An Economic Success Story Gone Wrong

Jason Hartman
5 min readOct 5, 2022

In the 20th century, Japan was one of the world’s biggest success stories.

During the previous century, Japan’s success was slowly being built. In the first half of the 19th century, Japan maintained its isolationist foreign policy of sakoku. That all changed with American Commodore Matthew Perry’s fateful naval expedition to Tokyo Bay in 1853. After Perry’s visit to Japan, the Japanese realized that they vastly lagged behind the rest of the West. In turn, Japanese leaders proceeded to send Japanese nationals to the West to study its best practices and later adapt them to fit the Japanese context.

Up to the middle of the 20th century, Japan quickly rose as an emerging world power that could potentially compete with the West. Its ascent was rather striking after having spent centuries in isolation. By the start of the 20th century, Japan became one of the great powers on the international stage. Even with their impressive economic gains and successful military campaigns against a declining China and imperial Russia, the Japanese were not satisfied with their progress. The Japanese desired more land, resources, and a broader sphere of influence that it could control across Russia.

Like many expansionist empires blinded by their lust for more power, Japan ended up biting more than it could chew by attacking the United States at Pearl Harbor on December 7, 1941. The US responded in a resounding manner. It not only decimated Japan’s military forces, but it also brought major devastation to Japanese cities through firebombing campaigns and the eventual atomic bombings of Hiroshima and Nagasaki.

Despite being throttled by the United States during World War II, Japan was able to quickly bounce back. During the Cold War, Japan became the world’s second-largest economy, following the United States. Japan relied on its strong culture of savings and ingenuity in the automotive and electronics sector to build a world-class economy.

Japan’s economic growth was nothing short of stellar. For example, in 1965 Japan’s nominal GDP was roughly over 91 billion. It would eventually swell up to 1.065 trillion by 1980. Throughout the 1980s there were genuine fears about Japan and gobbling up various sectors of the US economy. Japanese companies started buying alarming amounts of American real estate. The Japanese were also significantly investing in manufacturing operations. The common perception was that Japan was about to buy up the entire US.

In this same decade, several American geopolitical and economic experts were frightened at the prospect of an ascendant Japan. Some even feared that Japan would revert to its imperial mean and pursue an expansionist foreign policy yet again. Though these fears never came to pass. While the Japanese were fat with cash, they built a reputation for paying premium prices for properties. This proved to be a big mistake for them during the 1990–1991 recession, when property values took a nosedive.

Combine that with a domestic real estate bubble and a vast misallocation of resources that the Japanese government facilitated for decades, and you had all the ingredients for a period of prolonged economic stagnation. To cool off the real estate bubble, the Bank of Japan (BOJ) hiked interest rates to try to slow down the real estate market. During the period of 1991 up until 2001, Japan went through a period of economic stagnation and price deflation. This period of Japanese economic history was known as “Japan’s Lost Decade.”

This “Lost Decade” lasted a bit longer than expected, as Japan’s political class tried implementing all sorts of measures to jump start its economy. ‘From 1995 to 2007, Japan’s GDP fell from $5.33 trillion dollars to 4.36 trillion in nominal terms while real wages plummeted by roughly 5%. Although Japan was able to get out of this economic malaise, its economy grew much slower than other developed nations in this period. The moral of the story here is that even the most robust of economic growth stories can still face the inevitable spell of economic decline.

We must always remember that in this world the economic and political elements can be quite fickle. Most of this stuff is outside of your control. Nevertheless, you should always be prepared for whatever comes your way.

One way to do so is by securing your wealth. Forget everything else, if your financial house isn’t in order, you are only guaranteeing your economic immiseration. During inflationary times, you must mind your financial Ps & Qs lest you want to go through significant economic hardship.

The good news is there is a way out of this trap. It can be found through income property investing.

Do not fall for all the doom talk you see across the Internet. Yes things are going to get rough…but guess what? People will still need to have a roof over their head. Empowered investors can absolutely exploit this immutable aspect of the human experience.

By obtaining an income property, you’ll have at your disposal the most historically proven asset class. You get an investment vehicle that not only generates consistent cash flows but also allows you to gain major tax advantages.

And that’s not all…

Since we are living in inflationary times, the debt you take on to buy an income property gets eaten away due to inflation. In effect, the debt you have to pay off becomes cheaper.

That’s the beauty of inflation-induced debt destruction. It’s one of the best kept wealth-building secrets out here.

This topic will be covered at length during the Recession-Proof Investing Summit that is being held from October 7 to October 8.

At this event, Jason Hartman and his superstar team of investment counselors will go into inflation-induced debt destruction and other game-changing investment strategies that will make your investing activity so much more lucrative. This team of experienced investors will be ready to answer all of your most pressing questions about income property investing.

Plus, they’ll outline a step-by-step process that you can instantly implement to grab your income properties by the horns and make your cash flows go through the roof. You’ll also learn how to use your income properties as the ultimate hedge against inflation. No more having to worry about inflation gnawing away at your wealth.

A fair warning, however. The date of the big show is just around the corner and event spots are limited.

So make haste!

Learn how to make the most out of current economic turmoil by joining the hottest income property investing summit.

Sign-up for our Recession-Proof Investing Summit below:
CLICK HERE to Attend Our Recession-Proof Investing Summit!

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