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[FEATURE] Which Country Will Collapse First - China, Japan or America?

It all started when I stumbled on this controversial book titled The Coming Collapse of China.

Until then I hadn't imagined that there could be an author specializing in the unscientific field called political "science" who, like management gurus such as Michael Hammer or Peter F. Drucker, wouldn't take it for granted that when the subject entity is big enough, it should be considered as a going concern.

As I wrote in those days, I didn't really care about the fate of China. Seven years later, I still remain that way because where the country is heading is basically none of my business. Recent rumors on the Web have it that Gordon Chang, the author of the book, has now revised his prophecy, saying the collapse will happen in ten years from now if not in 2011 as he originally predicted. My take on the rescheduling is: who knows, and who cares?

I still remember writing a long mail on March 1, 2003 to Mr. Chang. The subsequent exchange of views between us in more than 2,000 mails and one face-to-face talk at a sushi bar in Tokyo's Roppongi has helped me transform myself from a retired businessman into something else. As of now I am still unable to tell the name of the shore on which I was washed up.

Yet, I think I can give you some tips if you are a proponent or an opponent of any collapse theory.

There are two important questions you must ask yourself before discussing the probability of China's collapse, Japan's or America's.

Question 1:

"Am I planning to take specific steps to expedite or prevent it, or just forecasting about something I can't really internalize?"

As I wrote earlier this year, plans are one thing and forecasts are quite another. It is true that forecasting is an integral part of a plan, but if you remain uncommitted to your forecast, you can't call it a plan.

And if you are only betting on a horse, instead of jockeying yourself, you should know the fate of a nation has nothing in common with the result of the horse racing.

The same applies if you are a weatherman. You've got to be an idiot to claim you can foretell the weather of the day one year from now because you are equipped with state-of-the-art supercomputers hooked up to meteorological satellites.

You may still insist that you are committed to something or someone. But hold on a second.

The single most important thing to understand is that you can never commit yourself to faceless people or those living thousands miles away from your hometown. All you can actually do is to tweet, like a little birdie, about the doomed future of China, or the endless supremacy of America, for that matter.

Question 2:

"How do I define the word 'collapse'? Does one of those regime changes deserve to be called a collapse?"

Another way to ask about the same thing is: "Would I readily declare a brain-dead person dead?" If you wouldn't, you should drop all your argument for or against the collapse theory at hand.

In this "globalized" world where state-of-the-art life-support systems are available everywhere at affordable prices, it's highly improbable for any nation-state but tiny banana republics to literally fall apart.

With these questions always in mind, I started writing a book which I would have titled The Unviable Japan two and a half years ago. In retrospect, I suspect the American literary agent might not have pissed me off the way she did if I had thought about titling it The Coming Collapse of Japan; she wouldn't have been upset so much because then I was just forecasting Japan's future while remaining uncommitted to anything.

In fact I wanted to declare my former home country already dead, or at least, terminally ill. That is why the American woman with helplessly superficial, piecemeal knowledge about the country dismissed me as an oddball, though in a nice way.

Still today, a schizophrenic, surreal sense of attending the deathwatch of the country where I was born haunts me day in, day out. Last Saturday, Prime Minister Naoto Kan told his immediate predecessor that he wouldn't quit if his approval rating should hit 1% - which is not really unlikely - without giving any specific reason to hang on.

So the answer to my own question about which country will collapse first is: "It's Japan." Nobody can be mistaken because the country has already crumbled. I am 120% sure about my observation no matter how Japan "experts" in the U.S. doubt it. While they always substitute their hubris for profound knowledge about the Japanese language and history, this humble blogger has lived these turbulent years in Japan since 1935.

Who comes the next? Obviously it's not China because if the country of Confucius should collapse sooner or later, it would be coming at a glacial pace. In the meantime the United States of America will have exhausted its "last best hope" by 2014 when the Republican president, Sarah Palin or whoever it is, may or may not lose ground to the Democrats once again.

But once again, who knows, and who cares?

You better mind your own fate.

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[FEATURE] Which Country Will Collapse First - China, Japan or America? | 6 comments | Create New Account
The following comments are owned by whomever posted them. This site is not responsible for what they say.
Which Country Will Collapse First - China, Japan or America?
Authored by: samwidge on Tuesday, November 30 2010 @ 08:59 AM JST
As always, Mr. Yamamoto, you are extraordinarily perceptive.

However, in the matter of "collapse," you, Dr. Gordon Chang and I have been late in noting the changes.

My own country, the United States of America, continues its collapse in many dimensions. Each of those dimensions is barely noticeable.

But wait! It is when you see them all as one that you are surprised.

Take investment, for instance. This is as a larger sign of collapse and construct, a larger sign of shifting moral/work/political values. The good old USA in recent years has been the object of foreign investment on a massive scale. We are not talking “melting pot” here. We are talking foreign.

Only the good Doctor Chang can describe this fully for us.

Our journalism industry is under Arab and Australian leadership. Thereby our very concept of what is and is not American is only a shimmering mirage over the desert sand of economy. For the first time in a century, more invention is happening outside the United States than within.

Those foreign investments have long suggested world peace and world understanding (but they only suggested those things – they didn't do them).

The respected "Penny Fortunes" newsletter, an institution that suggests to readers how they may best invest their retirements, reminds that Russia and China are abandoning use of the dollar in favor of alternate currencies. That nearly went by me as I figured that it didn't matter whether we used euros, pesos, lire or dollars.

Turns out it does matter. Bigtime!

(As a finance expert, you might suggest that all the so-called “Free World” unite with the Euro?)

In the American state where I live, Montana, large scale Russian mine investor, MMC Norilsk Nickel, is selling off its stock in America's only serious palladium/platinum producers. That may mean that those mines will lose proper support and many thousands of American jobs will be lost. A massive arm of American power will dissipate.

The call to “Abandon ship!” has gone out.

Norilisk has long been accused of crooked dealings but, and this is essential, the peoples of other nations play life's games by different rules. We must always be prepared for things we think absurd.

Politics has always interested you. Justice and repressive governments have always interested Dr. Chang. For my part, I wonder about the sum of it all. Where are our children heading?
Which Country Will Collapse First - China, Japan or America?
Authored by: Y.Yamamoto on Friday, December 03 2010 @ 12:43 PM JST


It's been more than 15 years since the days I was buying and selling currencies and other financial instruments. But I think the investment angle you've brought in here is quite relevant to the collapse issue.

If I were given a credit line of JPY120 million at a Japanese bank, I would max out on it immediately. Then I would buy EUR1 million against this JPY120 million and invest the total amount in real estate somewhere in Germany although as a financial manger I normally refrained from putting all the eggs in one basket.

Three years later, Japan's financial market melts down and the yen plummets to JPY240 against the EUR, which means that if I sell the real estate at cost and convert the proceeds back into the local currency, I will get JPY240 million, of which I use JPY120 to repay my debt to the Japanese bank.

In the 3-year period I have paid the interest to the bank and property taxes to the German authority, but these costs haven't totaled any more than JPY20 million. The bottomline is that these transactions have netted me JPY100 million.

I think this serves as an acid test of the seriousness of one's theory about the collapse of a nation. If he is serious enough, he doesn't have to use his brain to develop and commercialize any new product, or write a book about the coming collapse to earn this much.

Yu Yamamoto
[FEATURE] Which Country Will Collapse First - China, Japan or America?
Authored by: Diogenes on Friday, April 22 2011 @ 09:10 AM JST
It's been over six months since this article was posted. Here's a prediction of collapse based on a 1991 article. He's basing his "collapse" on a likely event, an earthquake.

Then we have this article on the BRIC countries dumping the U.S. dollar and making a collapse prediction. But this guy appears to be a seller of precious metals, so clearly there's a bias built in. Nevertheless, yesterday or the day before, gold topped the $1,500.00 mark and is inching toward $1,510.00 today.

Maybe one of the Kwaidon stories will help me figure out what's coming.
[FEATURE] Which Country Will Collapse First - China, Japan or America?
Authored by: samwidge on Friday, April 22 2011 @ 05:32 PM JST


You are an astute observer. I don't think that anybody can do anything for the great mass of society but we can do for ourselves and our kin.

You don't need to worry about any bias on the part of the precious metals merchants. They wouldn't be in the game at all if it didn't pay. I bought a little silver two years ago and within two weeks from today it ought to cross another barrier and be quadruple the price I paid.

In Montana where I live, our people are used to silver. You can buy things like new cars with silver rounds right now. Gold is a little different story because it is so small and hard to keep in a pocket. As we used to say in north Idaho's Silver Valley, "silver shines."

The links you have given are remarkable. Thank you very much.

[FEATURE] Which Country Will Collapse First - China, Japan or America?
Authored by: Diogenes on Saturday, April 23 2011 @ 10:23 AM JST
Precious metal seller Monex is out of silver according to this YouTube video posted 04-22-11
[FEATURE] Which Country Will Collapse First - China, Japan or America?
Authored by: samwidge on Saturday, April 23 2011 @ 04:03 PM JST


I have said it before and it remains true; you are an astute observer.

I was a miner for some years, both silver and gold (and lead and zinc as well). The business has always been feast/famine for the miners but everybody in the industry knows that the long-run is the correct way to play the precious metals game. It certainly proved true for me though I have had very little to invest.

I checked two years ago with Sunshine Minting in Coeur d'Alene, Idaho. Supply was sphinctering off at the time and I was told that I could buy at "spot price" if I would make a $6,000 purchase. I could not do so and I therefore went elsewhere and paid a modest premium. Even at that I did far better than if I had purchased "collector" coins. Decorative silver is nice to see but that is a poor way to invest.

The mint also said that I needed to make my decision promptly. Otherwise the mint could only take orders and fill them as silver came available. I would be willing to do it that way today if I could. You pay in advance and get your silver at the price named when it becomes available. That's fair.

You and I are getting a little off Mr. Yamamoto's TFP main topic but it remains that he is exactly correct: Government is failing. Confidence in government is at an all time low. It is silver that confirms this.

In the US we have a habit of watching the surveys. The price of silver is far more telling than anybody's survey. When the price of silver goes up, the rest of the world is going down.

The fallback position now that government is tumbling and silver is scarce is to buy stock in the silver miners. I have chosen those of north Idaho's Silver valley, Hecla, US Silver and Coeur d'Alene Mines. There certainly are other sound firms. The big ones like Carlin, Barack and Noranda come to mind. BP/Amoco was once a gold miner but that field became troublesome and the firm's capabilities there are no longer discussed.

Prices of mining stocks should begin climbing sharply now, further suggesting lack of confidence in governments. The problem in stocks now becomes the concern about what might happen if government goes belly-up. Those stocks will be hurt and the hurt will happen without warning.

If the price of silver is indeed an indication of government collapse, then the big news is still ahead. When silver went from $12 to $30, in two years, there was only minor alarm. Now, the industry prediction is that silver will easily go to $150 and that will happen within two more years.

If that isn't startling enough, some of the most respected analysts are talking matter-of-factly about $250 per ounce. Especially disconcerting is their claim that the gold/silver ratio is temporarily out of balance. They are saying that if silver were at its proper price in comparison with that of gold today then, when you consider inflation and history of the two metals, then silver surely ought to be significantly above $600 per ounce.

It gets worse: Gold remains primarily a decorative metal and mostly good for investment purposes like jewelery-grade diamonds. Silver is a working metal. Even if it were not popular for investment, this metal is required for industry. Silver is used everywhere. The stuff is even used for water purification. When people run out of money to buy gold, they must buy silver.

As to where all this will go, I do not know. I am only glad to have lived in my own troubled generation and wish my grandchildren did not have to face this next one.