Guest Post: Four Signs Of Asia’s Rise Over The West

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Submitted by Simon Black from Sovereign Man

Four Obvious Signs Of Asia’s Rise Over The West

Six centuries ago, when London and Paris were irrelevant, plague-infested backwaters, and New York City wasn’t even on the map, the greatest city in the world was Nanjing– the capital of the Great Ming.

At the time, Nanjing was not only the most populous city on the planet, it was also the pinnacle of civilization. Art, science, technology, and commerce flourished in the Ming Dynasty’s liberalized economy, which constituted a full 31% of global GDP at the time.

(By comparison, the US economy is roughly 25% of global GDP today…)

Taxes were low, the currency was strong, and overseas trade thrived. For a time, Nanjing truly was the center of the world.

Over the next several hundred years, the tide shifted. The Ming Dynasty fell, and power was transferred further west to the Ottoman Empire, and eventually to Europe which had finally emerged from the Dark Ages as the most advanced civilization on Earth.

Pointless crusades and inquisitions gave way to a surge in medical, technological, and scientific breakthroughs. By the late 17th century, western civilization had asserted its primacy in the global pecking order.

This phenomenon has lasted for several hundred years now… but as history has shown repeatedly, power centers frequently shift. The world is now witnessing yet another transition of power, this time from west to east, as the US-led western hierarchy suffocates within its own debt-laden Keynesian fiat bubble.

Most westerners refuse to believe it. They can’t envision an era in which the west doesn’t lead the world… in everything. And yet, that time is already upon us. Perhaps nowhere is this more pronounced than in finance:

1) Hong Kong, from whence I write this missive, has been home to the most public offerings in the world ever since overtaking New York in 2009. In 2010, more than $57 billion was raised in Hong Kong IPOs, roughly twice as much as New York.

From Italian luxury house Prada to the luggage maker Samsonite to Swiss metals house Glencore to the US handbag maker Coach, big names have been attracted to Hong Kong. Rovio, the creator of the popular Angry Birds game, is expected to list in Hong Kong as well.

Whereas it was once the obvious choice to list in the US (or London), Hong Kong has now become the best option for most businesses seeking public capital.

2) According to the Financial Times’ Banker intelligence unit, Singapore leads every other major financial center in the world in financial sector foreign investment.

The top three, in fact, are Singapore, Dubai, and Hong Kong. Singapore receives more financial sector foreign investment than New York, London, Frankfurt, and Switzerland combined.

Money goes where it is treated best… and the market is telling us that Singapore is the right destination.

3) According to a new study from the Inter-American Dialogue, China is now dominating emerging market development finance, especially in Latin America.

In the past, countries like Brazil, Ecuador, and Venezuela went to the World Bank and IMF when they needed money. But now these vestigial organizations of the old western hierarchy are becoming a sideshow to Chinese financial muscle.

The study shows that, since 2005, Chinese banks have loaned more money and made more loan commitments to Latin America than the World Bank and International Development Bank combined… and they’re doing it at higher interest rates.

Why? Because developing nations have figured out that when you take the World Bank’s money, you have to put up with them telling you how to run your government. Chinese bank loans don’t come with political strings attached.

It’s extraordinary that this is happening in the US’s backyard.

4) The most obvious sign of Asia’s rise is the perhaps now forgone conclusion of China’s currency becoming a new global reserve option to compete with the dollar and euro.

Every month it seems, there is a new move to loosen China’s once-strict currency controls and open up– new central bank currency swaps, renminbi (RMB)-denominated futures contracts in Chinese exchanges, the introduction of RMB accounts at non-Chinese banks, non-Chinese companies issuing bonds in RMB, etc.

In fact, if you want to mark your calendar on the day the West concedes to Asia, it will be when the US government begins issuing Treasury securities denominated in renminbi.

None of this means that North America and Europe are falling off the edge of the earth. What it does mean is that the old system is being reset, and the rules being rewritten.

It’s not the first time in history that such a shift has occurred, and it won’t be the last. This change is nothing to fear… merely something to accept, embrace, and prepare for.

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Tue, 04/03/2012 - 13:43 | 2313586 Oh regional Indian
Oh regional Indian's picture

CHINDIA!!! FTW!

not....

Westernization (and thus westerners sadly) have raped the east. it's as simple as that. Africa, India, China, Japan, Thailand.... Cultural invasion and industrialization....

ori

/whither-india/

Tue, 04/03/2012 - 13:50 | 2313700 idea_hamster
idea_hamster's picture

Chinese bank loans don’t come with political strings attached.

Um...wut?  Me thinks not.

forgone conclusion of China’s currency becoming a new global reserve option

And when everyone is in the same trade in the same direction, we all know that the outcome is always exactly what everyone expects, right?  Right?!?

Tue, 04/03/2012 - 13:55 | 2313731 francis_sawyer
francis_sawyer's picture

 "Chinese bank loans don’t come with political strings attached."

Exactly...

As soon as the Chi-COMS get the MIC in full 'force projection' working order, we'll have a big mess on our hands...

Tue, 04/03/2012 - 16:02 | 2314397 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Chinese loans come with different strings. When the IMF/US come to town, you have to pledge you will buy their engineering and military hardware at extortionate prices. Then you have to agree to vote a certain way at the UN. Then you need to agree to put a US military base in your country. Then you get lectured about "freedom and democracy", and usually religion too.
When China comes to town you just need to pledge all your minerals and most of your profits. Purely business. Maybe the military bases will come later but I doubt it. Waste of money.

Tue, 04/03/2012 - 14:11 | 2313805 AnAnonymous
AnAnonymous's picture

Westernization (and thus westerners sadly) have raped the east. it's as simple as that. Africa, India, China, Japan, Thailand.... Cultural invasion and industrialization....

________________________________________________

Spread of US citizenism.

Westernization is a way to avoid shots.

The East will remain at the East, the West at the West.

Both will be ruled under US citizenism.

Tue, 04/03/2012 - 14:35 | 2313954 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous said:

Spread of US citizenism.

Westernization is a way to avoid shots.

The East will remain at the East, the West at the West.

Both will be ruled under US citizenism.

Maybe, maybe not. You yourself have said that, although the nature of US citizenism is eternal, US citizenism itself is not eternal.

Perhaps you should update your wikipedia page with that distinction:

http://zh.wikipedia.org/wiki/US_citizenism

 

Tue, 04/03/2012 - 14:57 | 2314061 AnAnonymous
AnAnonymous's picture

You yourself have said that, although the nature of US citizenism is eternal, US citizenism itself is not eternal.

________________________________________

Really? I wrote that? Fantasy.

____________________________________________

Perhaps you should update your wikipedia page with that distinction:

http://zh.wikipedia.org/wiki/US_citizenism
______________________________________________

My wikipedia page? It is just a blank template.

No discontinuity between US citizen elite and the base. Same ways.

Tue, 04/03/2012 - 19:55 | 2314404 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous said:

You yourself have said that, although the nature of US citizenism is eternal, US citizenism itself is not eternal.

________________________________________

Really? I wrote that? Fantasy.

Fantasy? Living in tralalala land?

Or is this another classic example of the primary characteristic of Chinese citizenism? The trait of denial is primary to Chinese citizenism.

Read here for memory refreshment:

http://www.zerohedge.com/news/welfare-great-delusion?page=3#comment-2268804

Chinese citizenism speaking here:

US citizen nature is eternal. This is what it is stated.

Never written that US citizenism is eternal. On the contrary, US citizenism has always been connected to the environment conditions that gave it birth.

Now will you have acknowledging this, or do you spread denial, more denial, again denial, even more denial?

Or will you now ignore what you do not want to see? Because self indiction in Chinese citizenism is a context to avoid with all costs.

Very can kicking, The slope taken by Chinese citizenism citizens is going to be fruitful.

But hey, keep denying, even though you know.

[edited to provide direct link to comment]

Tue, 04/03/2012 - 16:23 | 2314479 WTFx10
WTFx10's picture

stfu

Tue, 04/03/2012 - 16:23 | 2314476 WTFx10
WTFx10's picture

stfu

Tue, 04/03/2012 - 13:29 | 2313604 Jason T
Jason T's picture

China built 1.2 million cars in 2001, they built 13.79 million cars in 2009 making them worlds #1 car maker.  They then built 18 million cars in 2010 and another 18.7 million in 2011.  

Like lightning it will strike that the wealth has moved from the west to the East.  

 

Tue, 04/03/2012 - 13:32 | 2313617 tswenson
tswenson's picture

That's because all of the people with carts and buggies finally needed to upgrade.

Tue, 04/03/2012 - 13:33 | 2313634 Oh regional Indian
Oh regional Indian's picture

Everything that nets out in the process of Car making, sellingm buying, using etc... is a net loss, it is not an indicator of wealth but an indicator of the fact that debt-creation specialists are now firmly entrenched in China, mind-numbing amounts of cheap credit is available, debtors-to-be have had TV for 12 years, they're ready for the un-earned entitlement feeling that is sweeping the west off the cliff...now infecting the east like a plague.

ori

Tue, 04/03/2012 - 13:51 | 2313716 Jason T
Jason T's picture

I could not disagree more.  A car is a tool that increases ones productivity just like the assembly line which allowed for higher wages.   My personal productivity would plummet without a car to help me get around and be productive.  When one has to go from having a car to riding a bike, their wealth is destroyed and vasa versa.  

as the US$ continues to tank Vs the Chinese RMB, in the coming years, they'll be able to afford the gas as well as we''ll find it more and more difficult to keep up to where Americans decide simply can't afford the gas to run their car any more .. and that means welcome to poverty.

Tue, 04/03/2012 - 14:05 | 2313770 Cast Iron Skillet
Cast Iron Skillet's picture

well, I just hope the Chinese solve the energy problem for us, as we don't really seem to be doing a good job on that.

Actually, I think the country or countries that find an effective alternative for oil as fuel will "win" in the long term

Tue, 04/03/2012 - 15:06 | 2314097 GCT
GCT's picture

The administration really screwed up when they pressured the Belgians to cut Iran off at SWIFT.  I think we are cutting our noses off to spite our face.  More and more nations are pissed at the USA for doing this.  If SWIFT was suppose to be neutral and we caninfluence them to turn off a country, other systems will come into play to make SWIFT a joke in time.  We are making stupid mistakes as a country that will cause other countries to move to another system.

While writers and commentors think we are on a decline because of our debt, I feel stupid mistakes like this weakens us.  Stupid mistakes like this and our deficits and social programs are going to be the death of the US Dollar. Bullying countries around the world that have yet to do anything to us is getting old.  Paul Ryan is correct in his assumption that maybe Iran would stop making threats if we would leave them alone.

Tue, 04/03/2012 - 16:01 | 2314387 ATM
ATM's picture

Oh, they aren't mistakes. They are well calculated moves. The one world authoritarians want nothing more than to destroy anything they can label as 'capitalism' or 'libertarian'. They love to paint them as the greedy destructive forces that must be curtailed to save us from ourselves.

Swift? That's a Western product used to subdue and penalize the brown peoples!

Dollar destruction? Stealing form the brown peoples who hold trillions of dollar demominated worhtless debt!

Wars everywhere? Capitalism's natural imperialistic tendency! 

just read some of the bullshit that AnAnonymous writes (or whatever the hell he tried to name himself)

 

Tue, 04/03/2012 - 16:55 | 2314568 zerozulu
zerozulu's picture

There is a saying that American don’t think about tomorrow, British think 10 years ahead and Chinese think about the next 100 years.
You might remember the story of an old Chinese man who decided to remove a mountain from the front of his house with a shovel. A passerby laughed at him. The old man said I will start and when I die, my son and grandson  will continue.
People who are dreaming of a bubble in china, their next generation will keep dreaming too.

Tue, 04/03/2012 - 22:05 | 2315244 silverdragon
silverdragon's picture

Please point me in the direction of any credit that doesn't require a pound of flesh.

Tue, 04/03/2012 - 16:02 | 2314393 bahaar
bahaar's picture

But have they created more land to build roads for those cars ?

Tue, 04/03/2012 - 16:25 | 2314487 e-recep
e-recep's picture

those who manufacture get rich. it's as simple as that. services sector is so secondary to manufacturing. i would even say it's bullshit.

Tue, 04/03/2012 - 16:50 | 2314559 pods
pods's picture

Well that just shows how dumb the Chinese are, exponentially increasing the supply of something that depends on the supply of something that is starting to exponentially decay.

pods

Tue, 04/03/2012 - 13:30 | 2313607 tswenson
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I lol'd

Tue, 04/03/2012 - 13:31 | 2313609 MunX
MunX's picture

Does this mean I should learn Mandarin?

Tue, 04/03/2012 - 13:34 | 2313636 Troll Magnet
Troll Magnet's picture

dude,

i'm sure that was just a snarky comment but we should realize that they (and their kids) are reading our books, learning our language and culture while we're dumbing down our kids through our gubmint "education."  they understand us more and more yet we know nothing about them.  it does not bode well for us.

Tue, 04/03/2012 - 13:40 | 2313662 MunX
MunX's picture

I think it's fine.

Tue, 04/03/2012 - 14:02 | 2313751 lazarus
lazarus's picture

True that. Their gubmint education kicks our asses.

Tue, 04/03/2012 - 14:08 | 2313786 AustriAnnie
AustriAnnie's picture

Chinese students forming online study groups and auditing Western university courses (often for free).  Students who understand the material help others via online chat groups.  All this while American students taking the same classes on campus are getting deeper in debt (while puking their guts out at frat parties):

http://www.csmonitor.com/World/Asia-Pacific/2010/1231/Digital-Confucius-...

Education is only expensive for those who have no interest in self-education.

Tue, 04/03/2012 - 16:08 | 2314423 bahaar
bahaar's picture

Why are they auditing Western University courses?  I thought West has fallen.  Should they not be auditing Chinese/Korean/ Singaporean/Indian iniversity courses.

Tue, 04/03/2012 - 17:45 | 2314685 Smokey1
Smokey1's picture

I agree, Troll Magnet.

China's playing chess and we're playing checkers.

They'll hang us out to dry, so solly.

 

Tue, 04/03/2012 - 20:03 | 2315027 Incubus
Incubus's picture

Schools only teach you how to be a good worker and a good peer--how to be submissive to authority. 

I stopped giving a damn in grade school when I realized they were only training me to enter the workforce:  where the fuck did genuine education--for the sake of enlightening minds--go?  That's how we improve the world?  By conditioning people to become worker fucking bees?

It's evident that the maintainers of the system don't need to "teach" people to be independent, or to be real thinkers;  what leaders of a system need are good followers.  You think you're going to go to some generic public education system and you're going to become an independent thinker? 

Tue, 04/03/2012 - 13:36 | 2313642 williambanzai7
williambanzai7's picture

Only if you don't want to be suckered. They are all busy learning English.

There is nothing more frustrating than sitting in a negotiation and having to rely on translators.

Tue, 04/03/2012 - 13:52 | 2313719 AlaricBalth
AlaricBalth's picture

I spent a quite a bit of time in China. Had offices in Shanghai, Beijing and Guangzhou. In financial circles, English is their second language. All street signs and many restaurant menus are in Chinese and English. The one hard lesson I had to learn about Chinese business culture was that when they say yes to a deal, that is when the real negotiations start. Had to overcome a disclosure issue with the SEC upon announcing a "deal" that wasn't really done.

Tue, 04/03/2012 - 16:16 | 2314454 TheGardener
TheGardener's picture

This is just as having to learn Japanese in the late 80`s.

Foreign languages are great, be fluent in 5 and drive
a cab in NYC...

Tue, 04/03/2012 - 13:30 | 2313611 Troll Magnet
Troll Magnet's picture

oh yeah?  well...um...at least we're the land of the fre...oh, nevermind. 

Tue, 04/03/2012 - 13:32 | 2313615 BudFox2012
BudFox2012's picture

Yes but we have more debt than they do, which according to the Fed is an asset.  When you seasonally adjust this debt, we have even more wealth.  Take that you hard working, PM saving asians...

Tue, 04/03/2012 - 13:41 | 2313670 MunX
MunX's picture

Don't they own the debt O.o

Tue, 04/03/2012 - 14:25 | 2313896 BudFox2012
BudFox2012's picture

Well yes, but west will Rehypothicate it when the time is right.  Don't mess with our Keynsian masters - they are some bad-ass can kickers...

 

Tue, 04/03/2012 - 13:35 | 2313616 JustObserving
JustObserving's picture

Millions of instances of mortgage fraud occurred in the US, trillions of dollars were lost,  and no one went to jail.  The orange man is still free.

$1.2 billion in customer segregated funds just vanished from customer accounts at MF Global and no one has been charged with a crime.

The West has fallen a lot more than the East has risen.

Tue, 04/03/2012 - 22:29 | 2315286 DaveyJones
DaveyJones's picture

it's always relative

 

Tue, 04/03/2012 - 13:35 | 2313618 lolmao500
lolmao500's picture

- The west has become more corrupt than Asia.

- In Asia, they are nationalistic.

- In Asia, they are not slaves to the banksters.

In the end, economic numbers don't matter. All that matters (mostly) is the state of mind of the people and the leaders...when you got that right, you can do anything. Always true in history...that's how societies rise and fall. Societies are not made out of natural ressources and economic theories, they are made of HUMANS. Get the human part right and everything (in most cases) will go right. Become corrupt and decadent and your society will fall. Simple. It's all about the human element.

Tue, 04/03/2012 - 16:40 | 2314535 zerozulu
zerozulu's picture

During this power move phenomenon, things are moving across the borders very fast. Freedom moved out of this country and poverty is coming in to this country. You know , adjustments.

Tue, 04/03/2012 - 17:56 | 2314712 Best Satan in Town
Best Satan in Town's picture

It's all about Cisco - The Human Network

Tue, 04/03/2012 - 13:32 | 2313619 williambanzai7
williambanzai7's picture

For the Chinese it's all business, for Americans it's you have to listen to Hillary.

Tue, 04/03/2012 - 13:33 | 2313625 frostfan
frostfan's picture

If you mean more funny money is printed in Hong Kong IPOs fine, whatever.   You don't see Facebook considering doing their IPO in Hong Kong do you?  Me neither.

Oh and really, China controlled 31% of the world market six centuries ago?  I guess they should have invested more in the military then, huh?

Tue, 04/03/2012 - 13:44 | 2313654 williambanzai7
williambanzai7's picture

Facebook has no business opportunity in China, something all the other listings have.

Hong Kong also has no Sarbanes Oxley, which we have seen is a boom for accountants and does little in terms of protecting investors from Jon Corzine.

Tue, 04/03/2012 - 13:42 | 2313673 MunX
MunX's picture

lol facebook

Tue, 04/03/2012 - 13:54 | 2313726 Dr. Engali
Dr. Engali's picture

Dude Rome had a pretty impressive military and they usd it too much, eventually it drained the treasury because the military could no longer pay for itself with the booty they brought home.

Tue, 04/03/2012 - 15:31 | 2314251 Jason_1sandal
Jason_1sandal's picture

Sun Tzu did write the Art of War..... read it !

Tue, 04/03/2012 - 13:33 | 2313629 Alcoholic Nativ...
Alcoholic Native American's picture

The US needs to go back to the cold war,  I think a science and technology race with another super power is vastly more mentally healthy for a country than a dumbing down and religious race with 3rd world goat herders.

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