Nightmarish scenarios of the coming financial collapse

TOKYO —

After the Great Kanto Earthquake of 1923, notes Dokkyo University economics professor Takuro Morinaga in Weekly Playboy (March 5), Japan suffered a financial panic two years before the New York Stock Market crash of 1929. That precipitated the depression of Showa, with a drastic fall in property values and mass unemployment. Farmers, unable to cover their costs, sold their daughters.

Japan’s current recession, says Morinaga, was set off by the Great Hanshin Earthquake in January 1995, after which an increase in the consumption tax from 3% to 5% resulted in a drop of 40 trillion yen in Japan’s nominal gross domestic product.

The next increase in the consumption tax, planned from April 2014, ignores the lesson of history, and Morinaga predicts that within that year, a financial panic could very well ensue.

The magazine then offers its darkly pessimistic scenarios of an economy in tatters, in which one out of four workers is unemployed, and for part-time workers, hourly compensation will plummet. Employers will not even reimburse them for their transportation.

With government revenues drying up, there will be mass layoffs of civil servants as well. Public works projects will come to a screeching halt, and as budgets for education, the arts and culture dry up, Japan’s national treasures will deteriorate and crumble.

The age from which workers begin collecting their old-age pensions may be pushed back to age 75.

Meanwhile, public services like fire and rescue, and refuse collection will vanish, leaving the cities resembling a war zone.

The national health insurance scheme will also face collapse, which means patients’ out-of-pocket costs will rise by 20% or more.

What else? Foreign companies will buy up Japanese firms for a song. The defense budget will be slashed, and Japan’s already weak diplomacy will become completely dysfunctional.

With declining value of the yen, consumers will face hyper-inflation. Imagine a humble bowl of ramen priced at 2,000 yen. And the consumption tax, which is set to rise to 10% by 2015, will go up yet another 15%.

It gets even worse: with collapse of the banking system, individual assets, including savings accounts, will be frozen. (Readers are advised to spread their assets between two or three institutions.) It might come to the point that people barter their gold jewelry and other valuables for food—as was done after the Pacific War.

A severe pinch on energy will see a living standard resembling that of North Korea, with no electric power for up to 12 hours a day, and TV stations signing off by 10 p.m.

Meanwhile, the police will have their hands full. Incidents of armed robbery and rape will soar. The clearance rate for all crimes, which is currently a low 31.4% nationwide, will fall further. With the prisons overcrowded, nonviolent offenders will be released; once on the outside, they will repeat their crimes.

With no budget for fuel, police patrols will drop off, with koban and police sub-stations mobbed by unruly crowds. As urban koban become unsafe places for cops to eat or sleep, they will be left unmanned. Driven to desperation, the strong will prey on the weak, with public safety plummeting. Once the sun sets, Japan’s towns and cities will be scary places indeed.

As bad as all these may seem, they could get even worse.

“If we slip even slightly,” Morinaga warns, “we can imagine a situation where Japan takes a direction similar to the 2-26 Incident (the bloody Feb 26, 1936 coup d’etat attempt by a radical army faction).”

With the economy no longer able to sustain people, what can Japanese do to ensure their own survival? Weekly Playboy suggests five precautions to be taken. First, find ways to market skills that are likely to be popular with foreigners, such as a chef’s license for sushi or kaiseki ryori. Second, they should work out and improve their physical condition, such as through training in the martial arts, which will give them a better chance when and if public order collapses. Third is for young people to keep close ties to their parents, who may be needed to offer support. Fourth is to become adept at English, although other foreign languages, even Chinese, may help. And fifth is to seek 100% self-sufficiency through an eco-oriented lifestyle. Raise your own chickens, catch your own fish and live off the land!

  • 1

    Laguna

    Wait - rape? What?

  • 5

    gaijinfo

    Japan’s current recession, says Morinaga, was set off by the Great Hanshin Earthquake in January 1995

    There's lots of reasons for the lost decade: too much spending on public works projects, collapse of real estate bubble, collapse of stock market bubble, I don't think the Earthquake is a large contributing factor.

  • 4

    gaijinfo

    I also like how economists point to war as an economic stimulus, yet point to natural disasters as the opposite. They are both times when a lot of stuff gets destroyed. Both are bad for economies.

  • 16

    choiwaruoyaji

    The most scary threat is to ramen... 2000 yen a bowl! We could never live like that!

    And if the TV stations shut down early, we can't even watch other people eating ramen and saying oishi....

    Unthinkable.

  • 1

    Virtuoso

    As far as Japan's concerned, if Iran were to shut off the Strait of Hormuz, this could happen within months, if not weeks.

  • 3

    gaijintraveller

    Readers are advised to spread their assets between two or three institutions.

    Change "institutions" to "counties" and it will be better advice.

  • 3

    ExportExpert

    Will be digging up both my AK47s, ammunition, survival kives, the gallons of water, rice and tinned food I have buried over the years, then setting up a food stall selling bowls of rice for what ever gold or diamonds people have.

    The story is a bit extreme really. Can't see it coming to the extent the author seems to fantasize about. but i aint taking no chances haha

  • 1

    mctavish

    Fourth is to become adept at English, although other foreign languages, even Chinese, may help.

    Using a greater variety of conditional language and more modals, might be an area to focus on. The article expresses a great deal of certainty - it will happen?

    Readers are advised to spread their assets...

    Thought this was in Playboy. Sounds more like Razzle.

  • 2

    Virtuoso

    Long before the crash of the bubble economy the media was already crying wolf. I think the explanation for this is that Japanese never anticipated their country would ever become so affluent, and still pinch themselves occasionally to make sure they're not dreaming. Because too much of the world's economic fate is outside Japan's sphere of control, they see their prosperity as transitory and are resigned that someday it will all come crashing down. I'm not saying it won't, but I would like to see Japanese having a little more confidence in their own resilience, which has held them in good stead over the past century and a half.

  • 0

    Serrano

    This is foreboding.

  • 5

    DentShop

    Interesting article. I cant see it coming to these kinds of extremes.

    Since this article was incapable of doing it - I will present some positive thoughts.

    Initially, the Japanese will cut back on stupid purchases like designer bags, couture, cupcakes for their pets, pachinko, and idol CDs.

    Idle farmland will be put back into use and with proper management, the country will become self-sufficient in food. Imports of useless things like sugar and coffee will cease and the publics health will improve.

    Barely anything will be wasted. PET bottles and plastic bags and anything watertight will become essential and reused over and over again. Clothes will not be thrown away unless unwearable (no - corduroy is not unwearable, just not cool)

    Japans main cities have an advantage due the ease of cycling and network of highways. Even if trucks are not available, goods will still be shipped by bicycle, just slower and essentials only.

    The depreciated Yen will be mostly disregarded and a "LETS" based system will support local areas who are skilled and have resources but little money. Japan has a very skilled workforce and well-established institutions. Just because the economy is bad, it doesnt mean these important factors will be lost.

    Japans centralised and stupid government will become irrelevant and local areas will become self-governing and will no longer rely on "gasoline-less police." Rather, local volunteer militias will be formed to protect the surrounds as well as Japans national treasures.

    Women will play important roles in the local economy by becoming the backbone of local manufacturing. The loss of public service jobs (women will be the first to be sacked, this is Japan) and will pool their talents, time and knowledge to produce clothes, furnishings, metal goods, gardens, candles, soaps and crockery.

    The military will be reduced by the central government but martial law will be impossible due to the sheer numbers of Japanese people. The militaries of China and North Korea will have no inclination to attack Japan for the same reason and because their own situation will be just as perilous.

    The Japanese will never allow themselves to become Somalia. The pride of this nation has brought it to where it is today and it would be like saying that one day Donald Trump would be on the street living under a bag. Too much knowledge and too much honour.

  • 6

    bellsmyre49

    Farmers, unable to cover their costs, sold their daughters.

    Hmmm I wonder what the going rate will be - I might get me a couple.

  • 4

    paulinusa

    What about the price of beer? Now that's something to worry about.

  • 0

    multitasker

    Interesting, but mostly rubbish. Like watching "Collapse." Anyway, I was waiting for the part about how short the short-skirts will get, and how much a couple of hours at the local soapland will cost! ))

  • 6

    mikemiro

    interesting that Prof Morinaga used an established economics journal like Weekly Playboy to publish his fact-based, data-driven financial outlook. I'm sure his article was placed alongside the AV Idol centerspread to capture the intellectual, business-savvy target readers who, I'm sure, are the principle subscribers to this credible & highly reputable publication.

  • 4

    kurisupisu

    'Raise your own chickens, catch your own fish and live off the land!'

    Not much chance to do that in Tokyo....catch a few other things though!

  • 13

    zichi

    I've been listening to these kind of stories or predictions for over four decades.

  • 3

    edojin

    Here's a sixth precaution: Don't return the LDP to power. If the LDP grabs the reigns again, the above nightmarish scenario might prevail.

  • 3

    tsukki

    Weekly Playboy? Seriously?

  • -2

    JapanGal

    Weekly Playboy=The Economist...... Ahhh high class. What about Hussler. I just read about that trash

  • 2

    tmarie

    'Raise your own chickens, catch your own fish and live off the land!'

    Ha! Tell that to people in urban areas - I'm not allowed a dog in my apartment let alone a chicken! And fish? From one of the rivers here? Hahahaha!! Springfield and the three eyed fish come to mind. The rivers in urban areas are disgusting and certainly not safe with regards to consuming anything caught in them.

  • 2

    choiwaruoyaji

    What about Hussler.

    Hustler

  • 4

    7777777

    Another Y2K story. These "total collape" stories come with each generation creating all sorts of unnecessary scare tactics.

  • -14

    j4p4nFTW

    Japan will of course be fine. It is one of the top economies in the world, with vibrant work and educated work force. The one thing that can save Japan now is the LDP.

  • -2

    serendipitous

    Excuse me while I go and shoot myself!

  • 0

    sunhawk

    quick everyone to new zealand!

  • 1

    Serrano

    "What about the price of beer?"

    No worries, Kirin has just released the best daisan beer ever, "Mugi no Gochisu."

  • 4

    Johannes Weber

    Sounds like the professor tried to write the sreenplay for a Japanese trash-TV apocalyptic-future scenario, but was rejected. So he had to take the "Weekly Playboy" to publish it. With such an outlook, this guy is just a poor sob without any hope. Watch out for this professor. When Your trains are delayed the next time, he might be responsible for it.

  • 1

    NeoJamal

    Second, they should work out and improve their physical condition, such as through training in the martial arts, which will give them a better chance when and if public order collapses.

    Does the author suggest the North Star Fist style or the South Star Fist style? Personally I like the South Star Waterfowl Fist sheeeewwwwwww!

  • 0

    SuperLib

    Meanwhile, public services like fire and rescue, and refuse collection will vanish, leaving the cities resembling a war zone.

    I kind of like it how he throws this in there after mentioning that employers won't even pay for transportation anymore...heh.

  • 1

    tkoind2

    Reality is that in 2008 and again recently the world teetered on the brink of a global depression. In that case some of these predictions could come true. But Japan alone falling into a Somalia like state? Unlikely.

    Is consumption tax a bad idea? Yes! As it does indeed ignore the potential mountain of negative results upon the economy here. People stop spending, companies have to cut costs and staff, unemployment rises and social benefits burden increases. Nasty viscious cycle is possible here.

    Does Japan need to do something to change? Yes, but that needs to begin with serious cost cutting and with serious revisions to spending controls that can assure the public that government is and can do what is necessary to fix things. Then you can raise taxes a bit. But not dramatically.

    But it is good advice that Japan think about the worst case if we are to take the risks seriously and try to improve the nation.

    And I sadly do agree that a right wing revolution by nationalist would be the most likely outcome should a collapse come.

  • 0

    tkoind2

    Artists have little other choice in many cases. We need to eat and live too.

  • 1

    Mark Bradley

    If anyone wants a preview of what any country will look like then just check out Greece. A few things happened: rioting, arson, flight of capital from banks, wild currency swings and high unemployment 30%+.

  • 1

    Himajin

    And fish? From one of the rivers here?

    Ha,ha, fish from the Dotonbori, spawned amid the rusting bicycles ;-D I know, they're cleaning it up....

  • 0

    hameln

    Then you have to watch "Mad Max" trilogy to help you prepare yourself for new society. (Or "Violence Jack" trilogy, if you don't have access to foreign films anymore.)

  • -3

    JapanGal

    Japan’s current recession, says Morinaga, was set off by the Great Hanshin Earthquake in January 1995, after which an increase in the consumption tax from 3% to 5% resulted in a drop of 40 trillion yen in Japan’s nominal gross domestic product.

    Hey NODA!!!! Read the above.

  • 0

    midnull

    All I need is a couple of acres in the middle of nowhere, a horse for transportation, some chickens, and a fishing rod. Maybe a cow even! Gotta have my milk on tap! Now that's life. No worries about economy, money, etc....ah yeah bliss!

  • 0

    SpeakJaplish

    Any links to the original article?? Would like to read the Japanese version. Thanks in advance.

    Moderator: The magazines do not post their stories online.

  • 1

    avigator

    Just a pessimistic scenario. But things could really turn for the worse in difficult times. In the old days people managed to overcome economic difficulties when family bonds were strong. I am not sure about reliance on friends in Japan because I have not been able to see the kind of strong friendships people forge in other countries. But definitely the safety seems to be disappearing little by little.

  • 0

    garomakaikishi

    the prof must be a quak! another doomsdayer about to be proven wrong

  • -1

    tamanegi

    Wonderful piece! Can't wait for 2014!

  • 0

    kbmozart

    Will make sure that my daughter chooses a different university

  • 0

    Nessie

    Don't we have enough in-house scaremonging and panic on Japan Today without having to import it from a rag like the Weekly Playboy? (Readers of the Weekly Playboy, don't answer that; it's a rhetorical question.)

  • -1

    MaximumMan

    who takes advice from 'weekly playboy'??? lol

  • 0

    Kabukilover

    So how do you get chickens if your bank account is frozen?

Login to leave a comment

OR
  • 海外営業事務

    海外営業事務
    株式会社セドナエンタープライズ、Tokyo
    Salary: ¥220,000 ~ ¥400,000 / Month Negotiable
  • African Speaking Sales manager

    African Speaking Sales manager
    JPC TRADE CO.,LTD. (株式会社JPC)、Tokyo
    Salary: ¥200,000 ~ ¥450,000 / Month Negotiable Basic Salary + Incentives
  • Recruitment / HR Generalist

    Recruitment / HR Generalist
    Temple University, Japan Campus - テンプル大学ジャパンキャンパス、Tokyo
    Salary: Commensurate with experience plus transportation from/to TUJ
  • Program Assistant

    Program Assistant
    Temple University, Japan Campus - テンプル大学ジャパンキャンパス、Tokyo
    Salary: Commensurate with experience plus transportation from/to TUJ
  • Portuguese Speaking Sales Manager

    Portuguese Speaking Sales Manager
    Autocom Japan (オートコムジャパン株式会社)、Kanagawa
    Salary: ¥270,000 ~ ¥800,000 / Month Commission Based

More in Kuchikomi

View all

View all