same principal. But the scariest thing is that there will be no jobs. Companies get stuck, then jobs get stuck, and the unemployment is the biggest problem, and there is a possibility that the salary will decrease. Well, in order to do it in earnest, it is not a New Deal policy, but a massive new investment should be launched by the government, and private companies should participate in it and invest in advance anyway. There is no real way other than making an advance investment and absorbing it there. As long as they can't do that, they'll just live in survival mode, paying cash. In the midst of the recession, especially in the current listed companies, management will have to take responsibility. That's why most of the current managers quit and take turns. The point is what kind of person will appear as the replaced manager. Fate is very different depending on whether you are a manager who can't do anything, or a person who makes the next investment by introducing new things because the times are moving even in a recession. 

A recession means that if you have cash, you can live without saying anything. But there's no future ahead of us, so we can't grow unless we have a leader who can make new investments, educate, hire people, even in a recession. It depends on the leader. Honestly, this time around, the big companies are pretty decaying. For example, heavy industry. Isn't the heavy industry falling down together? And the big banks. It really depends on whether they do something proper or not. I'm rather pessimistic about big companies. On the other hand, small and medium-sized companies or owner-managed companies are easier to do. But it is still difficult without a successor. If they don't have a successor, they can't get through next time. That's why, frankly speaking, there will be unemployment problems at first. As a result, it's not that easy to change and unemployment is high.

Of course, there is no special demand for the Olympics anymore, but I can't say there is no possibility that the economy will be boosted suddenly. I can't say it's 100% pessimistic, but if we do it normally, we'll have a recession. That's where companies make their own efforts. In the end, the government should reform itself and invest in the full-fledged revitalization of Japan, just like Kakuei Tanaka did. That's probably the only way.

And about economic democratization. One is the disposal of stocks. For example, they could make it a shareholding company. There is an argument about whose company it is. There are shareholders now, and they do it according to the amount of money. However, if the trend toward socialism continues to spread, I think that even if there are donors without rights, such as NPOs in Japan and NGOs overseas, all concerned parties will start to discuss the issue. So, there may be no merit of stocks because shareholders can't do as much as they want. Then, they'll leave the stock in the fund or they'll split it up to the stockholders. If they become employee shareholders, they will be able to share the goodwill. If they work hard at a company, their personal assets will increase, so they will be able to share the goodwill.

Also, there is a possibility of dismantling Facebook in the U.S. For instance, big companies are going to be dissolved and divided into smaller companies, venture companies will increase. That is a kind of democratization. I think that alone has a big impact. The rest is temporary property tax, such as the wealth tax that U.S. says.

Question: In the U.S., only people over 70 years old such as Biden, Warren and Sanders are appearing as leaders. In Japan, there were strong experiences in Meiji and after the war, so I think leaders appeared. In Japan, there were people who had strong experiences during the Meiji period and after the war, so I think leaders came out. Will there be a real leader when the economy collapses this time?

In conclusion, I think there will be good leaders. In the United States, Trump is in his 70s, so if the opponent doesn't send people in their 70s, they will be beaten by Trump. But the next president is not them. There are young women of the Democratic Party, like Alexandria Ocasio-Cortez and Ilhan Omar. People like them are the next leaders. In short, since Trump is doing it now, it is necessary for elderly people to come out to compete, but it is just like the end of Tokugawa Shogunate. The lord of the major domain came out, and the Tokugawa and Hitotsubashi families all came out, and they were elderly people. Since the elderly work hard, it progressed to the Meiji Restoration. So, after the Meiji Restoration, young people such as Iwakura appeared. It's before I go there. We're at the stage before we go there. The matured people, the elderly leaders, have come to conclusions. That's why those people with experiences and authorities are doing it now. From now on, people like Cortez will be touching the baton. In the next four years or so, a generation like Cortes will receive the baton.

We wonder what leadership is. When the world changes whether it's good or bad, new leaders are born. For example, who thought Trump would become president? It was beyond people’s imagination. He works strangely well. When the time comes, the leader comes out. Since Trump prepared and said his policies, he continues. He is continuing because he has good policies and supports. It's not because he's doing whatever he wants. So even in Japan, if we don't do the work now, no matter who comes out, we will fail. It becomes a popularity vote like "I like that person who is an entertainer!". We won't be able to continue doing things like a popularity vote. So we have to have people who understand things well and make good plans now.

Our lectures have taken place every month since 2015. The coming schedules are as follows:

・第17期／2019年10月〜2020年9月開催イベント日程 | 認定NPO法人 日本再生プログラム推進フォーラム