(8) Does Japan have the funds?
Well then, supposing we establish such a new investment bank, does present-day Japan have the funds that can be procured by that investment bank?
It is probable that the present government will completely reach a financial impasse in the not-too-distant future and become unable to maintain the current fiscal austerity. Thus, I think the government will have to force the Bank of Japan to issue an enormous amount of money in order to finance the huge fiscal deficit.
On the other hand, the Japanese people have huge amounts of assets in the form of bank deposits, stocks, and bonds. From a simple consideration, it might seem that the problem of fiscal deficit can be resolved by offsetting these assets with the fiscal deficit.
However, that is not the case. Pursuing the ongoing reforms will only impoverish people’s lives even further; hence, in order to protect themselves, the people will not hand their money to the existing government. As a result, the money ― with no investment destination ― will just lose value due to inflation.
The funds available for the new nation-building of Japan are held by a large number of people in the form of their own savings. Any attempt to confiscate those funds by using the power of the government or to take away those funds by luring them into the market would surely fail in Japan. Unless nation-building begins ― a nation-building that makes the owners of money, especially the elderly, consider in earnest that they should pitch in some money for their future ― not a penny will be actively invested.
Having said that, the elderly are painfully aware ― through their experiences during the chaotic period after the war ― that money will lose its value once inflation starts. Money is paper after all, and we need to convert it into real assets in order to live.
In the age of deflation, as has been the case so far, money would not lose its value as long as it was held in cash. That was the safest and most secure way [to preserve the value of one’s money]. But now that inflation has begun, money will decline in value if it is simply held in cash. Hence, money has to be invested or spent [before it loses its value due to inflation]. As for investing money, any attempt to increase one’s funds in a stable and lasting way through investment seems almost hopeless, since we are in an era when the markets are extremely volatile. So, in this age, we have no choice but to spend our money proactively.
If the elderly are to use money in the age to come, I think they will probably use it for two objectives. The first objective is to enjoy a healthy and long life. The second is to foster the next generation. Surprisingly, both these objectives perfectly match the values of LOHAS, that is, health and sustainability.
So, as long as the members of the working generation faithfully uphold the values of LOHAS and appreciate the true meaning of “Great” Collaboration in advancing their work, they will surely be able to attract large amounts of money.
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(Date published / 公開日： 8/22/2021)
(Date last updated / 最終改訂日: 8/22/2021)