The past decade has not been particularly jolly for Japan. In its slow, painful bid for recovery after the Asian financial crisis and the years of stagnation which followed, a quality economy brimming with highly educated workers, cutting-edge technology and no end of marketing innovation has trudged through the greatest global boom in history when all around it have gambolled.

Japanese lives have been led modestly and the pursuit of easy money has been stripped of its cachet. To make matters worse, the world’s most exuberant players have spent those ten years telling Japan how wrong it has been about almost everything.

“Hold less cash and be more leveraged”, the foreign shareholders have screamed. “Let us buy your cranky firms and run them properly”, the foreign buyout merchants have bellowed. “Stop protecting jobs. Let banks and companies fail, you crypto-commies”, cried the capitalists.

The Wall Street party is now dead and the young revellers who once made it such a gloriously drunken blast are now either retching in the streets, arguing incoherently about half-remembered philosophy, or rifling through their loose change to scrabble together a cab fare home.

Looking out from its window in the house across the street, an older, wiser Japan is now nodding sadly: “Been there, done that, still have the liver disease to prove it.”

Is the state of Japan now what lies ahead for a post-financial meltdown world? What ten glimpses of the future emerge if, rather than dismissing Japan as the Ghost of the Crisis Past, it is treated as the more terrifying Ghost of the Crisis Yet to Come?

1) Nobody trusts banks any more: they lent like lunatics and they paid the price with a bad loans crisis that nearly brought them all down, thinks the public. It will be a long time before these institutions are regarded as reliable lenders or as especially intelligent handlers of money, think the corporate bosses.

2) The banks don’t trust anyone any more: those idiots borrowed like lunatics and turned out to be abominable squanderers of the money we lent them. Small and medium-sized businesses and even listed companies are going to have to work extremely hard before they get a yen out of us, think the banks.

3) The corporate world learns to live without banks forcing cash down its throat, and sectors that got used to the idea of endless liquidity have to dramatically reshape themselves for the new reality. Those that survive emerge stronger. Many thousands of small businesses evaporate. Entire shopping streets are boarded up.

4) Companies start holding large quantities of cash as integral and mission-critical elements of their business plans. Pleas from shareholders to return some of that cash or to use it to secure giant borrowings are widely ignored or viewed as subversive nonsense.

5) Corporate thinking is dominated by arch-conservatism and the need to prepare for a “rainy day”. The number of perceived “rainy days” on the horizon appears to increase as the global economy revels in strong growth.

6) Household thinking runs along much the same lines. Consumption plods on robustly but is always cautious and lives with the constant assumption that belt-tightening may be around the corner.

7) People save their money and find it hard to think of stock markets as anything other than conduits of pain and disappointment.

8) The banks take a long time to recapitalise back to secure levels and perform a series of uncomfortable defensive mergers to keep disruption of the system to a minimum. The Government performs a signal bailout of one megabank before quietly informing the industry that it must sort out the rest of the problem itself.

9) The Government becomes an obsessive identifier and burster of incipient investment bubbles. It learns to ignore domestic and foreign outcry when it squashes dreams of a fast buck before they get out of hand.

10) The authorities become especially fierce on the concept of credit, even with interest rates quite low. The sub-prime end of the consumer finance market is effectively banned from borrowing money in the mainstream. If people need to borrow from loan sharks, that’s not good but, at least, the lending from backstreet gangsters is never securitised and given A-grade status by the credit rating agencies.

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