"Preparing for the end of the capitalism party."
The world has witnessed the collapse of communism, the failure of socialism, and now even the final bastion of liberal democracy is in a precarious state. Nations are increasingly turning inward, with far-right parties fueled by populist politicians gaining momentum worldwide.
In terms of economics, the governance systems of countries currently experiencing growth are often authoritarian or driven by an ideology of economic supremacy that discards the weak. The world has become excessively greedy, inundated with rampant commercialism, creating an atmosphere of chaos—a prelude to global disarray.
Thomas Piketty’s inequality equation, "r > g," highlights a critical imbalance: r, the rate of return on capital (profits from investments by shareholders and landowners), surpasses g, the economic growth rate (wage growth earned through labor). This imbalance normalizes increasing returns on capital, and if political mechanisms fail to redistribute wealth, excessive polarization will undermine societal sustainability, signaling the end of capitalism.
Preparing for the inevitable end of capitalism’s “party”
The author of The Millionaire's Secrets of the Jews warned, “2024 will be a tumultuous year,” and further chaos is anticipated in 2025. The global economy teeters on the brink of collapse, with predictions that the "true crash" is yet to come.
In 2024, Japan’s Nikkei Stock Average reached an all-time high but experienced its largest decline in August. Top investors, such as Warren Buffett, began offloading assets, making clear their moves to mitigate risk. The post-COVID bubble has burst, and investments in stocks, cryptocurrencies, and real estate now carry significant risks.
The real estate market crisis
Commercial real estate prices have fallen by over 30% in some parts of the United States, a trend that reflects global concerns. As fears of stagnant property prices grow, potential buyers vanish, bringing the "end of capitalism" closer. Tokyo’s real estate market could also be affected, with foreign investors, such as those from China, potentially triggering a sell-off once they sense a decline in value.
Risks triggering economic collapse
The global economy is precariously balanced, and a single event or statement could spark its downfall. For example, in December 2024, the Dow Jones Industrial Average in New York plummeted over 1,100 points, with consecutive declines for 10 trading days. Geopolitical risks, such as wars or diplomatic crises, are also major factors. Japan faces risks of being embroiled in war or trade friction as Trump’s "America First" ideology spreads to resource-rich nations worldwide.
What actions must we take?
It is crucial to start preparing now. Observing economic and societal trends with a calm perspective, diversifying risks across as many categories as possible, and developing the ability to adapt are essential. Building resilience to endure five to seven years of turmoil will be key to restarting in a new era.
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