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[COVID-19] Let's Prophesy the After-Corona Era — The Grand Predictions of Gonjicchistradamus

In a nutshell

  1. Where we stand with COVID-19: it didn’t remain a simple infectious disease—it triggered irreversible political conflict and economic damage.
  2. Prophecy 1: East Asia’s map will change.
  3. Prophecy 2: Consumer money with nowhere to go is flowing into personal investing, creating gaps for new businesses.
  4. Prophecy 3: Watch the hollowing-out of multi-tenant buildings in Tokyo and falling property prices—real-estate investment opportunities are surfacing.


Quick COVID Recap


The first pandemic in a century has reshaped everything. Before the prophecies, let’s review the basics.


Globally, the United Nations is fraying. The U.S. and China are locked in confrontation. Geopolitics look alarmingly like the 1930s, right before war. Financial markets are in a bubble. Case counts aren’t abating. Research into symptoms and vaccine development is making progress.


In Japan, inbound tourism and travel businesses are in dire straits. Regional economies rely on tourism and transportation, so losing both cripples daily life. Hospitals and frontline workers are exhausted. Meanwhile retail investors are powering an oddly bullish market.


Closer to home, favorite restaurants are closing. Walk around town and you’ll see vacant storefronts everywhere. Supermarkets and drugstores, on the other hand, are thriving.


As severe COVID cases accumulated, countries with robust healthcare systems—Japan included—have learned how to keep fatalities near zero.


We know that critical cases stem from cytokine storms (the immune system attacking the body) and blood clots that trigger strokes or heart attacks. If you administer immunosuppressants and thrombolytics when symptoms appear, patients can pull through. In other words, Japan’s current medical system can largely prevent deaths.


Given that, in Japan we should now be more worried about the economy than the virus itself.



The Grand Prophecies of Gonjicchistradamus


Dun dun. Gonjicchistradamus here. First time since 1999. Let me lay out the prophecies.


Military Clash in East Asia Within 5–10 Years


Unfortunately, today’s geopolitical reality points to imminent border changes in East Asia. The collapse of the UN as the U.S.–China rivalry escalates—and the break in diplomatic relations that could lead to military conflict—is historically plausible.


It’s obvious that countries worldwide are adopting belligerent stances. The situation mirrors Europe right before World War I and East Asia right before World War II.


So far we’ve avoided war only because the balance of military power—especially tactical nuclear weapons—remains lopsided in favor of the U.S. China is ramping up defense spending, and when it reaches parity with the U.S., the whole world will be forced to pick sides. Eventually that tension will demand a resolution.


The only path to a peaceful scenario is for either the U.S. or China to soften its position, which is highly unlikely.


The Korean Peninsula is equally precarious. Cut off from economic aid, North Korea is reaching its limits and has little choice but to provoke the outside world. On top of that, the regime has to transfer authority from Kim Jong-un to Kim Yo-jong.


Historically, regimes on the brink of collapse manufacture external enemies to rally the populace and create a battle-ready mindset, so we cannot let our guard down. If there’s going to be another war besides the U.S.–China showdown within the next 5–10 years, it may well be a resumption of the Korean War.



Irreversible Shifts in Industrial Structure


With COVID and rising geopolitical risk, we must accept that industrial structures have shifted irreversibly.


I want to stress that word: irreversibly. There is no “going back to normal once the pandemic settles.” The bubble never returned.


We have to assume that pre-COVID life is gone. Industries that flourished in peaceful times—travel, service businesses in international hubs—are now in serious trouble. Demand will inevitably shift from exports to domestic markets, and from services back to primary and secondary industries. That’s where the business opportunities lie.


Of course, some sectors will shrink while others grow. The new keywords are online, domestic demand, automation, and the primary/secondary industries. The river has changed course. Start digging your irrigation channels now.


Prophecies aren’t prophecies without specifics, so here goes. “Online” doesn’t mean everything must move online; if anything, offline value is rising. Absence makes the heart grow fonder.


Online classes and online fitness shouldn’t be fully remote businesses. The standard will be a primarily online experience with occasional, richly supportive offline sessions. Offline touchpoints with customers will become more precious.


Conversely, services premised on offline experiences need to accept that the old high price points are gone. Broaden the customer base and earn thinner margins from a wider audience.


Personally, I’m rooting for the restaurant industry, so I hope property prices get reset to sensible levels soon. With social distancing, restaurants can’t make money—seat utilization is everything. That means rents must be renegotiated for an after-corona world.


Domestic demand: the discretionary income people once spent on overseas trips and luxury bags abroad will now flood back into Japan. Local specialties, produce, and highway rest-stop (michi-no-eki) goods are about to get their day. I can see mobile retail vans doubling as local transportation, or pop-up antenna shops on wheels, becoming big opportunities. MUJI’s move below is a standout, and honestly I’d love for them to run bus lines. They can build the bus stop right in front of their store.



Selling rice online, too—anything that delivers an “at-home luxury” experience. Regional economies can grow digitally. Online michi-no-eki will explode. At my house we swear by Yuzu Ponzu from Umajimura.


And within domestic demand, expect money to flow into financial products and self-investment—think hair removal, cosmetic surgery, LASIK.