Update: The Brussels terrorist bombings today highlight the importance of a deep understanding of geopolitics within a wise person’s personal planning apparatus. Europe has sown a crop of bloody terror within its midst, in the name of an opportunistic, photo-op “compassion.”
All of the regions looked at in the videos below have their particular fatal flaws. If one is considering locating to or investing in certain areas, one must understand both the strengths and weaknesses of the place. At this time, for almost all important parts of the world, the weaknesses loom large.
BBC This World 4 March 2016: A look at China’s internally censored, ongoing economic slowdown, ghost cities, debt mountain.
Since 2009, when it largely stopped being the world’s factory, China became the world’s largest money printer. In 2012, when this strategy was no longer sustainable, China was left with an inventory of 9.83 billion square meters of vacant real estate and dozens of industries loaded with overcapacity.
… China is no longer in a position to be a major raw materials importer and thus stifles the world economy. Of course, one cannot say that this is China dragging the world economy down. But the dreams that China would become the world’s economic engine have been dashed.
China’s debt mountain is expanding much faster than its real economy. Much of the debt is secured by highly leveraged assets valued at massively inflated valuations. In other words, if one is capable of focusing on the underlying fundamentals he will see that China’s economic facade is mostly flash and little solid substance. The Communist Party government is under tremendous pressure from the expectations of ordinary Chinese people.
We at Al Fin have been talking about all of these things for many years.
World media focuses on the Chinese economy because Chinese spending reverberates deeply across the global economic landscape. Russia is a different story, with a relatively unimportant economy but with an outsized military aggressiveness and global nuclear threat in relationship to its economic and population sizes.
The following 10 February 2016 video looks deeply into Putin’s assertive attempts to force Russia back into the position of a great global power once again:
Poverty in Russia surging — No help expected for the sinking economy until 2018 at the earliest.
If not for Putin’s grand theatrical war adventures in Syria and much of Eastern Europe (using real human blood), Russia would not be deserving of much attention from the rest of the world, except for economic relief agencies.
Europe et al.
The video below: “George Friedman on the Global Crises” is a comprehensive look at the different global flash points of 2016, including Europe and the greater Eurasian landmass.
Friedman highlights the problems of exporting nations in recent years, including Germany. Germany’s over-dependence on export income creates a dangerous instability at the heart of Europe.
Europe’s failure to adhere into a single economic entity is laid bare, and attention is given to European debt and unemployment.
Much of the information in the video above may come as a surprise to those who have neither been reading the Al Fin blogs, nor have been paying much attention to world fundamentals in general.
The US and North America
The 21 February 2016 video below looks at the relatively privileged position of North America in the eye of the global economic storm.
North America provides much of its own producers and consumers, both. In other words, North America constitutes much of its own import and export markets in energy, food, and a number of other crucial economic sectors. To a large extent, this shields North America from much of the turmoil that is hitting Asia, Europe, Eurasia, and — to the extent that anyone notices — Africa.
Rather than to play “blame games” regarding the desperation stealing over large parts of the geo-political world, it is best to simply look at the trends in underlying fundamentals, and the most likely reasons for them. By examining multiple levels of trend causation, one might achieve a limited ability to look into the future.
Dynamic Resource Fundamentals
Dynamic resources include human levels of cognitive aptitude and useful skills, healthy institutions of education, healthcare, research & development, manufacturing – food production – financial – information infrastructures, and government and legal mechanisms that provide rule of law and protect property rights — allowing for a healthy startup and innovation economy.
Governments that allow their civil societies and private economic sectors to develop as free from government interference as possible, are likely to grow healthier economic ecosystems. Most governments are far too greedy and corrupt to allow healthy economic ecosystems and civil societies to develop and thrive.
Future governments of seasteads, outer space colonies, and new countries that develop within the husks of former world powers in Europe, Asia, Eurasia — and in parts of Africa hollowed out by future human tragedies — would do well to remember the need for a reasonable “hands off” policy with regard to their own economies and civil societies.