Japan’s Lost Decade is China’s Future

Patrick Bet-David explains the economic impact of Japan’s Lost Decade and how it could shape China’s future. Discover the similarities and differences between the two economies in this thought-provoking video.

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Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.


So you know who should be watching this Video the folks at China she should be Watching this anybody that manages the Finances in China watch this video Because you're an identical Cas study to What happened to Japan so let's get Right into let me give you some crazy Numbers for Japan Japan is exploding 20 Years in a row economy's growing Sometimes double digits over and over And over again and then all of a sudden The bank of Japan which is their Central Bank like our fed just recently Increased interest rates for the first Time in 17 years yes you mean to tell me Their rates have been negative for 14 Years yes how is this even you mean to Tell me Japan the previous high of what Their Market hit Nikia 225 hit 39,9 on December 29th of 1989 and it Drops from 39,000 to 177,000 drops 60% The next couple years yes you mean to Tell me from 1989 the market of Japan it Doesn't recover to get back to that same Exact number till today yes what do you Mean by that I mean during covid Dow Jones got down to roughly 16,000 isn't Dow today roughly at 38 39,000 yes so You mean instead of recovering in three Or four years it took them nearly 89 to 2024 how many years is that 35 years yes But how good were they doing Pat in Japan I mean you're talking like these Guys were big numbers you're ready for

Some crazy numbers let me give it to you The Japanese property Market in the80s Was worth four times what US property Market was but that's nothing the Imperial Palace in Tokyo was worth as Much as the entire US state of California let me say this one more time All these Silicon Valley companies in California San Francisco take San Diego The expensive properties in San Jose in Beverly Hills all of those property Combined was worth less the entire State Of California than the Imperial Palace In Tokyo yes you mean to tell me from 1956 to 1986 the price of land increased By as much as 5,000% in Japan yes do you Also mean to tell me that the Tokyo real Estate could sell as much as 139,000 Square ft which was nearly 350 Times as much as Manhattan in the80s Trump's already in Manhattan 350 times As much as Manhattan land constituted 65% of Japan's national wealth Japan was Killing it then all of a sudden poof Everything changed why we're going to Talk about that Today all right so if you end up getting Value out of this video give it a thumbs Up and subscribe to the channel even if You're from China but let's get right Into it so Japanese economic Miracle Period span from 1945 to 1991 marked by Rapid and sustained growth post World War II to the end of the cold War

Japanese economy experienced rapid Growth after World War II becom a global Leader by the 1980s with the highest per Capita GDP there are many different Factors but these are four of the Factors according to Berkeley Economic Review on why this took place this Growth that they've had number one Technological innovation was a big Factor with what Japan did this is very Interesting by the way when you look at These contracts being signed so if you Look at from 1950 to 54 then 55 to 59 Not a big number and then boom 60 to 64 Boom 65 to 69 all this manufacturing by The way when you think about some of the Major companies when they got started Toyota 1937 Honda 46 Sony 46 post World War so this is like hardcore growth Innovation contracts being signed Technology they're leading the way and Everybody's following their lead then The second reason and the same article Is capital accumulation between 1959 and 70 the ratio of personal savings to Disposable income averaged 18.3% in Japan while it was only 12% in Germany And at the same time 7% in America 3 Improvement in both quantity and quality Of Labor the National Bureau of economic Research estimated that accounted for Nearly 30% of the post-war Japanese Growth and last but not least four Expansion of international trade

Strategic planning and cooperation Amongst firms individuals and the Government were key to leveraging these Three factors these efforts propelled Japan to become the world's third Largest economy the country's export lad Growth model attracted significant Capital and resulted in a trade surplus With the US and at this point to address The global trade imbalances Japan Participated in the plaza agreement in 1985 with other major economies the Plaza Accord was a 1985 agreement among The G5 Nations France Germany UK us and Japan the goal of the plaza Accord was To weaken the US dollar in order to Reduce the mounting us trade deficit and This led to the Yen and deut Mark Dramatically increasing in value Relative to the dollar an unintended Consequence of the plaza Accord was that It paved the way for Japan's last decade Of sluggish growth and deflation in Other words reverse market crash is what Ended up happening to Japan during this Time so so in other words think about it They're trying to weaken the dollar okay And by doing so Yen got so strong that Then all of a sudden they're like wait a Minute we're not getting a lot of people That are buying from us we got to do Something about this cuz us is not using The money to buy then they're like you Know let's cut rates so we can weaken

The Yen so we can strengthen the dollar But then when they cut rates in Japan People started borrowing more money I Mean it's just like this whole effect That's taking place to try to manipulate It keeps backfiring on them and this Eventually ended up to their downfall so Obviously this leads to Absolute Nightmare and by the way you may be like Why would that be a nightmare real Estate properties four times as much as Us you know the Imperial Palace in Tokyo Was worth as much as the entire US state Of California and 5,000% it went up in Japan and Tokyo real estate could sell As much as $139,000 per square foot which was 350 Times Manhattan isn't all that stuff Good things no that's what led to the Bubble that they had and then boom 39,000 to 17,000 within 3 years and it Took them 30 35 years to recover 35 Years to recover and that's again that's Called the L decade that they went Through was a pretty tough situation Japan went through and this became a Case study again why China should be Watching very closely to the decisions They may be making because similar Things may be happening to them very Soon and by the way you ever heard the Whole concept of quantitative easing Guess what country became the first Country to use quantitative easing an

Idea that was proposed by Richard wner An economist that we've had here before And we had a very interesting Conversation together you guessed it Right Japan became the first country to Use quantitative easing maybe us needs To learn from what they were going Through and we shouldn't have done it They did it in 2021 we ended up doing it since 2008 2009 all the way through Trump and then We sto with that and we try to do Quantitative tightening anyways long Story short that led to a very Challenging time for Japan with their Economy which led to socially family Struggling financially saying I don't Know if I want to get married and I Don't know if I want to have kids and I Don't know if I want to start a family How the hell am I going to pay for money In Japan if you look at Japan is known As the sexless Society this is a country That statistically they're not a country That I don't want to say they don't know How to have fun I've parted with a lot Of Japanese people they know how to fund But in Japan because of how the economy Was and what took place to them they Went through this phase and it was kind Of accepted until recently things are Kind of starting to pick up again which Why is the reason why they're raising The rates for the first time in 17 years

And by the way think about it this way What do you think Japan's debt to GDP Ratio is US's is 120 to 130% Japan's is 255 % just so you know what this means If you wanted to go right now and go get A loan from A bank and the bank is going To say I want to get a million doll loan You're going to ask I want a million Dollar loan no problem what's your debt To income ratio you know what banks look For 36% or lower if you're getting an FHA loan it's 43% or lower that means if Japan was a person that wanted to borrow Money you would say get out you're at 255 per. you would say the same to us as Well China claims are at 60% but nobody Believes anything those guys say and by The way I'm going to give you stat that You're going to be sitting there saying What the hell is this all about so in 1990 Japan's population was 123.5 million people 1990 that's 34 Years ago do you know what Japan's Population is right now 123.2mi what happened there's another Reason for it there's a book I was Recommended Years Ago by friend of on Byron Udell that became one of my Favorites called hypomanic Edge in the Book it talks about how America is 5% of The world population but represents 30% Of economic activity and the abundance Of people with hypomanic Tendencies Prepar to take enormous risks immigrants

Are more likely to be hypomanic I know a Couple of them like that Americans work More than any other country in the world But here's what's the part less shame And bankruptcy in America more likely to Bounce boun back after a failure in Other countries they're ashamed and They're defeated when asked if starting A new business was a respected Occupation by Americans and Japanese you Ready 91% of Americans said yes only 8% Of Japanese said yes deep disgrace Attached to business failure in Japan Population has lost inclination towards Risk after the market crash of 1990 That's like a kid goes play baseball he Gets hit once he goes 044 never wants to Play ever again because is's humiliated And he lost and he's afraid that's what Happened to Japan from 1990 till today So remember how this whole episode got Started I said pay attention if you're From China and your X right what's the Point Japan went through this they've Had a hard time recover after that loss China is going to be an interesting Story to see what they do and how they Recover and how they maneuver they've Been known for The Art of War and kind Of gamesmanship and all that other stuff So maybe they're a little bit more Strategic but if they're not too careful Same thing can happen to them as well no Matter how Behemoth of a country they

Are today if you got value out of this Video give it a thumbs up and subscribe To the channel and president G if you're Watching this maybe you want to have a Conversation you can find me on Manet Here's my QR code just use that any Question we can do a text a video or a Call together or anybody else that wants To discuss the specific topic we just Talked about I get back to you 100% of The time within one day on man and if You want to watch another video similar To this watch the video we did on China's population challenges the They're facing if you've not seen it Click here to watch it take care Everybody bye-bye bye-bye Bye-bye

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