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00:00So today I want to talk about a country that almost nobody is discussing in the context of this war.
00:07Everyone is talking about America. Everyone is talking about Iran.
00:11Everyone is talking about Israel and China and Saudi Arabia.
00:15But there is one country sitting quietly on the sidelines of this war,
00:21watching everything very carefully that I believe will emerge as the single biggest surprise winner when this is all over.
00:28And that country is Japan. Now I know what you are thinking.
00:32Japan. Really? A country with the oldest population in the world.
00:37A country that has been stuck in a deflationary economic spiral for 30 years.
00:42A country that imports almost everything it needs to survive.
00:46A country that could be blockaded and starved if China ever takes Taiwan.
00:51That Japan. That is going to be the surprise winner of this war.
00:54Yes. And by the end of this video, I think you will understand exactly why.
01:00But first, let me be completely honest with you about Japan's weaknesses.
01:05Because I want you to understand just how bad things look on the surface.
01:08Before I show you why the surface tells completely the wrong story.
01:12Part 1. Japan's weaknesses. And they are real.
01:16So let us start with the uncomfortable truth about Japan.
01:20Japan has serious structural problems. And I am not going to pretend otherwise.
01:25The first problem is demographic.
01:28Japan has the oldest population in the world.
01:31The oldest. Not one of the oldest. The oldest.
01:35More than 20% of Japan's population is over 65 years old.
01:39And that number is getting worse every year.
01:42An aging population means fewer workers.
01:45Less productivity. Less innovation. Less economic dynamism.
01:49And a growing burden of elderly care that younger generations have to carry.
01:54That is a massive constraint on Japan's future growth potential.
01:58The second problem is economic.
02:00For the past 30 years, Japan has been stuck in what economists call a deflationary spiral.
02:07Prices falling. Wages stagnant.
02:10Debt accumulating. Growth barely moving.
02:12Japan has an excessive debt burden that has kept its economy in a kind of permanent slow motion for three
02:19decades.
02:20While China was growing at 8% and 9% and 10% per year, Japan was growing at 1%.
02:25That is a devastating economic disadvantage.
02:29The third problem is resource dependence.
02:32Japan is a small island nation.
02:34It has almost no natural resources of its own.
02:36No significant oil.
02:38No significant gas.
02:39No significant agricultural land relative to its enormous population.
02:44It needs to import almost everything.
02:47Everything.
02:47To keep its economy running and its people fed.
02:51And this resource dependence creates a fourth and potentially existential problem.
02:56Japan gets approximately 75% of its energy from the GCC, from Saudi Arabia, Qatar, the UAE.
03:03And that energy travels by ship through the Strait of Malacca.
03:06Now, here is the problem.
03:08Taiwan sits at a critical point along that route.
03:12If China ever reunifies with Taiwan, and China has made very clear that reunification is its ultimate goal,
03:20then China effectively controls Japan's energy lifeline.
03:24China could blockade Japan, could starve Japan of the energy it needs to function,
03:30could bring Japan's entire economy to its knees without firing a single shot.
03:35So when you look at Japan on paper, what do you see?
03:38Oldest population in the world.
03:4030 years of economic stagnation.
03:43No natural resources.
03:44Completely dependent on imported energy.
03:48Vulnerable to Chinese blockade.
03:50That is a nation that looks like it is in serious trouble.
03:53And yet, I would invest every single dollar of a billion dollars in Japan.
03:58Not half in China and half in Japan.
04:00All of it in Japan.
04:02And I want to explain exactly why.
04:05Part 2, what history actually tells us about Japan.
04:08So here is where I need you to stop thinking like an economist.
04:12And start thinking like a historian.
04:14Because economists look at data.
04:16They look at debt ratios and demographic curves and GDP growth rates.
04:20And all of that data says Japan is in trouble.
04:23But historians look at patterns.
04:26They look at what a people have done when their backs were against the wall.
04:30When everything looked hopeless.
04:32When the odds were completely against them.
04:35And when you look at Japan through the lens of history,
04:37you see something completely different from what the economic data shows you.
04:42Let me take you through three moments in Japanese history
04:45that I think are the most important things you need to understand about this country.
04:50Moment 1.
04:51The Mongol invasions.
04:52So go back with me to the 13th century.
04:55The year is 1274.
04:57And the most powerful military force the world has ever seen is preparing to invade Japan.
05:02The Mongol Empire.
05:04At this point, the Mongols have already conquered China.
05:07They have conquered Central Asia.
05:08They have conquered Persia.
05:10They have conquered Russia.
05:11They have crushed every army that has ever stood against them.
05:15There is no nation on earth that has successfully resisted a full-scale Mongol invasion.
05:21None.
05:21And Japan at this time is a small feudal nation.
05:25Divided into different clans and fiefs.
05:27Fighting among themselves constantly.
05:29With no unified national army.
05:32No central command.
05:33No experience fighting a military force of this scale and sophistication.
05:38On paper, Japan has absolutely no chance that the Mongols invade.
05:44And something extraordinary happens.
05:46The Japanese fight back with everything they have.
05:49With a ferocity and a unity that nobody expected from a nation so divided.
05:55And then a massive typhoon strikes the Mongol fleet.
05:59The Japanese called it the kamikaze.
06:01The divine wind.
06:02And the Mongol invasion fails.
06:05But here is the part that most people do not know.
06:08The Mongols came back.
06:10Seven years later, in 1281, they came back with an even larger force.
06:15The largest naval invasion force the world had ever seen at that point.
06:20And again, the Japanese fought back with the same ferocity.
06:23The same unity.
06:24The same absolute refusal to accept defeat.
06:27And again, another typhoon destroyed the Mongol fleet.
06:30Twice.
06:30Japan defeated the greatest military empire in the world.
06:34Twice.
06:35As a feudal divided nation with no unified army.
06:38That tells you something very important about the Japanese people.
06:40When they face an existential threat.
06:42When their survival as a nation is at stake.
06:45They come together.
06:46They unify.
06:47They fight with everything they have.
06:49And they find a way to survive.
06:51Moment two.
06:53The Meiji Restoration.
06:54Now go forward with me to the middle of the 19th century.
06:58The year is around 1850.
07:00And the Western industrial powers, Britain, France, America, are carving up Asia.
07:05They carved up China.
07:07They colonized India.
07:08They took Southeast Asia.
07:10They were colonizing the entire continent.
07:12And Japan, still a feudal nation, still using samurai swords, still largely cut off from the outside world, was next.
07:20Everyone expected Japan to be colonized.
07:23It seemed inevitable.
07:25A backward feudal nation against the full industrial and military might of the Western powers.
07:29There was no realistic scenario in which Japan survived as an independent nation.
07:35But then something happened that shocked the entire world.
07:38Japan looked at what was happening around it.
07:41It looked at how China was being destroyed.
07:43It looked at what colonization meant.
07:45And it made a decision.
07:47A collective national decision.
07:49We are going to change everything.
07:50We are going to take everything that made the West powerful.
07:54It's technology.
07:55It's industrial methods.
07:56It's military organization.
07:58It's scientific knowledge.
07:59And we are going to master it.
08:01We are going to transform ourselves completely in a generation.
08:05And that is exactly what they did.
08:07In 20 to 30 years, a single generation, Japan went from a feudal backward nation using samurai swords to an
08:15industrial power with a modern navy, a modern army, modern factories, modern universities.
08:22And then, in 1905, Japan did something that stunned the entire world.
08:28It defeated Russia, the Russian Empire, a European great power, an open military conflict, the first time in modern history
08:36that an Asian nation had defeated a European great power.
08:40Think about what that means.
08:42In one generation, Japan went from feudal isolation to defeating a European empire.
08:47That is not just resilience.
08:49That is something almost unprecedented in human history.
08:52Moment three, the recovery after World War II, and now the most extraordinary example of all, August 1945.
08:58Japan has just been through the most devastating military defeat in its history.
09:04Two atomic bombs dropped on its cities, firebombing campaigns that destroyed most of its major urban centers.
09:10Its navy completely destroyed.
09:12Its army completely defeated.
09:14Its economy completely shattered.
09:16Its cities reduced to rubble.
09:18By any measure, any historical measure, Japan, in 1945, was finished.
09:23Not struggling.
09:25Not damaged.
09:26Finished.
09:27There was no realistic scenario in which Japan recovered from that level of destruction in any meaningful time frame.
09:33And yet, in 20 years, one generation, Japan became the world's greatest manufacturing power.
09:39The world's greatest, not one of the greatest.
09:41The greatest from complete devastation to global manufacturing dominance in 20 years.
09:46How?
09:47Not through luck.
09:48Not through natural resources.
09:50Japan has almost none.
09:51Not through favorable geography.
09:53Japan is a small island with limited land.
09:56Through the sheer collective will, intelligence, discipline, and creativity of the Japanese people.
10:02There is something in Japanese culture, something deeply embedded in how they see themselves, how they relate to each other,
10:09how they respond to adversity.
10:11That produces this extraordinary capacity for recovery and transformation.
10:16And that is what I want you to hold in your mind as we talk about what is happening right
10:20now.
10:21Part 3.
10:22Why Japan is the surprise winner of this war.
10:26So now, let us connect all of this to the current war and explain why I believe Japan will emerge
10:32as a surprise winner.
10:33This war is accelerating three massive global trends.
10:36De-industrialization, re-militarization, and mercantilism.
10:41And each of these three trends, which look like threats to Japan on the surface, actually create opportunities for Japan
10:48that no other nation is as well positioned to exploit.
10:51Let me explain each one.
10:53Opportunity 1.
10:55Remilitarization.
10:56So, for the past 80 years, Japan has been constitutionally prohibited from maintaining offensive military forces.
11:02It has a self-defense force, but no army, no offensive navy, no power projection capability.
11:09It has depended entirely on American military protection for its security.
11:14But now, as this war exposes the limitations of American military power, Japan is being forced to rethink everything.
11:21And Japan's response to that challenge, given what history tells us about this country, is going to be extraordinary.
11:28Japan is already talking about the most significant military expansion in its post-World War II history.
11:34Defense budget doubling, new missile capabilities, new strategic partnerships, new military technology.
11:41Japan is already developing hypersonic missiles, advanced drone swarms, next-generation submarine technology, AI-powered defense systems.
11:50This is not a nation slowly waking up to a new military reality.
11:54This is a nation that, when it decides to move, moves with extraordinary speed and precision.
12:00Remember what happened during the major restoration.
12:02Japan looked at what the West had built, its industrial technology, its military organization, and mastered it in one generation.
12:10Japan will do exactly the same thing now with modern military technology.
12:16It will study, it will learn, it will adapt, and it will build something extraordinary.
12:21Something that reflects Japanese ingenuity and precision.
12:24Something that nobody else has built before.
12:27Opportunity two, mercantilism.
12:30So this war is breaking down global free trade and forcing nations to build their own independent supply chains.
12:36And on the surface, this looks catastrophic for Japan.
12:39A resource-poor island nation that depends entirely on global trade to survive.
12:45But here is what most people miss.
12:47Japan has been preparing for exactly this scenario for decades.
12:52Japan learned from its experience in World War II, when American naval power cut off its resource supply lines and
12:58brought its economy to its knees,
13:00that depending on foreign supply chains an existential vulnerability.
13:04And it has been quietly building resilience against that vulnerability ever since.
13:09Japan uses approximately half the energy per unit of economic output compared to China.
13:16Half.
13:17It has built some of the world's most advanced energy storage technology.
13:21Its manufacturing processes are the most resource efficient on earth.
13:25In a world where energy is expensive and scarce, that efficiency is not just an advantage.
13:31It is a superpower.
13:33And here is a deeper point.
13:35Japan is an outward looking seafaring nation.
13:38That outward looking mentality, that constant searching for resources and opportunities beyond its own borders,
13:44is exactly what mercantilism rewards.
13:47Nations that know how to engage with the world and extract value from it will thrive in a mercantilist world.
13:54And Japan has been doing exactly that for centuries.
13:56It is not learning a new skill.
13:58It is returning to its deepest national instinct.
14:02Opportunity three.
14:03The China-Japan dynamic.
14:04And now the most important and most subtle opportunity of all.
14:08Most people assume that a rising China is an existential threat to Japan.
14:13And on one level that is true.
14:15China's control of Taiwan would give it leverage over Japan's energy supply lines.
14:21China's growing military power does represent a genuine security challenge for Japan.
14:26But here is what most analysts completely miss.
14:29China and Japan, despite their enormous historical tensions,
14:33actually have fundamentally different mentalities that could allow them to coexist.
14:37China sees itself as the middle kingdom.
14:40The center of the universe.
14:42A self-sufficient nation that has no real interest in or need for the outside world.
14:47China's historical instinct is to turn inward.
14:50To focus on maintaining its own sovereignty and stability.
14:54To avoid foreign entanglements.
14:57Japan is the complete opposite.
14:58Japan is an outward looking seafaring nation.
15:02An island nation that has always had to reach out to the world to survive.
15:06Always trading.
15:07Always exploring.
15:09Always engaging with the outside world.
15:11China wants to be left alone to develop in its own way.
15:14Japan needs to engage with the world to survive.
15:18China turns inward.
15:19Japan turns outward.
15:21These are not competing strategies.
15:23They are complementary ones.
15:25Two nations facing completely different directions.
15:28One looking inward at itself.
15:30One looking outward at the world.
15:32Do not necessarily collide.
15:34And we are already seeing signs of this coexistence in practice.
15:38Despite enormous historical tensions.
15:41Despite territorial disputes in the East China Sea.
15:44China and Japan continue to trade hundreds of billions of dollars for each other every year.
15:50Their economies are deeply intertwined.
15:52Their people travel between the two countries in enormous numbers.
15:56The relationship is complicated.
15:57But it is not and does not have to become a war.
16:01Part four.
16:02The billion dollar question.
16:03So let me bring this all together with a question I started with.
16:06If someone gave me a billion dollars and said invested in East Asia.
16:12China or Japan.
16:14Where would I put it?
16:15I would put every single dollar in Japan.
16:18Not because Japan does not have serious problems.
16:22It does.
16:23Not because the path ahead for Japan is easy.
16:26It is not.
16:27But because of what history consistently and repeatedly tells us about the Japanese people.
16:33Every single time Japan has faced an existential crisis.
16:36The Mongol invasions.
16:38The threat of Western colonization.
16:40The devastation of World War II.
16:42It has responded with extraordinary collective resilience.
16:45Creativity and transformation.
16:47Not gradually.
16:48Not slowly.
16:49But with breathtaking speed and thoroughness.
16:52And right now.
16:53Japan faces another existential crisis.
16:56American protection is becoming unreliable.
16:59China is growing more powerful.
17:01Energy supply lines are under threat.
17:03The global economy is fragmenting.
17:05These are exactly the conditions that historically bring out the best in Japan.
17:10Not the worst.
17:12The best.
17:12Because when Japan faces a wall.
17:14It does not collapse against it.
17:16It finds a way over it.
17:17Under it.
17:18Through it.
17:19In ways that surprise everyone who was watching.
17:22China looks powerful right now.
17:24Its economy is enormous.
17:26Its military is growing.
17:27Its global influence is expanding.
17:30But China's strength is built on a model.
17:32Cheap energy in.
17:34Manufactured goods out.
17:35That this war is destroying.
17:37And China's response to crisis historically has been to turn inward.
17:41To become more insular.
17:43More conservative.
17:44More defensive.
17:46Japan's response to crisis historically has been to transform.
17:51To innovate.
17:52To emerge from the crisis stronger and more capable than it entered it.
17:56That is why I would invest all my money in Japan.
17:59Not because of where Japan is today.
18:02But because of where Japan will be in 10 to 20 years.
18:06After it has done what it always does when its back is against the wall.
18:10So let us just recap what we covered today.
18:12Japan has serious structural weaknesses.
18:15Oldest population in the world.
18:1730 years of economic stagnation.
18:20No natural resources.
18:21Dependent on imported energy.
18:23Vulnerable to Chinese blockade.
18:25All of that is real.
18:26But history tells a completely different story about Japan.
18:29The Mongols invaded twice.
18:32The greatest military empire in the world.
18:35And Japan defeated them both times.
18:36As a feudal divided nation.
18:38The western powers threatened to colonize Japan.
18:41And Japan responded with the Meiji restoration.
18:44Transforming from feudal backwardness.
18:46To an industrial power that defeated Russia.
18:48In a single generation.
18:50America devastated Japan with nuclear bombs and firebombing.
18:54And Japan recovered to become the world's greatest manufacturing power in 20 years.
18:59And now Japan faces another existential crisis.
19:02Unreliable American protection.
19:05Roaring Chinese power.
19:06Fragmented global trade.
19:08And based on everything history tells us about this extraordinary nation.
19:12Japan will respond the way it always responds.
19:15With resilience.
19:17With transformation.
19:18With breathtaking speed.
19:19And it will emerge from this crisis stronger than anyone watching right now expects.
19:25That is why Japan is the surprise winner of this war.
19:28Not because it looks strong today.
19:30But because of what it always becomes when things look their darkest.
19:34Subscribe for more analysis of this conflict and its global consequences explained in simple English.
19:40And tell me in the comments.
19:42Do you agree that Japan will be the surprise winner of this war?
19:46Or do you think another country will emerge stronger from all of this?
19:50I will see you next time.
19:52I will see you next time.
19:52I will see you next time.
19:52And then try to get a better time.
19:52the next time.
19:52The next time.
19:52I will see you next time.
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