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Last updated 5/18/2012
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ASIA’S RISING TIDE
They will soon over take the U.S. economy. They are buying up our properties. They are hollowing out our manufacturing capability. Their corporations have much higher price-earnings ratios. America is sinking by comparison. China? No. Japan in 1990. In that fateful year, experts the world over predicted that Japan would soon become the world’s number one economy. Japanese cars were gobbling up huge market share at the expense of GM, Ford and Chrysler. It was almost impossible to find a TV set that was not manufactured in Japan. Japanese investors had struck fear in American hearts by buying up such fabled real estate parcels as California’s Pebble Beach and New York’s Rockefeller Center. Everybody in America seemed depressed. Then the world suddenly pivoted. The Japanese bubble blew up. The Japanese stock market collapsed, dropping from just under 40,000 to today’s 9,000. Banks threatened to go under, overwhelmed by bad business loans and mortgage paper. The government dropped interest rates to zero and desperately supported collapsing industries. In the process, huge debts were run up. But nothing worked. The nation fell into recession. The 1990-2000 time period was widely called “Japan’s lost decade.” But nothing improved in the next decade, either. By 2010, Japan had lost two decades and the nation’s economic problems were getting worse. Taiwan and South Korea began to chew into Japan’s once high-flying export industries. South Korea, with newer technologies and lower labor costs, gutted Japan’s steel and shipbuilding industries. Samsung and other electronics makers began to make hash out of Japan’s wonder companies like Sony, Panasonic and Hitachi. In 2006, Japan’s population bomb exploded. In that year, the nation registered more deaths than births. And it’s been downhill from there as Japan’s population has begun to shrink like a cheap shirt. Experts call Japan a “net mortality nation” as the imbalance between births and deaths worsens. Japan’s shrinkage is caused by three basic problems –
By 2040 it is estimated that there will be almost as many hundred-year-olds as births. Japan is currently in a debt crisis and its depopulation will put unheard-of pressures on the economy. As the population ages, the elderly will be supported by fewer and fewer people of working age. This burden on government programs and pension funds will become unbearable without some kind of creative breakthrough. By 2040, the average age is projected to be 55 – older than many American retirement communities. There is speculation that Japan may be forced to buy and lease lands for its elderly in India or the Philippines, where maintenance costs are much lower. Because there are so few Japanese babies born today, Japanese inventors are developing robotic children and pets to serve as emotional substitutes for the growing shortage of children. Japan cannot be written off, as the U.S. was in 1990. Who knows? By stretching the working age to 75, the country could find great relief from its economic problems. By developing an American attitude toward immigration, it could solve its shrinkage problem entirely (just as America did.) But one thing is certain. A shrinking Japan will never again regain its once-lofty place in the world’s power structure. Now about China taking over the world: China has many of the same problems which confronted Japan in 1990…aging population, real estate bubble, low birth rate (by design), growing competition from the nations of southeast Asia, and shortages of food, water and raw materials. As one Chinese official said to me, “Will be become rich before we become old, or will we become old before we become rich?”(click here for a printable version of this article) |
WHY CHONGQING MAKES SO MUCH HEAT A few decades ago Chongqing looked like this:
Now Chongqing looks like this:
Last year Chongqing’s economy grew over 16 percent – twice that of China. So why is Beijing so angry about the “Chongqing Model”? |
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2012: THE BATTLE FOR THE DRAGON’S SOUL
The battle for China’s soul is increasing in intensity. On one side you have the moderates, led by President Hu and Prime Minister Wen. They want to make China more democratic and less dependent on state-owned industries. President Wen even wants to privatize the state-owned banks. A protegee, Party Chairman of Guangdong Province Wang, was so liberal as to allow the rebelling residents of Wukan City to elect their own CP representatives. This move to democracy shocked CP conservatives. On the other side, you have the arch communist conservatives formerly led by Chongqing Party Chairman Bo and now led by entrenched state economic interests. While Bo has fallen to charges of corruption, illegal activities, and potentially complicity in murder, other CP conservatives fight to preserve their economic fiefdoms. In this critical election year, the battle will determine which faction controls the all-powerful CP Central Committee, since seven of the nine current members will leave office this fall. |
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THE MAD, MAD ECONOMY, PART 321
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THE MAD, MAD ECONOMY, PART 320
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A CRITICAL SHORTAGE OF WISDOM
There is a great shortage of wisdom in the world. There is a great deal of intelligence among all the peoples of the earth. But wisdom? It’s in short supply everywhere. Curiously, the social sciences have for almost a century indicated that intelligence and wisdom are rarely found in the same person. In fact, the scientists claim that “There is an inverse relationship between wisdom and intelligence.” The higher the intelligence (IQ), the lower the wisdom (WQ). Wisdom has often been called “street smarts” or “common sense” in America. But neither of those terms do justice to the phenomenon of wisdom. How do you define the concept of wisdom? |
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From the Archives: Today we take a trip back to 2005, the first year the Uncle Wisdom Papers were published. It was a time when a barrel of crude oil hit the stratospheric price of $50 a gallon, and Uncle Wisdom was shocked to see the price of filling up his car's gas tank soar to $43.15. This morning, April 18, 2012, the opening price for a barrel of crude oil was $104.44.
How in the world could one tank of gas have gone from $43.15 to $379.79? After parking the car and staggering with shock into the house, I found myself in front of my computer, booting it up all the way to Google. Hitting the "news" button, I began searching for all news relating to "oil," "gas," and "gasoline." I didn't have long to wait. With lightning speed, the magical search engine spewed out news item after news item. Starting in January, 2005, the headlines played out on my trembling screen. "OIL HITS $50 A BARREL" "EXPERTS PREDICT $50 OIL WILL HALT THE RECOVERY" "EXPERTS CLAIM OIL COULD SETTLE BACK TO $40 A BARREL" |
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"HOLY TAMALE! THE MEXICANS ARE COMING!" Another article from the archives. In 2005, the first year The Uncle Wisdom Papers were published, Uncle Wisdom took a look at the matter of Mexican immigration and made some surprising comparisons to immigrant waves of decades and centuries past.
What's all the furor about? Illegal Mexicans are pouring across the border. The latest estimates put more than six million illegal Mexicans living and working in the United States. American workers worry about losing jobs. Unions fret about losing members. Americans want to stop the influx. Many want to wall off Mexico. But against all the obstacles stands business. Business wants workers. And illegal Mexicans want work. So the President and Congress dance about, trying to placate both sides. So what's new? |
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The Democrats' plan to increase taxes will not eliminate the deficit. It’s all a political gambit to keep the voter from understanding two things: 1. No one is serious about eliminating the deficit. 2. There is a clear and simple way of eliminating the deficit. |
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We were driving home from the restaurant, trailing a BMW, when my wife said, “I know something that BMW will never do.” “What’s that?” I asked. “It will never signal,” she said. And sure enough, the BMW changed lanes without signaling. There seems to be a strange mentality among those who drive BMWs. As soon as a BMW driver gets behind the wheel, his ego swells up so big that it’s hard for him to see the road. He develops a huge contempt for slow drivers (i.e., those who obey the speed limit). For him, speed limits are speed minimums. |
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This shirt is over 30 years old. It is unbelievably comfortable. Its material and stitching is outstanding. And it was made in the good ol’ USA. (My wife wants to throw it out because it has noticeably faded. When I tell her that Ralph Lauren made hundreds of millions of dollars designing the “faded look,” she wrinkles up her nose and looks the other way.)
Unfortunately, the production of that shirt has migrated to many locations. First from New England to South Carolina; then to El Paso; then to Mexico; then to China; then to the Philippines; and now back to Mexico. Why did that shirt move so much? |
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WHO IS REALLY TO BLAME?
Everybody seems to think it's the Captain's fault. He ignored the approved route and steered recklessly close to the rocky shore. He delayed giving the "abandon ship" order by one hour, which caused some people to be trapped inside the sinking vessel. He left the ship without checking to see that there were still passengers aboard. He refused the Italian Coast Guard's order to return to the ship and supervise the passengers who remained aboard. And of course Costa and Carnival management quickly blamed the captain. Actually, the Captain is not the only one to blame. |
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UNDERESTIMATING RADICAL MUSLIMS
The headline over the news article about the recent Pew study blares "U.S. Muslims Are Moderate." That should make you feel nice and safe at night – except it is very misleading. Revolutionary violence is generally created by a small minority, never a "moderate majority." Think Hitler's Brown Shirts, a small minority in Germany in the 1920s. Or think Lenin's Bolsheviks, a tiny movement in Russia in 1917. Or think Mao's Communists, so small and so weak as to get thrown out of Shanghai before the "long march." And don't forget Samuel Adams and his loyal band who started revolutionary fur flying in Massachusetts in 1776. And especially think Mohammad, who started with an attack on Mecca and finished with a movement that subjugated much of the civilized world. (click here for a printable version of this article) |
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WILL CHINA SEND YOU YOUR SOCIAL SECURITY CHECKS?
Mary Pickett believes that her Social Security is very safe. "The Social Security trust fund has lots of money, enough to last until 2027," Mary enthuses. "I read it in the paper. Besides, I'm 85 and will probably be dead before then," she laughs. To Mary, the Social Security fund is like a huge treasure chest, full of money. But if Mary could look into that chest, she would find no money. Instead, it is stuffed full of government IOUs – which are called "special bonds." In a spirit of incredible bi-partisanship, the federal government has "borrowed" all $2.6 billion from the fund. Mary's treasure chest is empty. The Trust Fund has been looted. So much for the "Trust" part of the name. The Social Security crisis is now – not sometime in the future. |
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SHUTTING DOWN THE GOVERNMENT, SOONER OR LATER
This week, the U.S. government came within a whisper of shutting down tight and completely. It's all because we are violating a basic law of nature: WHAT CAN'T STOP GROWING WILL ONE DAY STOP To understand this principle, think cancer. When cancer cells can't stop growing, they simply stop – when the body dies. |
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SAY IT AIN'T SO, CHEERIOS.
Cheerios was nutritionally correct, containing only a little over three percent sugar. Cheerios in the bright yellow box was the starter solid food for infants. All pediatricians recommended it. It contained no excess sugar. And the little o's were shaped and sized to prevent babies from choking. One marketing director once said that half of all the Cheerios sold ended up on the kitchen floor. But Cheerios has double-crossed all health-food-oriented people. For Cheerios has gone over to sugar! |
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MY FAIR LADY
He actually wished that women were more like men. It was the kind of wish that inspires the warning: Check out the lyrics Higgins sang.
A major study indicates that Professor Higgins was completely wrong about the sexes. |
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(copyright) 2005-2012 UncleWisdom.com. All rights reserved.
I pulled into my favorite Exxon-Mobil service station, got out of my car and went through my well-practiced credit card-pump ritual. The dials on the pump whirred and whirred and whirred. Finally the pump thunked off and I replaced the hose and capped my tank. Then I reached for the receipt. I stared in horror. The slip of paper said $379.79.
Vigilantes are manning the border. Politicians are wringing their hands. Two governors have declared states of emergency. The unions are up in arms. Some economists are using the "C word" (crisis). Homeland Security says we should immediately "go to red."
The Republicans' plan to lower spending and taxes will not eliminate the deficit.
Once upon a time, Cheerios stood for Health, with a capital "H." 
In My Fair Lady, Professor Henry Higgins was an arrogant linguist sporting a formidable wisdom handicap.
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