We Are Entering “The Lost Decade” - The Economic Collapse of the 2020 Decade! - Great Video

Jack Chapple

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Over the last few months, businesses have been put under extreme amounts of stress to say the very least. 

The lockdowns have forced some businesses to completely shut down… and others to remain open, but with significantly less revenue.

This has caused many companies to take some financial actions that they would normally never take.

And that is why we are seeing the creation of a new economic crisis. A crisis that will affect millions of people around the world…and yet most people don’t even know what it is…
(This is the Zombie Economy).

What country do you think had the wealthiest citizens in the year 1990? Was it a great Western Power Like the United States or the UK. Maybe it was a Nordic country like Norway or Sweden. Could it have possibly been the economic powers of the Germans or the French?

Well none of those are the right answer. The wealthiest people in the world out of all industrial nations in 1990 was actually the Japanese.

You see World War 2 decimated large parts of Japan, and took out and estimated 40% of its infrastructure. However, this devastation allowed Japan to rebuild their entire economy from scratch. They rapidly built modern factories throughout Japan, which gave them a massive advantage over other nations who’s factories were old and comparatively outdated. 

The country also began to through an era that was called “the gifts from heaven”.

This is was an era in Japan where within the span of 3 years…all of the following things happened.

Japan became a democracy, Workers got labour rights, women got the right to vote, farmers were allowed to own their land, general society liberalized, and expansion of private businesses were allowed.

All of these reforms combined with other factors like extremely high productivity, led to Japan becoming an economic superpower where during parts of the 1980s, they had the second largest economy in the world behind the United States, and had they had the highest GNP per Capita out of all major industrial nations in the world.

But then…a major economic crisis would tear the economy of the country apart.

You see, in the 1980s, Japan made some financial reforms that seemed good at the time, but would end up creating their first modern financial crisis in the countries history.

In 1985, the Plaza Accord doubled the exchange rate value of the US dollar versus the Yen. They had strict tariffs that encouraged people to save money vs spend money. And lastly there was excessive loan growth quotas created by the Bank of Japan.

All of these factors led to a speculative asset bubble in Japans economy. In fact from 1985 to 1989, The Nikkei 225 which is the major Japanese stock market index…saw a 218% gain over that 4 year period. That was arguably the biggest bubble for a major economy in the history of the world.

And of-course…in 1989, that bubble began to burst and the stock market crashed. And it crashed so hard that to this day, the closing price of the Japanese stock Market has never surpassed the peak that it reached in 1989.

And this crash radiated throughout the japanese economy.Unemployment spiked, GDP growth went negative, and a ton of giant companies were left with tons of debt, and little to no revenue to pay back that debt.

And this was the creation of what became known as zombie companies.

What happened was that a large portion of japanese companies were loaded with debt and could not pay back their debt in full…but could pay back essentially the bare minimum to keep the company alive.

And what this meant was Japanese companies had to take on more debt or get bailed out by the Japanese government in order to get by.

But the trouble was, that even though many corporations got bailouts or took on additional loans…these companies were too debt ridden to survive in the long term.

So pretty much these companies were loaded with debt, and were already dead, but were acting as if they were alive. And that is why they were called zombie companies.

And the creation of these zombie companies were the largest contributing factor to Japans economic decline over the following decade. A decade that would become known as “the lost decade”.

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