Economic Power Shifts, The West is Losing Traction
Posted by Martin C. Fox on April 19, 2014
When I first heard of China buying our debt I thought-This isn’t supposed to be happening. This is America. What have they got that we don’t?
Cash. China has lots of cash to spend because they print it like US. That is why they are in a manufacturing bubble. Their bubble like ours will certainly burst. But when and how will they react?
The debt buying is an indicator of a power shift. A drop for the US more than a rise in China.
I agree with the opinion that the economic and political power of the West, the US in particular, is shrinking. The failed drug war, the holes in the Middle East which we are digging deeper, finding terrorists under every rock, lately African rocks and other feeble attempts to grab power. Too many failures. Too much scrambling. The US is looking desperate. We are a mess.
What is the purpose of taunting Russia and China, nuclear powers, other than to make us seem tough? When Putin laughs and calls Obama a prankster you know things aren’t going to plan. How long before we do something really stupid, as in Ukraine, and WW III results?
So how do bursting bubbles and power shifts relate? The shorter the fall, the easier the landing, the faster the rebound.
The coming recession will be bad for everyone but the ones getting back up the fastest will be in economic control.
The last stumble had everyone hurting. The next one will be worse. I have heard Ireland should weather the next downturn, at least on a personal level, relatively well. Things have never been that economically great in Ireland and only in the last generation has there been any significant new investment. Theory is the population can more easily handle a slide into tougher times. Sounds logical but I don’t know if an Irishman would agree. There are other places where that theory has more credibility.
England never recovered from WW I but has muddled along. The expected post WW II boom never happened. England has had to carry Ireland and Scotland to some degree. Free social services don’t come cheap. Downing Street fakes their unemployment and economic data just like we do. The National Health Service is a mess. Don’t believe what Obama says. Overworked nurses and staff and the ever-present months long waits for non-emergency procedures are much in their news of late. The UK will not handle the next big one well.
Some think that Germany, who is economically chummy with Russia and Eastern European will become the next economic superpower. Germans are resourceful. The EU thinks Germany is doing too well and wants them to redistribute their wealth. Still… there is a saying in Germany “do not get sick after June because that is when health care money runs out”. Like the Iron Lady said “The problem with socialism [and free health care] is eventually you run out of other people’s money”. That said the next generation may well have to learn German if they want to do business.
China and India are on the list also. China’s economy is powered by their printing presses and is in a manufacturing bubble. China will be worse for wear after the next major “correction”.
Japan’s bubble has been bursting for quite a while. They have climb out of their hole just to reach the ladder. Korea is strong but like Japan it is under the US thumb. They let themselves be dependent on the US for defense and who knows what else. Washington will not let either get out of hand.
My bet is SE Asia. Malaysia and Indonesia. The manufacturing base is modern and booming thanks to foreign investment. Pay is lousy but better than in recent history. The good life has not been good for that long. The people are tough and the work ethic is good. One just has to look at how Asian business people succeed here and how well their children do in school. They will be able to weather the next storm and come out fighting. If they team up with India, China, Japan or Australia a formidable alliance could result.
Islam is strong in these countries.
Too bad we didn’t spend more time working with our neighbours in Central and South America via the marketplace instead of via the CIA. We might now be in a stronger position.
Be seeing you