This page has been archived and commenting is disabled.
Which Global Hegemon Is On Shifting Sands?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Given that all the leading candidates for Global Hegemon are hastening down paths of self-destruction, perhaps there will be no global hegemon dominating the 21st century.
Which nation with aspirations of global dominance (i.e. hegemony) has these attributes?
1. The nation's recent prosperity is based on a vast expansion of credit.
2. The nation has 100+ million obese/diabetic citizens.
3. The citizens have little say over central government policies that favor cronies.
4. The nation faces demographic headwinds as the number of people in the workforce declines and the number of retirees balloons.
5. Large regions of the nation suffer from chronic water shortages.
Hmm, sounds like the U.S. is a match so far.... Let's add a few more attributes:
6. The nation's credit expansion has relied on a largely unregulated shadow banking system.
7. The nation is in the midst of an unprecedented housing bubble.
This could still be the U.S., but America's unprecedented housing bubble popped in 2006--the current bubble is a mere echo bubble. Let's add a few more attributes:
8. The nation is beset with unprecedented "external" environmental costs as a result of rapid and largely unregulated industrialization.
9. The nation suffers from large-scale desertification.
10. Over half the nation's monied Elites have either left the nation or plan to leave and transfer their financial wealth overseas.
The only nation with aspirations of global hegemony that fits all these attributes is China. The conventional China Story holds that the 21st century will be China's century, much like the 20th century was America's.
But this story overlooks the vast demographic, health, environmental and financial problems built into China's land, people, and Central-Planning systems of finance and governance.
Consider two charts drawn from John Hampson's recent overview of Problems in China:
China's shadow banking system, which provided the majority of the credit that fueled the current expansion, is imploding:
Not coincidentally, China's unprecedented housing bubble is also imploding:
China's system allows only a limited number of options for savings and investment; other than bank accounts that have lost money when real inflation is accounted for, the primary option available to households is real estate. As a consequence, an enormous percentage of the nation's household wealth has been sunk into empty apartments which act as "savings."
But a physical flat in a high-rise building is not a financial asset like a savings account: it is a physical object that degrades with time and whose value is set by supply, demand and thr availability and cost of credit.
If the building is not maintained properly, elevators break down, pipes start leaking and fixtures corrode, and the value of an unmaintained building drops to zero in terms of habitability within a decade or so.
100 million apartments become an enormous mal-investment of one-time wealth as they slowly become uninhabitable due to poor construction and/or maintenance.
China has been building infrastructure at a break-neck pace for 30 years, and this has created the mindset that almost every structure will be torn down and replaced with something grander every 20 years or so.
As a result of this mindset, very few structures are maintained. Why bother if it will be torn down and replaced a few years down the road?
But tens of millions of apartments cannot replaced every decade or two.
In effect, China has squandered its one-time wealth generated by rapid industrialization, and absorbed the still-uncounted environmental and health costs of this industrialization that must be paid in shortened lives, higher healthcare costs and environmental cleanups for decades to come.
Few promoters of the China Hegemony-in-the-21st-century Story mention the estimated 114 million people in China with diabetes--over one third the population of the U.S.-- or the roughly 500 million people in China with elevated blood-sugar levels that put them at risk of developing diabetes or related lifestyle diseases. China ‘Catastrophe’ Hits 114 Million as Diabetes Spreads.
How much of the nation's surplus wealth will be devoted to fixing the environmental and health costs that are already visible? How much of the wealth is actually phantom wealththat will vanish as the housing bubble based on an unprecedented credit bubble pops?
The China Story based on demographics, health, environmental damage and financial Central Planning is a quite different one from the China will be the global hegemon in the 21st century story. Given that all the leading candidates for Global Hegemon are hastening down paths of self-destruction, perhaps there will be no global hegemon dominating the 21st century.
»
- 8111 reads
- Printer-friendly version
- Send to friend
- advertisements -
To infinity and beyond!!!
Wi tu phat
Export more HFCS! Muahahahaha!
ALL
So says CHS, the paper bug. When did you sell your soul to the US govt, Charles?
He was born into it. Depressing really.
Guess this is why the US debt seems to not matter anymore.
Demographics is destiny, and China's look bad.
No global hegemon........sounds good to me!
The nation that fits these criteria is, of course:
East Asscrackistan.
Better brush up on your Eastern Asscrackistani, everyone. That's what your new bosses will be speaking.
Meanwhile the land of the free is in the capable hands of Janet Yellen. And former Bank of Israel Chief, Stanley Fischer.
What? Me worry?
The thinning of the herd is coming, and it won't be pretty. There are going to be a lot more empty cities beyond what China built before we know it.
What? You think this curve will be interrupted somehow?
http://en.wikipedia.org/wiki/World_population#mediaviewer/File:Population_curve.svg
;-)
(I'd bet on it also.)
BIS will be the global hegemon, with the central bank in each country, a vassal prince.
Listen. I imagine the carry costs for "MOST" biggies will be low. I doubt the melt down will resemble anything that has been "WITNESSED".
no mention of the future of cancer in China?
all that air pollution has got to do a number on Chinese lungs.
Russia? China? India? US? Mirror mirror on the wall...
Charles is just starting to Grasp what is happening:
China is Japan in a re-run of the Movie "Japan in the 1980's".....
With the Same Ending.......
China has OutPrinted the US from the early 2000's and still Going Strong...
But Notice the Chinese Stock Market has Long Since Peaked....
It has been Down and Stayed Down Years Running, with No End in Sight.....It has yet to see the Bottom as Well......
To the "Bulls", Caveat Emptor:
"Money Printing" only ensures that once the Market Peak is reached, it won't be seen again......
However:
America isn't Going Down, and Financial Reckconing won't change that - Only Guarantee It....
http://www.talentseekscapital.com/uploads/3/2/6/9/3269986/america.pdf
Markets Revolve around America; Not the other Way Around....
As the "Crony Capitalists" are soon to find out........
The US is going down too. Actually much faster than China.
Simple reason: 1 unit of energy (or debt) has a greater return in China. In China it is easier to build something that will generate a net profit. In the US it is getting harder. To make matters worse, the dollar system is also dying.
It is the US empire that will collapse in this century (and there is no other empire of the same scale).
Debt in US transferred onto public balance sheet and never liquidated; debts are being collected and enforced onto American public, thus were all loaned up.
China’s debt will be liquidated and clean, reset the system. Here’s just one of the Sharks that created the debt in USA doing biz in China.
http://www.bloomberg.com/news/2014-09-03/warburg-pincus-said-to-invest-close-to-700-million-in-huarong.html
9-2-2014
Warburg Pincus bought the largest portion of a 21 percent stake that China’s biggest bad-loan manager sold to a group of investors for 14.5 billion yuan ($2.4 billion), said one of the people, who asked not to be identified as the matter is private.
Rising loan delinquencies in China are adding to opportunities for the country’s asset management companies, set up in 1999 to buy bad debt from state lenders. Warburg Pincus, whose president is former U.S. Treasury Secretary Tim Geithner, finished raising $11.2 billion last year for its most recent private-equity fund.
Can't call it an empire because nobody accepts the reality, so instead we are an irresponsible hegemon.
"Markets Revolve around America; Not the other Way Around...."
Might want to read up on history legend. The markets and the world used to revolve around Egypt , Greece , Rome , France, Portugal, Spain, England.
Used to! But I'm sure that can't happen to the USA.
Yes, The American Dream! Because you have to be asleep to believe it. (Carlin)
Wonder why so many down votes for you Liverspots??????
Chinas a shithole, but when it crashes there should be some bargains in Oz.
One country has the labour and infrastructure to manufacture half of the world's manufactured goods.
A different country's way of life is monetary debasement, financial fraud, technology fads that are equivalent to teenage popularity contests, and global military intimidation
A reset is coming, everyone's got (enormous) problems, but surely the existing hegemon, living off of and abusing exorbitant privilege for far too long, has the farthest to fall?
Wow! +10000
There will be no global hegemon, as it will be impossible, due to several factors:
- 4th generation warfare - never before could irregulars defeat a nation state so easily
- limits of growth, especially in the field of energy will make most conqests pointless
- several powers that all aspire to at least regional dominance and they all have nuclear weapons (eg. cannot be defeated)
China is definitely fucked, and I wouldn't want to live there, but their future is probably a lot brighter than ours. Give them 50 years and they'll probably have most of the pollution problem solved. I hope.
The country with natural resources and the means to defend them is the richest. So it is the U.S. Then probably Canada and Russia. China is shit. They are akin to a prepper living in the desert completely reliant upon water imports from other areas. That model doens't work. They are poor and weak. This currency shit is all a con game to take the eye off the prize.
Bullshit. Totally ignorant post.
China is the world's NUMBER ONE coal producer. A by product of coal is THORIUM. They are actively designing thorium plants.
They also have over a billion HARD WORKING people. You work hard there or you starve and die. Compare that to the west where more and more people are TV watching, EBT parasites sucking the life blood out of those who produce.
If China can get their population under control, they'll have a shot at getting the pollution under control. You can't be over crowded and clean at the same time.
Who gives a shit about Thorium? They have poor water quality, no trees, shit soil, and not enough oil. They are totally dependend on others. They are shit.
Whenever the banking mafia take full control of a nation or civilization they destroy it because they have zero sense of long-term stewardship. In the past they just took down one country or civilization at a time and then moved on to the next tallest poppy but since we now have a global economy when the banking mafia bring down the US it is likely to bring down the entire global economy all at once.
The best placed countries will be those with a surplus of the basics of life e.g. energy and food, who are least reliant on US or US-related markets but those countries will only be best placed to survive relatively intact not become hegemon. I don't think there will be one unless the banking mafia themselves somehow manage to finesse the global collapse they created into them becoming a global hegemon which would be hell on earth as they're 100% sociopaths.
About 6 years ago I had a long cab ride in Beijing with a cabbie who spoke good English and wanted to use it. As we drove past miles of 40-story apartment buildings, I asked him how housing in China worked. He said if you stayed in your home district, the government guaranteed you a place to live, but it was usually awful, and anybody who didn't want to live in a mud hut and grow dirt left their home district to find actual work and income. There was an official process for that, but it took forever and usually went nowhere, so people would just leave. As soon as they did that, the government guarantees of housing, education, medical care etc. were off the table.
The standard unit of housing for people outside their home district is either rental, but mostly something like a condominium. You buy the apartment. He told me he had a nice new apartment, somewhere about 30 miles from the center of Beijing. His flat was about 100 square meters, or about 1076 square feet. He had his parents, wife, kid, and a sibling living there (at least 6 people). For that, he was had a mortgage for about 1,000,000 RMB, so a little over $150,000 USD. A steal in many US cities. Except I had just read an article in the China Daily that cabbies made, officially, about 2,000 RMB per month. The guy and his wife were the only ones in the household working. How the hell could that possibly work?
The cabbie smiled slightly and said, "There are many ways of earning money." And then he told me he had a 70-year mortgage, which he could pass on to his kid.
No way his apartment building will be there for 70 years. He's renting, and paying the bill with some sort of gray-market income. I paid the fare with my American Express, and gave him some folding money for the tip, no doubt helping out with that housing bill.
The 6th Century was supposed to be Byzantium's Century or perhaps Pesia's Century, as Rome fell.
Instead it was a century of struggle, with Byzantium struggling to regain Rome and North Africa while surviving pressures from Persia.
And the 7th Century went to a new comer, largely enabled by dissatisfaction with the struggles and bloodshed of the Byzantines.
History shows that expectations of hegemony never pan out.
No. The center of economy/cultural/political activity is ALWAYS moving west. It's some type of natural law. You cna easily chart it's movement across the Earth's globe as it moved across it through history. Fairly obvious, that, I figured it ALL by my little self when i was around 12. (Dont want to brag but that is how it is)
The center of power was in USA but it jumpled the ocean, went into japan and is now fimly into Chian's territory. No matter what USA does(short of a nuclear war and the USA is crazy enough to do it) CHina WILl be the next superpower. Next is RUsia. That's why USA is desparetly trying to prevent Russia, not CHina. The USA is finally showing some long term thinking.
Do not underestimate the importance of hard assets: land and natural resources, manufacturing capacity and diversity, agricultural land and food production. As far as I can tell, China is in the best position of any country to nationalize its productive assets, close its borders, seize financial assets from those who live within its borders , and insulate itself from the rest of the world. (Russia and America are second and third respectively. But a union of America and Canada would prove to be more self-reliant than either China or Russia.)
The bargaining power that China in particular would have with the developed world, which trashed its manufacturing capacity in favor of China's, would be enormous. It would be greater than Russia's bargaining power with Europe regarding natural gas. China, and to a lesser extent Russia, has the gold reserves to back its currency: enough to pay in gold for whatever it wants from Africa and Latin America.
It would be a better world, if no country could write and re-write the protocols for international relations as it pleases. Going back to a balance of powers -America, China, and Russia- would more likely lead to political stability than the Unipolar new world order, governed by non-national/non-governmental entities which are pulling the strings in Europe and America, to which we are heading now.
Yes, what a lot of people forget is much of China's economic growth has involved foreign corporations transferring their production to China. China's position would become immensely stronger if they nationalized those foreign owned assets leaving the countries those corporations are nominally from as de-industrialized shells of their former selves.
How is America failing like Rome fell? I decided to see if history repeats itself. So I took sentences from an old history text that described Romes fall. I updated the sentences from that text describing Rome, inserted America in place of Rome and replaced similar Roman items with today’s equivalent items. Here is what it produced:
Why did America (Rome) fail economically?
+ Gap between the rich patricians (politicians, banksters, etc) and the poor became wide.
+ Impoverished American (Rome) workers were tied to the EBT as slaves (land as slaves).
+ Impoverished workers could buy fewer and fewer goods with limited purchasing power as manufacturing and trade declined.
+American (Rome) Large corporations (estates) became self sufficient in other countries (provinces), that further hurting manufacturing and trade.
+America (Rome) saw increasing amounts of waste of precious resources as citizens took them for granted.
Why did America (Rome) fail militarily?
+American (Rome) military became servants of the politicians and no longer served the people.
+American (Rome) military made or unmade politicians rich.
+America (Rome) at the end relied on other troops to fight its wars.
Why did America (Rome) fail politically?
+American (Rome) democracy did not really exist in reality at the end.
+American’s (Rome) lost their voting rights to patricians (wealthy) rule.
+America’s (Rome) patriotism became loyalty to a political ideology and not ones country.
+America’s (Rome) liberal/conservative (east/west) split created problems of loyalty.
+America’s (Rome) house and senate (roman senate) became obsessed with patronizing the poor and less wealthy to gain politically (power and clout).
Why did America (Rome) fail socially?
+America (Rome) was overrun by people from all over the world looking for EBT (corn ration) handouts.
+America (Rome) declined in intellectual culture. America (Rome) instead spends it’s time watching gladiatorial contests (NFL) and chariot races (NASCAR).
+America (Rome) declined from religious division. Rome (America) was inundated with Muslim (Middle East) and the Egyptian (atheist) cults that took away from the (Judao/Christian religious foundation) traditional Roman religion.
+American politicians (Rome) increasing dictates what is (was) politically correct to keep the masses in line.
…Then replace Nero with Obama in the history text it becomes even clearer.
The social correlations are amazing, nice post. Eyes wide open
I'd say a simpler list would be the destruction of the solid middle-class that originally built Rome through:
1) mass import of cheap labor (slaves)
2) gradual debasement of the money supply (Roman silver coins were something like only 0.1% silver at the end)
leading to the excessive concentration of wealth in only a few hands.
An excessive concentration of wealth leads to a dramatic reduction in the effective demand in the economy.
Tyler you should make this a post for the weekend.
The only thing tho is I'd replace Nero with Reagan or Shrub jr, not Obama.
From the foreign wars financed by the banks of Antwerp to the institutionalization of the Inquisition, I'd argue that it might be more fruitful to look at parallels with the decline of Habsburg Spain.
Both China and the US will bring the world to its knees when the crisis hits, no doubt about it. China will recover quicker than the US, why? China produces goods and services and US produces financial products.....good luck with eating paper in the west
They are building infrastructure but its mostly crap. I've got a friend who is a consulting civil engineer who did work there for two years and he said that he wouldn't live in that housing for any reason. No soils engineering, lack of of a proper foundation, crappy rebar and hopelessy crappy concrete. those buildings will be lucky to last 20 years and the whole country is built that way.
And have you witnessed how the new buildings are being build in California now days? Using pressed plywood! that they sray with stuff to hide it. How long is plywood gonna last? 20-30 years?
Sum Ting Wong
Let the Chinese oligarchs run abroad with all their dollars. It's called "cleaning house". China will be rid of them and they will, in the end, be left with nothing.
China says good riddance to those oligarchs. They hold paper wealth while production wealth is in the country. The less oligarchs the more you create free enterprise to replace oligarch business. It is because these morally bankrupt crooks leaving that actual entrepreneurship and capitalism is flourishing in China. Contrary to chs China will be fine and will recover first before the USsa. They have the real assets (phyz, mfg, human talent), the USsa is on reverse. Plus shd not be proud of having these oligarchs as citizens they are scummy sociopaths that gamed the system. The detriment goes to the west for acquiring these garbage.