Niall Ferguson On China's Gold And The "Tremendous Flux In International Order"

Tyler Durden's picture

"This is a time of tremendous flux in the international order" is how Harvard's Niall Ferguson describes the world in which we live as he opines expertly on the change in China, Europe's pending 'lost decade', and the Middle East's post-Arab Spring disestablishment of the 1970s 'order' with GoldMoney's Alasdair Macleod. From China's need to begin privatizing SOEs and globalizing the RMB (with an interesting focus on the introduction of reliable property rights to 'enable' the middle class) to concerns about its large dollar holdings (and the top-down and bottom-up diversification into gold that continues); Ferguson notes that the ongoing attempt to diversify its wealth and revenues (stock and flow) is relatively limited by the ability to secure hard assets but adds that as the world's 'trade' center of gravity shifts east at a very fast pace so gold will flow from "the West to the rest" as Western power declines and the Asia bloc rises. A fascinating macro-economic and geo-political discussion that concludes with a shift through Russia's energy quagmire, Japan's debt problems, and the faulty design of the European Union.