Toshio Matsuda, Commentator & Intl Economist

Straight from the Shoulder No.500

Official Website : http://www.chokugen.com/e/
FAX: 011 81 3 5965-0064

The election of Barack Obama as the 44th President of the United States signals the end of the era of Pax Americana (Latin for “American Peace”) ? a period of relative peace that has continued since the end of World War II.

For many decades now, the hallmark of American prosperity has been found in liberty and democracy, and particularly within the ongoing expansion of free market enterprise. Liberating people from dictatorships, excessive regulations and other oppressive forces has served to expand political and economic opportunities, leading both to the camp of liberalism championed by Washington and strengthened market domination by the dollar as the key international currency. Today, however, the forces of liberty and democracy that have traditionally served as America’s proverbial backbone are beginning to steadily impede the power of the world’s last superpower.

President-elect Obama has been chosen from a sphere of influence completely apart from what has been the case for U.S. leaders over the decades to date. He does not hail from the forces of leadership that have expanded America with courage and the pioneer spirit, but rather has emerged from a segment that has effectively been granted its rights from the national leaders, and in turn has demanded welfare as a further inalienable right. As a case in point, children born to illegal immigrants in the U.S., persons now estimated to be some 20 million strong, are automatically granted American citizenship. For that matter, the parents of these children, as relatives in the first degree, are also able to become U.S. citizens without lifting a finger. The number of citizens demanding the rights they feel they are entitled to will soon surpass 50 percent of the nation’s total population.

People on the receiving end of such benefits no longer require the pioneer spirit or courage to survive in America. The Untied States, in other words, has been transformed into a nation in which a spirit of dependency and a lack of backbone have become dominant driving forces. Why has the pioneer spirit of America cooled off to such a degree? Ironically enough, the cause of this shift can actually be found in “democracy” ? the hallowed national standard that has guided and inspired Americans over the generations.

Against the dynamics of the current day and age, hopes for high economic growth have faded from the horizon, while the clout of the U.S. dollar in the global economy is also in serious retreat. Close to 50 percent of all Americans can now be said to live in a state of dependency under the “divine protection” afforded by democracy, with those people having become the supreme force across the land.

The United States is a country with the legacy of mobilizing the pioneer spirit, as the source of its own inherent courage and pride, to popularize democracy in the world. Now, in a sardonic twist of fate, that same America is now in the process of relinquishing its position as global leader under the weight of the democratic tradition that it has spearheaded for so long.

Just as empires of Rome and then Britain came to their respective ends in the past, the era of America is now moving toward that same basic fate. Over the years to come, furthermore, I find it highly unlikely that the United States will be able to recover the global-class prosperity enjoyed to date. Just as a candle burns brightest just before its flame goes out, I believe it far more probable that the U.S. will wage a final Middle East war for the sake of Israel, and in doing so bring its nearly 250-year history of greatness to termination.

Then we have Japan, a country that continues to struggle with the principles of competition and market-driven endeavor. Yet, despite the difficulties in acclimatizing itself with such tenets, Japan boasts the wealthiest population in the world, continually runs a high trade surplus, holds impressive levels of foreign reserves and is the greatest creditor nation on earth (i.e., donating and lending capital to countries throughout the world). The status of Japan, a country that today remains aloof and even ignorant in terms of its political and economic strategies, is destined to eventually attract the world’s keen attention with the ongoing decline of America.

When the Nikkei stock average previously recovered to the 9,000~10,000 yen range, I warned investors not to jump in to buy because prices were still due to sink to below 8,000 yen into the 7,000-yen range. In my view, rather than thinking in terms of immediate gains, the time appears right to take a fresh new look at Japan from the perspective of this nation’s historical destiny.

We are on the threshold, in other words, of seeing the market’s attention seriously shift to the latent energy and economic security (stability) that continues to characterize the Japanese state.