As we enter 2023, the rise and fall of Japan may be a harbinger of things to come for the world.
First China, which is on the verge of following on Japanese footsteps: The closing of the American technology pipeline, the rapidly evolving shape of the age pyramid and the bursting of a giant real estate bubble.
But at a higher level, the whole world now resemble the Japan of 1989: The end of a growth period built on the global supply chain and semiconductors. Financial assets running ahead of real assets with the consequent creation of a giant market bubble ready to explode just as the lack of energy and raw materials makes the next growth cycle impossible to quick-start.
It goes further as the West, just as Japan did in the 1980s, decides to invest massively in the wrong technologies which will hamper instead of foster the next growth cycle. In the case of Japan, it was the 5th computer generation, rockets and robots which all came to little more than the Sony Aibo dog while absorbing huge amount of capital.
Now it is our obsession with green technologies which are neither green nor leading to the "better" world people expects since you simply cannot run a modern, efficient economy based on diluted and intermittent energies such as wind and solar. Or electric vehicles which although they may be ideal for some limited applications are in no way capable of replacing our current fleet of cars and trucks.
It takes insight and foresight to chose wisely how to aim in the right direction. The Japan of the 1950s and 1960s displayed this skill and created a prosperous country. The Japan of the 1980s and 1990s completely lost its mojo and crashed what was on the verge of becoming the most prosperous economy in the world. With this in mind, it is sad to see the whole world rushing head first into a blind alley which unlike Japan capable as it was to keep its social stability in the storm, will necessarily fare much worse as the clouds gather and the waves rise from 2023 onward.
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