Rosenberg's Advice For Living In A Japanese-Style Economy: Get Small

David's daily musings are as usual a treat, although we are very confused by how his call, that we are in a derpression, made a splash on CNBC - after all the man has been saying this for months now. Or is CNBC not allowed to utter the dreaded D and Double D words, unless the market has dropped by more than 5% in a week? Either way, the most applicable excerpt from today's piece was David's recommendation to "get small" as inspired by the Japanese, who have now lived an entire generation in a deflationary cycle. Alas, this very prudent advice will be lost and most certainly never work in the American culture, where bigger is always better, and living beyond one's means is the rule, not the exception, no matter the cost, or the credit card bills.

GETTING SMALL — SUSHI STYLE

There was really a terrific op-ed piece in the Sunday NYT by Norihiro Kato, a professor of Japanese literature at Waseda University, titled Japan and the Ancient Art of Shrugging. He explains to us how the next generation in Japan was affected by the fallout of the credit collapse and real estate deflation. It’s all about ‘getting small’ — one of our long-lasting post-bubble themes. Deflation at its penultimate. The article was all about how attitudes are changing among young people in Japan, and there may well be some takeaways from this for the rest of us:

“Three years ago, I saw a television program about a new breed of youngster: the nonconsumer. Japanese in their late teens and early 20s, it said, did not have cars. They didn’t drink alcohol. They didn’t spend Christmas Eve with their boyfriends or girlfriends at fancy hotels downtown the way earlier generations did. I have taught many students who fit this mold. They work hard at part-time jobs, spend hours at McDonald’s sipping cheap coffee, eat fast food lunches at Yoshinoya. They save their money for the future.

These are the Japanese who came of age after the bubble, never having known Japan as a flourishing economy. They are accustomed to being frugal. Today’s youths, living in a society older than any in the world, are the first since the late 19th century to feel so uneasy about the future.
I saw young Japanese in Paris, of course, vacationing or studying, but statistics show that they don’t travel the way we used to. Perhaps it’s a reaction against their globalizing elders who are still zealously pushing English-language education and overseas employment. Young people have grown less interested in studying foreign languages. They seem not to feel the urge to grow outward. Look, they say, Japan is a small country. And we’re O.K. with small.

It is, perhaps, a sort of maturity.”

Getting small, how novel. Make sure your portfolio dovetails with this theme.

Comments

[theworldisnotenough]

This is why I think the yen must appreciate. Japan can actually raise rates and not kill itself because its debt is held by its people. Raising rates to 20% will hurt alot less when you have a generation flush with cash and a enjoying a higher standard of living due to a stronger currency. While s stronger currency may hurt exports the domestic side has so much room to run I believe their economy wil adjust. I also believe that theres will not be the only currency to gain against the dollar so they will have eager customers in Brazil, China, and Australia.

[Spigot]

K-Winter: everything implodes, except supply for primal needs and PM's. No prior strategies (K-Spring, K-Summer, K-Autumn) work.

[Herry12]

Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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