(Reporter Kelly, Tokyo, 27th)
Introduction | The Sense of Disorder Comes from the Loss of Familiarity
Many people use one word to describe the world in recent years—chaotic.
Policy failures, volatile markets, and omnipresent risks give the impression that all prior experience has become invalid.
Yet the world has not suddenly collapsed. Rather, multiple “old rules” that once provided stability have simultaneously lost their binding force. The realities of 2025 indicate that we are in a transitional period: the old mechanisms of stability are gradually losing efficacy, while new operational logics have yet to fully form. This gap between the old and new is at the root of the global sense of “chaos.”
Monetary Policy Is No Longer a Panacea
For decades, central banks were seen as the ultimate stabilizers. No matter the crisis, people expected institutions like the Federal Reserve to “backstop” the economy using interest rate tools. However, the reality of 2025 is that this “central bank rescue” playbook is gradually losing effectiveness in the face of political pressures, missing data, and structural inflation.
Small Story | The Fed Navigates a Fog of Missing Data
In October 2025, the Federal Reserve faced a dilemma over whether to cut interest rates amid the widespread absence of key economic data. From October 1, the U.S. federal government shutdown due to a budget deadlock, halting releases from the Bureau of Labor Statistics, the Commerce Department, and other agencies. Fed Chair Powell acknowledged that policy decisions were being made with “no risk-free path” available.
Weak economic signals were impossible to ignore. The government’s last pre-shutdown report showed that nonfarm payrolls for August increased by only 22,000, while the unemployment rate rose to 4.1%. The data revealed a decrease in full-time positions coupled with a surge in part-time roles, reflecting the pressures on workers amid rising living costs.
Ultimately, the Fed decided to cut rates amid the data fog, but this did not provide certainty to the market. Rate-cut expectations had already been largely priced in, and there were significant internal disagreements on the Fed’s subsequent path. More importantly, monetary policy faced unprecedented political interference. Former President Trump repeatedly criticized the Fed for not cutting rates quickly enough and attempted to influence its independence through personnel appointments. Former Fed officials noted that the direct effect of rate cuts on employment had not been fully empirically verified, leaving monetary policy caught in a no-win scenario.
The Marginal Benefits of Globalization Are Disappearing
Globalization once told a self-evident growth story—companies could seek optimal costs worldwide, consumers enjoyed affordable and high-quality goods, and the flow of capital and technology created broad prosperity. But in 2025, that story has been rewritten. The logic of cost optimization is being replaced by principles of security, controllability, and political priority.
Small Story | Efficiency Yields to Political Priorities
In spring 2025, the United States imposed differential tariffs of up to 50% on goods from the Asia-Pacific region, reshaping global trade. Companies discovered that strategies to avoid tariffs through “relocation of production” no longer worked; they had to build expensive “distributed supply networks” with production spread across multiple countries to mitigate policy risks.
Richard May runs a cabinet manufacturing company in Texas, a classic product of the globalization boom—designed in the U.S., with high-quality hardware sourced from Asia. The new tariffs increased component costs by over 50%, effectively delivering a “death sentence” to his business. Overnight, key parts from essential supply regions became prohibitively expensive, rendering his products uncompetitive. He noted that the previously reliable rule of “efficiency first” under globalization could not withstand the new logic of “security and political priority.”
Meanwhile, a silent industrial migration is underway. In 2025, the Japanese precision manufacturing giant Nippon Clockwork Co., Ltd. closed two auto seat factories in China, investing instead in India to the tune of tens of billions of yen. The rationale was stark: the market share of Japanese brands in China fell from 24.1% in 2020 to 14.7% in 2024. Withdrawal became a rational, low-cost choice.
Globalization has not disappeared, but its intrinsic driver has shifted from “efficiency first” to “security and controllability first.” Multinational corporations now prioritize resilience to geopolitical risk over absolute cost minimization. The rise of technological sovereignty and domestic supply chains is ending the previous “center-periphery” distribution of industrial benefits.
Technology No Longer Automatically Creates Broad Prosperity
The notion that “technological progress benefits all humanity” was once taken for granted. In 2025, however, the rapid advance of frontier technologies such as artificial intelligence presents a more complex picture: while creating enormous wealth, technology is simultaneously amplifying social inequality at unprecedented speed and precision.
Small Story | Automation and Wage Stagnation in the U.S.
Sarah, a former medical imaging analyst in San Francisco with a master’s in biomedical sciences, earned $85,000 annually. In early 2025, her company implemented an AI diagnostic system with over 95% accuracy. “Of the 30 people in our department, 22 were laid off within three months—including me,” she said. Ironically, the company’s stock rose 35% thanks to this AI technology.
In 2025, U.S. stock markets continued to rise amid the AI boom, yet the benefits largely accrued to top households. The wealthiest 1% of American families own roughly half of the nation’s stocks and fund assets. Over the past three years, approximately 75% of S&P 500 returns came from AI-related companies, turning the AI boom into a “wealth accelerator” for the top.
In contrast, the bottom 50% of U.S. households collectively hold only 1% of stock wealth. For them, the AI revolution represents more anxiety about replacement than opportunity. Studies show that AI’s employment impact is especially concentrated among women and young workers. This division is global: in Asia-Pacific, AI could generate nearly a trillion dollars in value, yet millions of jobs face disruption.
Risk Is Being Repriced
During the past era of low inflation and high growth—the “Great Moderation”—many risks were masked by cheap capital costs and optimistic expectations for the future. In 2025, these long-ignored risks are reemerging sharply and being measured at higher “prices” by both markets and individuals.
In April 2025, the International Monetary Fund’s Global Financial Stability Report issued a warning, listing three major risks: the potential for sharp corrections in overvalued assets, high leverage in non-bank financial institutions triggering chain reactions, and sovereign debt accumulation reaching 93% of global GDP. The report noted that geopolitical events could ignite market turbulence.
Small Story | Geopolitical Risk Premiums Redefine Calculations
Rising macro risks are directly reflected at the micro level. In early 2025, China’s consumer finance industry witnessed a symbolic phenomenon: non-performing asset portfolios were frequently sold at “10% of face value” or less. For example, a company with NPLs totaling 581 million RMB saw a starting sale price of just 50.2 million RMB—a discount of 0.86x. Industry insiders explained that low pricing was a fair market assessment of risk.
This is not isolated to finance. In suburban Stuttgart, a high-end industrial cleaning equipment firm previously calculated overseas project investments mainly based on logistics, tariffs, and market demand. In 2025, their formula changed completely. When considering expanding a U.S. production line, the board’s discussion centered not on ROI but on the question: “If the next government changes trade rules again, will our investment be lost?” This unquantifiable “geopolitical risk premium” became the core of decision-making. Ultimately, they shelved expansion plans and focused on strengthening supply chain resilience at European headquarters.
Globally, companies are increasing geopolitical risk premiums in investment evaluations; individuals are factoring in higher risks of technological disruption in career planning; governments are prioritizing supply chain risk in industrial policy. Risks have not vanished—they were simply underestimated under old rules. Now, all participants are approaching the future with greater caution and pessimism, paying higher “premiums” for real risks.
Reporter’s Reflection | The World Isn’t in Disorder; It’s Undergoing Renewal
Kelly
We are in a profound transitional period. The efficacy of monetary policy is waning, the inclusive benefits of globalization are fading, technological progress is not universally reaching everyone, and previously overlooked risks are returning with force. Together, these factors define the backdrop of 2025: beneath the surface of chaos and disorder lies a silent but resolute replacement of rules.
The sense of disorder fundamentally stems from the retreat of “familiar security.” The frameworks of expectations regarding growth, distribution, and stability that we once relied on are disintegrating. Yet the seeds of new rules are sprouting. In turbulent global trade, regional economic integration (e.g., RCEP) becomes increasingly valuable; in light of technological divergence, calls for skill development, ethical governance, and inclusive growth intensify; in an era of risk reassessment, resilience—whether in national economies, supply chains, or individual careers—emerges as a new survival philosophy.
The world is not in chaos; it is undergoing a dramatic adjustment, awaiting and nurturing a set of new rules yet to fully take shape. Recognizing this may not eliminate the current turmoil, but it provides a measure of stability and foresight amid the waves of change.
If you want, I can also make a more concise, polished English version that reads like a professional financial analysis report for international audiences, keeping all key insights. Do you want me to do that?
