China, Iran, Russia, and Friends

A motley collection if ever there was, this crew of mal-archies is living on borrowed time. Invest in these countries at your own risk.

China:

China has a set of weak spots. First, they’ve got a very rapidly aging population. Like all countries with aging populations, they need to export capital and employ young people and other countries to pay for the pensions of their own people. Germany does this, too. That’s part of the motivation for China’s strategy. They will have an enormous burden supporting the aged in the future. They’re hoping to deal with that through automation, through more efficient health care.

Their biggest problem is the ambitions of their young people. The Chinese created a generation of which 10 million people each year take the gaokao (university) exam. A third of them study engineering. They expect opportunities.

If China loses its edge in technology, if they fall behind the West, if the Communist Party is seen to have failed in competing with the West, I think that will be a significant threat to its power. __ https://www.asiatimes.com/2019/10/article/you-can-never-be-chinas-friend-spengler/

China has no friends among nations, and the Chinese people have no friends among each other. In China ambition is everything — everyone wants to be emperor. No trust, no genuine cohesion when things become difficult.

In addition, China cannot survive without stealing. The country steals from other countries, and the communist party elites steal from the country. In the end, the ruling elites have everything, and the people are the last to understand that the joke has been on them.

Iran:

According to the IMF, Iran’s economy is already in “severe distress” and set to contract by 9.5 percent this year as it struggles under the weight of the sanctions…

[Recent very modest price hikes on fuel] sparked demonstrations in cities and towns across Iran, with drivers abandoning vehicles on highways and protesters blocking roads.

An estimated 87,000 people took part in the protests, according to security officials quoted by the semi-official Fars news agency.

Dozens of banks and stores were set on fire or damaged in violence surrounding the protests and about 1,000 arrests were made. At least two people, including one police officer, were killed. __ https://www.aljazeera.com/news/2019/11/iran-protests-600-words-191118060831036.html

Later, over a thousand Iranian demonstrators were massacred by the Revolutionary Guard, at the behest of Qasseb Soleimani.

Iran is a tinder-box waiting for the right spark to set it all off. The more violent and authoritarian Iran’s government tries to be, the more precarious its position with the people.

Russia:

… Russia is prone to internal collapse. The question is one of timing: whether or not the Russian Federation will collapse in the coming decade.

… Consider the Time of Troubles in the late 16th to early 17th century. During that period, internal disturbances led to the Polish occupation of the Russian heartland, including Moscow. We can also look to the end of the Romanov era in 1917 — another good example of Russian state collapse. The breakup of the Soviet Union in 1991 is of course the most recent example. In every case, a complete breakdown of social order followed the collapse.

Note that these Russian defeats were not military. Their major cause was internal economic weakness coupled with military inefficiency that had grown over decades.

… Surprisingly, Russian collapse often takes place following decades of relative peace on the country’s borders, where there were no serious military confrontations on a par with Napoleon’s or Hitler’s invasions. Rather than use these relatively peaceful periods to develop the economy and build technologies to stay abreast of the Western democracies, Russia lagged behind while resting on the laurels of its military victories.

… The old Russian habit is revealing itself once again: the regime is savoring its victories against Georgia and in Syria, its annexation of Crimea, and the war in Ukraine while disregarding the country’s real challenge — its technological, military, and economic underdevelopment. __ https://www.algemeiner.com/2019/09/12/russia-will-likely-collapse-from-the-inside/

North Korea:

North Korea, one of the world’s most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment, shortages of spare parts, and poor maintenance. Large-scale military spending and development of its ballistic missile and nuclear program severely draws off resources needed for investment and civilian consumption. Industrial and power outputs have stagnated for years at a fraction of pre-1990 levels. Frequent weather-related crop failures aggravated chronic food shortages caused by on-going systemic problems, including a lack of arable land, collective farming practices, poor soil quality, insufficient fertilization, and persistent shortages of tractors and fuel. __ World Factbook

Venezuela:

In the 1970s, it was the wealthiest country in South America; oil profits were flowing in, and Venezuela was the host, not the source, of the region’s refugees. The picture looks very different today. Between 2013 and 2019, the Venezuelan economy shrank by more than half. Roughly 90 percent of the population now lives below the poverty line. Food and basic medicines are often unavailable or too expensive for all but a small elite, and Caracas is one of the most violent cities in the world. More than four million Venezuelans have fled their homes, many ending up in neighboring countries ill prepared to host them. __ https://www.foreignaffairs.com/articles/venezuela/2019-11-12/introduction

Cuba:

Cuba was once an island paradise, but has been on life support ever since the Castros came to Havana to stay. The USSR kept the invalid alive for decades. Venezuela bared its breast to Cuba under Chavez. But now Cuba’s friends are gone or in even worse shape than Cuba herself. What’s a poor little island to do?

“In effect they have suspended what there is of a market,” a Cuban economist said, asking not to be identified due to restrictions on talking to foreign journalists.

… Cuban President Miguel Diaz-Canel announced earlier this month that the government had adopted a series of emergency measures to fight economic stagnation and dwindling foreign currency earnings that began in 2015 as the economy of key ally Venezuela imploded…

… “The more they control prices in formal markets, the more inflation and instability there will be in informal markets and the less incentive the productive sector has,” he said. ___ https://www.reuters.com/article/us-cuba-economy-idUSKCN1UP28Y

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