DECEMBER 15^TH

Things are about to get bumpy and you’re not insulated from this, no matter how diversified you are.

The Japanese are big believers in insulating themselves. As a group of islands in the Pacific Ocean, their culture and ethnicity are unique and they’re trying as badly as they can to keep it that way.

Isolation and not being willing to change, though, has come at a cost.

With a population of 126M, the 3^rd largest economy in the world is struggling. It is, by far, the most indebted country relative to the size of its economy, with a $13tn national debt.

The U.S., in comparison, owes $29tn, but Japan’s debt/GDP ratio is 266%, which is unprecedented.

The country is a world leader in automation, robotics, vehicles and technology, in general, with 90% of its population residing in cities. The Tokyo metropolitan area is the largest in the world, with 38M residents.

But, it’s also the oldest country in the world, by a mile: 27% of its population is over the age of 65! Think about the fact that 36M human beings are at the age of retirement. The average baby born today in Japan has a life expectancy of 85, the highest in the world.

Japan is old, indebted and shrinking in population, which is a recipe for disaster, as Western European countries have found out (Italy, Germany, France, Denmark, Spain and others).

In the 1920’s, Japanese women gave birth to an average of five children, but since 1974 the replacement ratio is negative. In 2006, Japanese women gave birth to 1.26 children, on average! In 2008, the country’s population officially began shrinking and they have over 2,000,000 people who are over the age of 90, along with 20% of the global population of centenarians.

The situation is begging for a solution, because by 2060, the population of the country will contract by a third, from 126M to 87M!

40% of its younger labor force are part-timers, who are overworked. There are 9,000 corporations in Japan that pay more than 80 monthly hours of overtime, and massive 30+ year-old inexperienced demographics, when it comes to sexual encounters (virgins), who say they have no time for family. This means more debts, government healthcare and social programs are coming, with no way to fund them!

In 2014, the country sold more adult diapers than baby ones. If you’re asking yourself why Japan isn’t letting outsiders apply for residency, work permits or citizenship, it is because they want to remain isolated. But not willing to open up and change has led to this unbearable and unsustainable condition.

Tomorrow, the FED will probably make one of its most bearish decisions, on the face of it, which is to taper faster, so that it can tighten (raise interest rates) sooner.

Tough decisions are a part of life.

Portfolio Wealth Global believes tomorrow is a crucial day for investors, and we’ll be covering the action as it unfolds.

Similarly to Japan, just printing currency and pretending there is no backlash has led America to hyperinflation and something must give, NOW.

Best Regards,
PortfolioWealthGlobal.com