Chapter 26 Strange things under the financial crisis: "under one person"

In the first chapter, I briefly described the signs of a low IQ society. Here, I would like to explain how Japan has derailed from the world, and how the Japanese government, bureaucracy, judiciary, and media have deviated from international common sense before conducting an individual verification of "IQ decline". Where the hell are we? Where in the world are we? If this issue is not clear, nothing can be discussed.For this, if you think of yourself as a lost child, it is easy to understand. When you get lost, the first thing to do is to find out where you are.Because only when you know where you are, can you use this as a basis to find your way out, and finally find the right way.

However, if the "collective IQ" is too low, you will not even know where you are. After the outbreak of the financial crisis in 2008, the entire world economy fell into a depression.Especially in the United States, the source of the crisis, its stocks plummeted and its economy was clearly depressed.Affected by this, stock prices in countries all over the world, including China and India, which have been developing well before, are falling.The decline in Japanese stock prices is even more severe than in the United States, and it is in the so-called "under one person" state.

In fact, this state has already fully started in 2007. In the annual settlement in March 2008, the Nikkei average stock index was 12,525.54 points, while the Nikkei average stock index was 17,287.65 points in the same period in 2007, which indicated a drop of nearly 5,000 points, or 27.5%. At that time, the U.S. Dow Jones Index stopped falling with a growth rate of 1% in one year, while China's Shanghai Composite Index reached a high growth rate of 9.1%.Judging from these, abnormalities had already appeared in Japan at that time. After October 2008, this situation accelerated as the impact of the financial crisis gradually expanded around the world.To put it figuratively, if the US stock index falls by 20%, then Japan's stock index must fall by 30%.

Regarding this "under one person" situation, that is, the state of the stock index falling, people often ask me: "How did it become like this? Didn't the government repeatedly emphasize that the Japanese economy is developing in a good direction? Economics Didn’t the experts also say that the subprime mortgage crisis will not affect Japan?” My answer to this is: "In fact, even if there was no subprime mortgage crisis, investors all over the world would withdraw their funds from the Japanese stock market." Here, I would like to ask readers a question: think about it.

If you want to read the following content without thinking about it, I advise you to stop for a while, even after a little thought, before continuing to read, because "thinking" is the main theme throughout this book. Ok, now let me explain. According to the "Report on Internal and External Securities Investment" released by the Ministry of Finance on January 16, 2008, the foreign investment holdings in Japan amounted to 4.1419 trillion yen, a decrease of 48.9% compared to 2006 (Figure 2-1) . In short, the Japanese stock market's decline was inevitable as securities buying was cut in half.Especially in late 2007, when the subprime mortgage crisis broke out on a large scale, the tendency of foreign investors to sell became more obvious.

Especially after the bankruptcy of Lehman Brothers, this tendency became more obvious.Affected by the financial crisis affecting countries around the world, investors from all over the world have taken measures to sell stocks, especially in the Japanese market, which has almost reached the level of selling, which eventually formed the minimum market value of stocks after the financial crisis.Looking at the situation throughout 2008, it can be predicted that foreign investors will continue to sell stocks for another 8 years.This means that the Japanese stock market after the plunge will not rise in the short term.

The rise of the Japanese stock market all depends on the buying of foreign investors, otherwise the decline is inevitable, and the financial crisis has only accelerated it. In other words, the subprime mortgage crisis is not the root cause of the stock market decline, but the fuse. I think, if there are no foreign investors in this world but only Japanese, then the Nikkei index will reach 12,000 points at most.Therefore, after the financial crisis, it is very difficult even to recover to 10,000 points. In other words, the real reason for the "under one man", that is, the decline of the Nikkei average index, is that foreign investors who have been buying Japanese stocks before have invested their funds in other overseas markets.

It may be more accurate to consider Japan's economic strength and Japan's status in the world from this perspective. Initially, when the Nikkei average stock index was in a downward trend of 8,000 points, it was indeed foreign investors who came to the rescue.When Japan had a crisis in its economic structure, it had to rely on China's help to improve it.In my book, I call it the "Viagra Phenomenon." The control of the Japanese stock market is not in the hands of the Japanese. Japan's commercial development is closely related to foreign trade. If there is no trade with foreign countries, Japan's economic development will be out of the question.

But despite this, Japanese politicians and officials miscalculated Japan's own strength and believed that stock prices would rise.So as long as the GDP rises a little bit, they will say that "the situation is very good", "beyond the post-war golden age", and even call it the result of Koizumi's reform. incomprehensible.