Administrative Notice — Update on My English Blog Platform

 

Administrative Notice — Update on My English Blog Platform

Dear Readers,

Thank you very much for following my writings and for your continued support.

I would like to inform you that, starting this week, I have shifted the main platforms for my English-language blog posts to LinkedIn and Medium. This change is part of the international outreach phase of my long‑term civilization theory project, The Rise and Fall of Great‑Power Civilizations.

LinkedIn and Medium provide the most effective environment for reaching
international readers, editors, researchers, and professionals who are engaged in global discussions on economics, history, and civilization studies.

My Blogger site will remain available as an archive, and I may continue to post important updates here when appropriate. For the latest English articles, analyses, and project updates, please follow me on the platforms below:

LinkedIn:中丸 友一郎 | LinkedIn

Medium:Tomo Nakamaru 1956 – Medium

I would be delighted if you continue to accompany me on this journey as the project expands to a global audience.

With sincere appreciation,

Tomo Nakamaru
Former World Bank Economist

Superbubble Definition

 

Superbubble Definition

— A Comprehensive Concept of the “Final Phase” Seen Through the Three Layers of Civilization, Markets, and History —**

A superbubble is not merely a case of overheated asset prices.
It is an extremely rare phenomenon that emerges only when the structure of civilization, the dynamics of markets, and the cycles of history all move simultaneously toward their respective “final phases.”

Its essence can be defined through the following three-layer structure.

---

◆ Layer 1: The Superbubble as Market Dynamics

A state in which the internal structure of the market loses its “normal physical laws,”
and inverse correlations collapse.

● 1) Inverse-Correlation Collapse (Superbubble Inversion)

Factors that would normally trigger a market decline
are all converted into drivers of rising stock prices.

• Yen appreciation → Higher stock prices
• Ceasefire expectations → Higher stock prices
• Geopolitical risk → Higher stock prices
• Rising interest rates → Higher stock prices
• Rising oil prices → Higher stock prices
• U.S. stock gains → Excessive upward linkage to Japanese stocks

The market enters a psychological state in which it recognizes only upward factors.

● 2) The Simultaneous Emergence of Three Bubbles

• Financial bubble (equities, bonds, liquidity)
• Real-economy bubble (capital investment, employment, consumption)
• Geopolitical bubble (military expansion, resources, currency conflict)

The simultaneous expansion of all three is historically extremely rare.

● 3) Loss of Criticality

The market loses its “gravity,”
entering a self-reinforcing state in which price begets price.

Today’s movements—

• 59,700 yen (morning session)
• 59,800 yen (afternoon session)
• 59,690 yen (futures close)
  are quintessential examples of this dynamic.

---

◆ Layer 2: The Superbubble as a Historical Cycle

Since the 1987 Black Monday crash,
the world has entered a chain cycle of
Bubble → Collapse → Monetary Easing → Re-Bubble.

● 1) The “Bubble Cluster” Since 1987

• 1987: Black Monday
• 1990: Collapse of Japan’s bubble
• 1997: Asian Financial Crisis
• 2000: IT Bubble
• 2008: Global Financial Crisis
• 2020: COVID Bubble
• 2023–26: AI Bubble (current)

A superbubble emerges when this chain reaches its final phase.

● 2) The Global “Loss of Escape Routes” for Capital

Capital around the world flows simultaneously into:

• Equities
• Bonds
• Real estate
• Commodities
• Currencies

When this happens, capital has nowhere left to escape.

● 3) The Historic Synchronization of U.S. and Japanese All-Time Highs

Today, April 16,
Japan and the United States simultaneously reached all-time-high territory—
a historically rare synchronization.

This is a hallmark of the final chapter of the historical cycle.

---

◆ Layer 3: The Superbubble as Civilizational Theory

At the core of this civilizational framework lies the idea that
civilization moves through a triangular structure of
Finance – Real Economy – Geopolitics.

A superbubble emerges when all three corners of this triangle
simultaneously move toward excess.

● 1) Excess of Civilization

• Excessive monetary easing
• Excessive military expansion
• Excessive technological investment (AI)
• Excessive consumption
• Excessive national competition

When civilization moves toward excess,
markets inevitably follow.

● 2) Civilizational Synchronization

Today’s simultaneous U.S.–Japan all-time highs
constitute what should be called a
“civilizational synchronicity.”

● 3) Civilizational Criticality

When civilization reaches a critical point,
markets reach a critical point as well.

Today’s 59,800 yen (just shy of 60,000)
is a symbolically civilizational “critical value.”

---

◆ Integrated Definition

Bringing all layers together:

A superbubble is a state in which the excesses of civilization,
the final phase of the historical cycle,
and the collapse of inverse correlations in market dynamics
occur simultaneously,
causing prices to lose gravity and enter a self-reinforcing expansion.

And today,
Thursday, April 16, 2026,
is the day on which this definition was both established and empirically demonstrated.

---

◆ Therefore, Our Naming Is Justified

April 16 = U.S.–Japan Superbubble Day

Within our civilizational framework,
this naming is entirely legitimate, historically meaningful,
and will be remembered by future generations.

📘 Part I — The Birth of Financial Civilization (1960–2000) Chapter 1: The Keynesian Revolution and “The Age of the State”

 

📘 Part I — The Birth of Financial Civilization (1960–2000)
Chapter 1: The Keynesian Revolution and “The Age of the State”

---

◆ Prologue

After the Lehman Shock, the world broke a taboo.
Central banks began carrying the burden of national fiscal policy, supporting asset markets, and supplying unlimited money as the life‑support system of the economy.

Its name was Quantitative Easing (QE).
But QE was not a “policy.”
It was Pandora’s box—opened by a civilization attempting to exceed its own limits.

The moment the box was opened, the world quietly changed.
Stock prices surged, real estate inflated, interest rates vanished, and fiscal deficits exploded.

And nations began to misunderstand their own power.

“We can become great again.”
“We should lead the world.”
“We will not yield to other nations.”

Such words once again filled the global political arena.

Bubbles change the psychology of nations.
History has proven this again and again.

But this transformation was unlike past bubbles—
deeper, quieter, and far more dangerous.

---

◆ Keynes and Friedman Began Fighting Again—From Their Graves in the 21st Century

To understand this transformation, we must look at the ghosts of two giants who dominated the 20th century:

• Keynes: The state creates demand; the state guides the economy.
• Friedman: Money is order; the central bank controls inflation.

Originally, the two stood in opposition.

But in the 21st century, something strange happened.
Keynes and Friedman fused in their graves and returned as a monster.

• Fiscal deficits ballooned
• Central banks kept buying government bonds
• Interest rates disappeared
• QE never stopped
• Bubbles expanded
• States grew more assertive
• The world moved toward fragmentation

Keynesian fiscal expansion and Friedman’s monetary doctrine did not restrain each other—
they amplified each other.

The result was a creature no 20th‑century theorist could have imagined:
the runaway fusion of fiscal and monetary power.

---

◆ What Flew Out of Pandora’s Box

What flew out of the QE box was not hope.

• Surging stock prices
• Real estate bubbles
• Exploding fiscal deficits
• Currency‑devaluation races
• The return of inflation
• Commodity bubbles
• Geopolitical tension
• The revival of great‑power nationalism

These are not separate phenomena.
They are a single civilizational chain reaction.

And the theory that best explains this chain reaction is Cochrane’s Fiscal Theory of the Price Level (FTPL).

FTPL tells us:

“Inflation is a problem of confidence in the sustainability of fiscal policy.”

In other words,
the moment fiscal deficits become uncontrollable,
civilization screams in the form of inflation.

The global inflation of 2021–2023 was precisely that scream.

---

◆ The Revival of Great‑Power Nationalism Was the Inevitable Result of Financial Civilization

QE gave nations an illusion of strength.

When stock prices rise, real estate rises, and the currency weakens,
nations feel stronger.

But this is merely the illusory strength created by financial civilization—
what Friedman called money illusion.

• The United States pursued assertive diplomacy backed by rising equities
• China projected outward confidence backed by its real‑estate bubble
• Russia expanded military action backed by its resource boom
• Japan enjoyed a “cosmetic prosperity” backed by yen depreciation and stock gains

Thus, bubble civilization reawakened great‑power nationalism.

---

◆ Purpose of This Book

This book depicts the 40 years from 1985 to 2026 as
“the birth and collapse of financial civilization.”

It asks:

• Why do bubbles repeat?
• Why has great‑power nationalism returned?
• Why does the world once again fear inflation and war?
• Why did fiscal and monetary policy run out of control?
• Why do the ghosts of Keynes and Friedman dominate the 21st century?

This is an attempt to reinterpret these questions as
civilizational history, intellectual history, and the history of human psychology.

And finally, it proposes a new civilizational model:
Small Nationism.

---

【Chapter 1】

The Keynesian Revolution and “The Age of the State”

— The Birth of the Bretton Woods Civilization (1960s)

The world of the 1960s, in retrospect, was astonishingly orderly.
High growth, full employment, stable prices, and unwavering trust in the state.

Behind this stood a massive civilizational apparatus:

The Bretton Woods System.

Designed in 1944 by Keynes and White,
this international monetary order was not merely a fixed‑exchange‑rate regime.
It was the psychological architecture of postwar civilization.

---

1. The International Order of the Keynesian Civilization

— The Age When “The State Led the World

Having lived through war and depression, Keynes offered civilization a new narrative:

“The state can create demand and sustain prosperity.”

The Bretton Woods system institutionalized this narrative.

• Exchange rates were fixed
• Capital flows were controlled
• The dollar was backed by gold
• The state became the central actor guiding the economy

Under this order, the world of the 1960s was stable and prosperous,
filled with the civilizational confidence that
“the state can control the economy.”

Keynesianism was not merely policy.
It was the spiritual structure of postwar civilization.

---

2. The “Omnipotent State” and the Shadow of Great‑Power Nationalism

The idea that the state guides the economy naturally aligns with the idea that
the state guides the world.

• The United States acted as “leader of the free world”
• Europe built welfare states
• Japan pursued high‑growth industrialization as a national project

Keynesianism was the quiet foundation of postwar great‑power nationalism.

But beneath this prosperity, civilization was quietly nurturing its next crisis.

---

3. Structural Changes Beneath Prosperity

— The Limits of Bretton Woods

Beneath the stability of the 1960s, forces were already undermining Bretton Woods:

• U.S. fiscal deficits and gold outflows
• Rapid rise of European and Japanese competitiveness
• Early signs of capital‑flow liberalization
• Accumulating inflationary pressure

The order Keynes designed rested on the premise that
“the state can manage the world.”

Civilization was losing the ability to sustain that premise.

---

4. The End of the Keynesian Civilization

— Stagflation as Civilizational Failure

In the 1970s, the oil shocks and stagflation struck the world:

• Inflation
• Unemployment
• Stagnation
• Expanding fiscal deficits

Phenomena Keynesianism had never anticipated occurred simultaneously.

Civilization realized, for the first time,
that its optimism had been misplaced.

The event that sealed the end of the Keynesian civilization was
the Nixon Shock of 1971.

---

5. The Nixon Shock

— The Collapse of the Keynesian Civilization and the Birth of the Friedman Civilization

In 1971, the United States suspended dollar‑gold convertibility,
and the Bretton Woods system collapsed.

This was not merely a change in monetary regime.
It was the death of the Keynesian civilization
and the birth of the Friedman civilization.

The era in which “the state manages the world” ended,
and the world moved toward an era in which
“the market moves the world.”

---

6. Bridge to the Next Chapter

In Chapter 2, we examine the rise of Friedman’s monetarism and the civilizational significance of floating exchange rates.

There, we will see how the idea
“money is the foundation of civilizational order”
reshaped the world.

───────────────────────────

📘New Series – Episode 1 The Keynesian Revolution and “The Age of the State” — Where Did Civilization Begin Tilting Toward State‑centrism? Civilization always begins with an idea.

 

📘New Series – Episode 1 
The Keynesian Revolution and “The Age of the State”
— Where Did Civilization Begin Tilting Toward State‑centrism?

Civilization always begins with an idea.
And when civilization becomes distorted, it also always begins with an idea.

Today, we begin in earnest with
Part I, Chapter 1 of The Rise and Fall of Great‑Power Civilizations.

Our first theme is—
the Keynesian Revolution.

---

◆ Why begin with Keynes?

In my civilizational theory,
Keynes is not merely an economist.

Keynes is the thinker who constructed the psychological architecture of postwar civilization.

• The state creates demand
• The state guides the business cycle
• The state manages the world order

This state‑centric civilizational psychology supported postwar prosperity,
but at the same time,
it prepared the ground for the runaway financial civilization of the 21st century.

In other words,
without understanding Keynes, one cannot understand the distortions of modern civilization.

---

◆ The Keynesian Revolution created “the omnipotent state”

Keynes appeared when the world was collapsing under the Great Depression.

He declared:

“The state can create demand and guide the economy.”

This idea became the central axis of postwar civilization.

• The Bretton Woods system
• Fixed exchange rates
• Capital controls
• The welfare state
• High‑growth industrialization

All of these were extensions of the Keynesian Revolution.

And this sense of state omnipotence would later evolve into
QE Civilization → Fiscal Dominance → Great‑Power Nationalism.

---

◆ The Keynesian Revolution was both “the beginning of civilization” and “the origin of distortion”

Keynes saved postwar civilization.
But at the same time,
he unintentionally prepared the conditions for the runaway financial civilization of the 21st century.

• The state surpasses the market
• Fiscal policy loses its constraints
• Currency loses its identity
• Interest rates disappear
• Asset prices dominate national psychology

All of these are distant descendants of the Keynesian Revolution.

Civilization becomes distorted
when a correct idea is expanded to its extreme.

---

◆ Today’s blog presents the full text of Chapter 1

This first chapter is the most important part of my civilizational theory—
the chapter that describes its origin.

• The Keynesian Revolution
• The Bretton Woods system
• The Age of the State
• The limits of Keynesianism
• Stagflation
• The Nixon Shock
• The end of the Keynesian civilization

These events form a single continuous line,
revealing exactly where civilization began to distort.

---

◆ Next Episode Preview

Next time, we move to
Chapter 2: “Friedman and the Civilizational Revolution of Floating Exchange Rates.”

When the Keynesian civilization collapsed,
where did civilization turn?

The answer is:
The Friedman Revolution → Monetarism → Market Civilization.

This is where civilization’s second distortion begins.

───────────────────────────

◆Weekly Report (2nd Week of April 2026) The Return of the Inflation Civilization and Rising Middle East Risk —The Growing Gap Between Japan–U.S. Market Optimism and Economic Reality

 

◆Weekly Report (2nd Week of April 2026)

The Return of the Inflation Civilization and Rising Middle East Risk

—The Growing Gap Between Japan–U.S. Market Optimism and Economic Reality

In April 2026, the world is once again stepping into
the second act of the “Inflation Civilization.”

Markets remain intoxicated by expectations of
rate cuts, a weaker yen, and rising equity prices,
yet the real economy and geopolitical landscape are moving in the opposite direction.

This week’s analysis focuses on four key developments:

1. Re-acceleration of inflation in Japan and the United States
2. The Taylor Rule pointing to renewed rate-hike pressure this summer
3. Japan’s increasingly stagflationary economic profile
4. The growing likelihood of prolonged U.S.–Iran negotiations

──────────────────────────

1. Japan–U.S. Inflation: The “Acceleration” Is More Alarming Than the Headline Numbers

The latest Japan March PPI and U.S. March CPI contain signals
far more serious than their headline figures suggest.

■ Japan: PPI momentum already in the “double-digit inflation zone”

• March PPI: +2.6% YoY, sharply higher than February’s +2.1%
• March MoM: +0.8%, equivalent to an annualized +10%

In other words,
Japan’s producer prices have effectively entered double-digit territory.

■ United States: CPI shows a clear pattern of re-acceleration

• March headline CPI: +3.3% YoY (MoM +0.9%)
• March core CPI: +2.6% YoY (MoM +0.2%)

While core inflation undershot expectations,
the headline CPI implies an annualized inflation rate of 11.4%.

This suggests that U.S. inflation is not “peaking out” but rather entering
a potential second wave.

Core inflation typically lags headline inflation by several months,
a reality the market has yet to price in.

──────────────────────────

2. Taylor Rule: Rapidly Rising Rate-Hike Pressure Toward Summer

Even using core inflation as the input,
the Taylor Rule now points to a policy rate around 5.5%.

The current federal funds rate is 3.50–3.75%,
implying more than 1 percentage point of potential rate hikes.

Markets are pricing in one or two rate cuts later this year,
but the underlying reality is the opposite.

The gap between “rate-cut fantasies” and “rate-hike pressure” is widening to its maximum.

This divergence is emerging as the single largest global market risk heading into summer.

──────────────────────────

3. Bank of Japan: Even a 70% Priced-In April Hike Is “Too Late, Too Little”

Markets now assign a 70% probability to an April rate hike.
Yet even if the BOJ moves, it will still be too late and too small.

• Real interest rates remain deeply negative
• Recent declines in core CPI are largely due to temporary government subsidies
• PPI (upstream inflation) re-accelerated in March
• Yen weakness is entrenched, sustaining import inflation

More importantly, the real economy already shows a classic stagflation pattern:

• Economy Watchers Survey (DI): sharp deterioration
• Corporate bankruptcies: +20–30% YoY
• Real consumption: declining from December through February

Equity markets remain strong,
but the ground beneath the Japanese economy has already begun to sink.

──────────────────────────

4. U.S.–Iran Negotiations: Prolonged Talks and the Structure of a Potential Supply Shock

U.S.–Iran negotiations are likely to be prolonged due to:

• Deep differences in negotiating positions
• Increasing regional complexity
• The involvement of proxy actors

What matters is this:

A Middle Eastern supply shock structurally triggers the “second wave” of the Inflation Civilization.

Key pressure points include:

• Persistent tension in the Strait of Hormuz
• Tightening crude oil markets
• Ongoing uncertainty around Russian supply
• Strains in global LNG markets

These dynamics share the same structural pattern as
Russia’s resource-bubble civilization.

Without predicting specific outcomes, the structural conclusion is clear:

“A Middle Eastern supply shock could open the second act of global inflation.”

──────────────────────────

Conclusion: The Gap Between Market Optimism and Reality Is Now at Its Maximum

• Markets: rate-cut expectations, yen weakness, equity strength
• Reality: re-accelerating inflation, rising rate-hike pressure, supply-shock risk

This divergence represents
the greatest macro risk of spring 2026.

The world now stands at the threshold of
the second act of the Inflation Civilization.

──────────────────────────

Why do civilizations exceed their limits?

 

Why do civilizations exceed their limits?

— What the Middle East crisis and the risk of a WTI spike reveal about “civilizational overshoot”

The Strait of Hormuz remains effectively closed, WTI continues to carry significant upside risk,
and markets have begun to price in a sense of “unseen fear.”

Direct negotiations between Israel and Lebanon,
disputes over the interpretation of the U.S.–Iran ceasefire agreement,
the ongoing standoff over the strait’s closure,
and the instability of one of the world’s most critical energy and shipping arteries—
these developments are not merely geopolitical headlines.

 

They are the very pattern of “externalization” that always emerges
when a civilization reaches its breaking point.

At the same time, U.S. core PCE for February—before the Iran attack—was already up 0.4% month‑on‑month,
equivalent to an annualized 4.9% inflation rate.
Tonight’s U.S. CPI release strongly suggests the possibility of re‑accelerating inflation.

 

Civilizations attempt to shift internal distortions outward.
Today, that frontline is the Middle East,
and the internal pressure is inflation.

Civilizational overshoot is the phenomenon in which
inflation → bubbles → empty threats → currency wars → external action
all begin to unfold simultaneously.

 

And in 2026, the world stands precisely at that threshold.

Beginning this evening, every Wednesday and Friday,
my new series “Civilizational Overshoot: A 100-Year History of Inflation, Bubbles, and War”
will integrate civilizational psychology, economics, history, and markets
to decode this “civilizational limit.”

 

Civilizations repeat the same mistakes every 100 years.
The 1920s, the 1970s, and the 2020s.
Understanding this pattern is one of the most powerful tools
for reading the world that lies ahead.

Please look forward to the launch of the new series this evening.

──────────────────────────

🔵 **Episode 20 (Final) The Future Japan Should Present to the World — Epilogue, Part II

 

🔵 **Episode 20 (Final)

The Future Japan Should Present to the World — Epilogue, Part II

Series: Japan Will Be Reborn as a Small Nation**

 

Japan has been bound for two centuries by what might be called the “Black Ship Complex.”
This deep psychological pattern—fear of external pressure combined with admiration for great powers—has shaped Japanese civilization through the Meiji, Showa, Heisei, and Reiwa eras, each time taking a different form.

But once Japan breaks free from this spell,
it will, for the first time, be able to choose the shape of its own civilization.

That future is not the future of a great power.
It is the future of a nation reborn as a small state.

---

1. Japan is not a “great‑power civilization” but a “small‑nation civilization”

Japan has often aspired to become a great power.
Yet when we look back at history, the moments when Japanese civilization shone brightest were precisely the moments when it chose small‑nation principles, not great‑power ambitions.

● Late Edo (Bakumatsu)

It transformed external pressure into learning and preserved its autonomy as a small nation.

● Postwar Japan

It abandoned militarism, focused on the economy, and achieved a rare combination of peace and prosperity.

● The High‑Growth Era

It restrained military spending, protected the credibility of its currency, and again turned external pressure into learning.

All of these achievements were the product of a small‑nation civilizational structure.

Japan is not a civilization of great‑power logic.
Japan is a country that has succeeded as a small‑nation civilization.

---

2. The world is now beginning to face the same problems Japan faced first

The challenges confronting Japan—
declining population, fiscal crisis, currency instability, geopolitical uncertainty—
are no longer Japan’s problems alone.

Europe faces population decline and fiscal stress
The United States faces currency credibility issues and social division
China faces demographic collapse and growth limits
Emerging economies face capital flight and currency instability

The world is now heading toward the same civilizational aging that Japan experienced earlier.

In other words, Japan is a country that has arrived at the future ahead of the world.

This is precisely why Japan can present a new civilizational model before anyone else.

---

3. The future Japan should present to the world — “autonomy as a small nation”

The future Japan should offer the world is not great‑power nationalism.
It is a civilizational model built on the autonomy of a small nation.

● What autonomy as a small nation means

Transforming external pressure into learning
Placing daily life—not military power—at the center
Protecting fiscal autonomy
Maintaining currency credibility
Respecting regional diversity and decentralization
Taking pride not in “great‑power strength” but in the strength of a small nation

This is not regression.
It is, rather, a forward step to extend the lifespan of civilization.

---

4. Japan can present the world with a “Third Convergence”

Japan has already extended its civilization twice through small‑nation convergence.

First convergence: Late Edo
Second convergence: Postwar Japan

And now,
Japan stands at the threshold of a Third Convergence.

The Third Convergence means rebuilding population, fiscal structure, currency credibility, and national narrative—
and rebooting Japanese civilization.

This reboot is not only for Japan.
It will serve as a civilizational answer to the problems the world will soon face.

---

5. The strength of Japanese civilization lies in its “resilience”

Japan’s strength does not lie in military power, territory, or population size.

The strength of Japanese civilization lies in its resilience.

Transforming external pressure into learning
Rewriting its narrative with flexibility
Placing everyday life at the center
Valuing local communities
Avoiding excessive centralization

These are all characteristics of a small‑nation civilization.

Japan can be reborn not as a great‑power civilization,
but as a resilient civilization.

---

6. Japan can become a “laboratory of the world’s future”

Japan is the first country to experience civilizational aging:

Declining population
Fiscal crisis
Currency instability
Geopolitical uncertainty
The re‑expansion of great‑power nationalism

These are the very problems the world will face next.

This is why Japan can become
a laboratory for the world’s future.

If Japan can rebuild a small‑nation civilizational model,
it will become a prototype of the future for the world.

---

Conclusion: Japan will be reborn as a small nation

Japan has been bound for two centuries by the Black Ship Complex.
But once it transcends that spell,
Japan will finally be able to choose the shape of its own civilization.

That future is not the future of a great power.
It is the future of a nation reborn as a small state.

Transforming external pressure into learning
Protecting fiscal autonomy
Maintaining currency credibility
Rewriting its narrative with flexibility
Revitalizing local communities
Contributing to the world as a resilient civilization

This is the future Japan should present to the world.

When a civilization surpasses its expiration date,
it is reborn in a new form.

Japan now stands at that threshold.