In my February 2010 Publisher’s Note, I wrote about old demons haunting Japan and holding it back from any meaningful recovery. On my last trip to Japan, after meeting with several large investors and attending a real estate conference, I found out that all of Japan’s old demons start with a “D.” Here they are in order of importance: demographics, deflation, debt and Democratic Party.

Much has been said and written about all of them, but what surprised me was the order of importance that most people I spoke with agreed upon. A dwindling population and increasing number of retirees was cited as problem number one. The consensus was that the only way to improve the situation is through immigration, and we all know how inflexible the Japanese society is in absorbing foreigners.

Incentives to have more babies, introduced by the government, do not seem to go far enough to have any impact. However, I was surprised to learn about small-scale pilot programs that the go