The Post Globalized World Part 1: Why The PIGS Are Out Of Luck

Tyler Durden's picture

There are three key factors to modeling trade flows - or relevance - in a post-globalization world. While competitiveness is important, countries gain from being generally 'Technology-rich', 'Labor-rich', and/or 'Resource-rich'. The following chart, from Deutsche Bank, shows where the world's countries fit into the Venn diagram of give-and-take in a post-globalization market. The red oval highlights where Italy, Greece, Portugal, and Spain (and Argentina sadly enough) do not fit into this picture. Two words - Euro-sustainability?

Analysis of Global Competitive Advantages


and where they each stack up...


How things have changed...


Deutsche Bank drills down:

1. “Technology rich” advanced economies: These countries generate exports by producing advanced goods and having companies that organize global production processes. These economies tend to benefit from their strong infrastructure, good education, high number of patents and strong companies that arrange sophisticated production processes (potential with global sourcing). Germany, Switzerland, Scandinavia and Japan are appropriate examples, in our view. As variables for “technology-richness” we consider patent grants (sum '05-'10 per '000 population), internet users per 100 (2010), UN Education Index (avg. '05-'10), quality of institutions (rule of law, property right, organized crime, corruption, etc.), quality of overall infrastructure, quality of educational system, and firm-level technology absorption (The last four variables come from the competiveness study of the World economic forum)

2. Labour rich countries: These countries generate exports because they have a high number of workers, low labour costs in a global comparison or in a regional comparison (Eastern Europe relative to Western Europe or Mexico relative to the US) and an infrastructure sufficient for global companies to set up production sites. China, Thailand, Poland and Czech Republic could fall into this category.

3. Commodity rich countries: The countries generate exports from natural resources. They have benefited from rising commodity prices over the last decade for some of commodities. Saudi Arabia, Brazil, Russia and other oil countries are classical examples. For commodity-richness we use share of commodity exports of total merchandise exports (avg. '05-'10) and commodities export value as share of GDP (avg. '05-'10). For labour-richness we look at share of population employed in mining and manufacturing (avg. '05-'10), ratio of labour force to GDP (avg. '05-'09), employment in agriculture (% of total employment, avg. '05-'10), manufacturing value added (% of GDP).

4. Countries without strong comparative advantages: Those countries that are not very strong in one of the three categories mentioned above have found it harder to increase their exports over the last decade. They may have taken part in global trade by increasing their debt levels. Greece may be one prominent example. The question is which other countries would fall into this category.

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economics9698's picture

Don't forget we, USA, can kill the most people.

withnmeans's picture

The charts do not represent the past, Italy, Greece, and Egypt use to be at the top of the food chain as well as others.

So let the cards fall where they may, some countries maybe the show stoppers of our era, however the LIGHTS can go out at any given time...

One cannot be too arrogant, it may come around to bite you in the ass!

slewie the pi-rat's picture

 <--< YES

 <--< NO

slewie opinion poll:  should US Mint-produced gold and silver coinage be restored as LEGAL TENDER in the US as per the US Constitution and not subject to the fuking "collectibles" and OTHER TAXES?

yes or no? 


RockyRacoon's picture

This is the answer I posted to your same question at another article:

"yes or no? should gold and silver US Mint-produced coinage be legal tender (b/c the CONSTITUTION sez so) or NOT?"

The coins being produced are legal tender -- if you want to give away a $50 gold "coin" that weighs in at 1 Troy ounce.  Or a 1 ounce silver $1 Eagles at face value.  Not a really smart thing to do, but your question is answered in the strict sense as a "yes" most certainly.  Even when we had a semblance of a gold standard there were face values on the coinage.  There were $20 gold pieces and silver dollars.   What irks me is that there is a sales tax on purchases/sales of the coin of the realm.   Funny how I can go to the local bank branch and change a $20 bill for 2 $10s and there is no transaction tax.   That shit just ain't right.   I may not have answered your question the way you wanted, but I'll admit to not understanding the question fully.  Be gentle as I only have a limited number of hours to spend following your train of thought(s).  No easy task my convoluted buddy.

I'll add to this most recent post that PM coinage should be treated like MONEY, and until they are we will have to put up with the stupid, unfair, illegal, inequitable transaction taxes.   "Collectibles" they ain't, even though I'm collecting as much as I can.

slewie the pi-rat's picture

thanks for chasing me down!

you are important here:

  1. read what the constitution says
  2. has it been amended (no!)
  3. therefore, let's FIX this and stop paying a "tax" to protect ourselves, our treasure and our very lives from the lawlessness all about us

i'll freely admit i write in a manner that isn't 100% someone else's dogma

much of what i write about is psychological

this is too, in a way;  you don't see it clearly b/c it is still somewhat "convoluted" to you b/c it is from slewie (perhaps,k?)

but thank you for getting in here with me, Rocky!

...even if you're not sure what i am up to at least you are seeing the basic issue;  now understand what Jefferson said about this and what the styooopid ole doc. from 1789 says, and you will begin to understand why this is a real hope for people like slewie and youie, even though it is certainly difficult to see thru the constant zH "editorial" position that it must be meaningless b/c jMauldin and dCasey or mittens or prez0 or the squid or DB or CHS or pSinger or bGross or artFerment or the trimTabber or GATA or some other un-convoluted (?) authority like tylerDurden hasn't "approved" this message

lQQk at the polls [7:1  Yes:NO on the last one, last time i looked]

i rest my case

Ahmeexnal's picture

It's official: ECB embarks in infinite bond buying.  Operation euro-twist has begun.


European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. 

Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.

When cockroaches like Johnny Depp start jumping ship you know TS has truly HTF.

falak pema's picture

jumped ship from where to where; the stern to the bow of the Titanic?

Captain Sparrow never leaves the ship mate! Anyways, he has no other ship to go to, can just retire to treasure island.

Good luck to him if he can avoid the sharks. 

Ahmeexnal's picture

Seems to me like he's gonna have to pray for those "sea turtles" to come save him again.

smiler03's picture

 "Don't forget we, USA, can kill the most people."

Including yourselves. How many warheads does it take to kill the most people? Speculation says that even Israel has 300 thermonuclear tablets to share.

kayl's picture

@ slewie

We are in a situation that privateers have taken over the ship. I prefer that coins be counted as personal property for the time being, and all debts, taxes, and presentments be discharged by the medium of paper exchange duly established within the UCC. That way I have my cake and eat it too.

It's been a wild ride, but not for the faint of heart. Title 31 USC Section 5118 strictly forbids an obligor or an obligee to demand the payment or discharge of any debt with a particular currency of the US that is gold-based or gold itself.

This statute is both a curse and a blessing. It means we cannot use gold to pay for anything. We no longer have money of exchange, and consequently we don't own anything in the US. This is now so since 1933.

But we can discharge any public debt obligation with paper with our qualified endorsements and "on demand" promissory notes as established by the UCC.

We have all become Emperor Nortons of San Francisco now, with the Fed creating our money. And it is by like example that we must use the laws of our time to discharge all presentments in a timely manner. That is the solution for me to preserve my own self-interests until this new world plays itself out. Paper, paper, paper all the way home.

In this new incarnation with an avatar body I look forward to a stable money of exchange that may be related to gold as tier one asset. Can we get there from here in a post-globalisation economy?

I succeeded on the Federal level, but the privateers have now attacked through the State. This is to be expected since money isn't real, and they are pirates after all. Fake presentments are shot at people every day who are unable to decipher their meaning.

This time I'm at the ready. I downloaded the IACA Administrators handbook to get proper information about filing a UCC 1 Initial Financing Statement for the state level, and I found their XML UCC specification for building the interface for web UCC applications. It too had helpful, most interesting information in the lists of values for each variable in the software.

Wow, there are fields in the UCC form that convey information about debtors who are public officials. Is it possible that I am witnessing two tiers of class in the managent of debt in our society? Oh, no. It couldn't be.

I shalll prevail as a Secured Party Creditor. And even if the novation still sticks, I'm prepared to claim the abrogation of my duties as a Surety, and gain as though by assignment the rights of the Secured Party Creditor. You'll have to delve into the particulars of Business law, insurance, and bonds for indemnity and surety to make heads or tails of it.

Hat tip...if you catch my drift.

lasvegaspersona's picture


love the idea but since they flushed the Constitution (look it up) long ago , I vote No for pratical reasons. The gold standard, defined as a government declaring the value of a metal and then defending it by messing with the entire economy has been tried and just is not going to be tolerated. I favor a free floating gold price untouched by governments except to defend their currencies by buying or selling physical gold into the market place. In this system the banks and politicians get their precious fiat but the market place gets to tell them pronto if they are doing it right (by making gold more or less expensive in that currency). Keynes famously said the GOLD STANDARD was barbaric. I think he felt about the metal as he did for young men, a gentle fondness. Anyway that is what seems to be coming so love it or loose.

MillionDollarBoner_'s picture

"Italy, Greece, and Egypt use to be at the top of the food chain"

Yes, Yes , Yes!

That's why they have the most corrupt politicians.

More time, more practice ;o)

schadenfreude's picture

See, how long it takes for an empire to fade away?

Acet's picture

Worse, the charts themselves are very much bullshit and maybe even outdated:

- Some of the "Technology Rich" like the UK are no such thing anymore, not since industry was moved abroad and the country became service heavy. Same thing applies to many other European countries in there, and also up to a point the US - it's both cause and consequence of their decay that technology expertise has been moving out of those countries and this is not only reflected in how much industry they have lost but also in the ever decreasing numbers of graduates in areas like Engineering (Not to worry, it's offset by an increase in Law, Public Relations and Management graduates!).

More in general, "Technology Richness" means nothing if it's not used in the service of producing something. If the "Technology Rich" label comes from being a huge consumer of Technology, it brings no wealth and no growth.

Having lived in the UK, the Netherlands and Portugal I can tell you that the UK is overwelmingly just a consumer of technology (and only in technology that is portable, like mobile phones - in anything to do with infrastructure, like Internet connections, the UK is at the level of Portugal), while the Netherlands is much more ahead in technology infrastructure and produces more technology, while Portugal is like a poor version of the UK when it comes to technology consumption and produces even less technology than the UK (I think it's because Portugal is about 20 - 30 years behind in educating its people, so there are a lot of older, technology illiterate people around).


smiler03's picture

This study of Technology is by Country/University. It suggests that you're talking crap. Never mind, you've "lived in" them!


Oh, and Nobel Scientific Prizes by country

Winston Churchill's picture

But at least  they are Free and dead.(cough).

Herd Redirection Committee's picture

Spain, Italy, Portugal, Greece... No particular advantage?

I think they should form their own union and make money from either tourism or piracy.  Thats putting their geographic advantage and cultural similarities to good use.  Tongue in cheek, of course.

Dr Benway's picture

Maybe tourism-friendly locales and beaches could be considered a resource. But it requires that visitors feel comparatively rich, i.e. a favourable exchange rate.


The article lists Australia as 'technology rich', based on the definition that such countries "generate exports by producing advanced goods". LOL. DrBenway/

machineh's picture

Argentina actually IS commodity rich, being self-sufficient in agriculture and nearly self-sufficient in energy. It also has gold mines.

Its story is one of Peronist looters running a formerly rich country into the ground -- the world's only 'formerly developed economy.'

slewie the pi-rat's picture

douche-bank should be taken with a grain of salt and a small tab of LSD here, perhaps...?

if they don't like the EZ, they are free to exit the currency, are they not?

they are so fuking out-voted it is no longer funny!

stay tooned!

when does the pastry-chefCourt do their "deciding"?


we shall see who is "out of luck" from their "ruling" and wtf germany tries next after their "law" is "interpreted" with somewhat more finality than heretofore, eh?

until then, keep the propaganda coming tyler!  at least this isn't yours, for a change...  i think...

jens must be pooping his pants to throw this shit up today

The Wizard of Oz's picture


morpheus000's picture

this is critical being able to destroy the most shit

fourchan's picture

the job of the fed is to make money for its shareholders by any means. the means it has always used is to create boom and bust cycles. these cycles capture loaned on property and enslave the borrowers to debt. to those who are not enslaved already, the fed devalues their savings of frns through inflation, which is only another word for devaluation. the "system" is working perfectly and as planned by its creators 100 years ago. the fed has stolen america and enslaved a free people.

LawsofPhysics's picture

Yes, with a minor correction, "the Fed has stolen the entire western world".  Just look who is behind the bond purchases in the majority of countries in the western world with large economies, be it by "twist" or dollar swaps, they own you.

economics9698's picture

Central banking has been around 400 years?  We use to kill central banks, now they are our boss.  I think when we go bankrupt we need to label parasites with a tattoo on their forehead "warning parasite" so the rest of society can avoid these leeches.

And if the parasites start another central bank movement just hang them about the neck until dead. 

LawsofPhysics's picture

Usury has been punishable by death at several points throughout history.  That which can not be sustained, won't be.  Hedge accordingly.

machineh's picture

With what ... a steel anti-asphyxiation collar? 

The bankster model could be blinged out with gold plating and rubies.

marketblip's picture

Interesting read.

Looks like the ECB is about to destroy the Euro though:


falak pema's picture

The Euro was a surrogate post WW2  construct of PAx Americana world order. Bad and fast track cut and paste job, after the deregulation via big bang, to match USD hegemony and currency clout.

WHen Pax Americana went global it ratcheted up the global competition along the lines portrayed here.

Its own runaway financialised momentum has knocked out its own reserve currency and world pre-eminence and obviously destabilised its own surrogates; Japan and Eurozone.

So this is the decline of First world and in the coming years, barring Armageddon, we will see a shift of power to East and South, amongst those nations who have competitive advantage.

Say bye bye to the old world order....unless PAx Americana invites everybody to the OK corral! 

Oh my darling, oh my darling Clementine...bang bang, shot you down! 

magpie's picture

That's a great theory...almost like the Bernank trying to hoist the reserve currency honors on Canada or Mexico.

falak pema's picture

Its a fact; now that its derailed you can see the WS cabal on both sides trying to fix the reality of the US financial construct that morphed bigtime in 2008 and spilled over into Eurozone; totally integrated as the global net via the banks but with Euro as surrogate.

Do you doubt that reality? Do you doubt that the Euro was created to protect EU from USD hegemony, by being its co-partner in the economic construct, on a junior monetary partner basis? 

Something that Japan never achieved in 20 years since 1971 to 1992; inspite of its dominant economy it lacked financial firepower!

Bernanke/Greenspan/Volcker didn't have to hoist it onto Eurozone. Eurozone on their own COPIED US system to try and achieve near parity financial advantage for themselves. Cut n PAste job. But the dynamics of the global system were American. It led the party as reserve, the Euro was hampered without fiscal cohesion, it lost its compass as the national wheels came off one by one...including and upto total derailment, which seems imminent. 

machineh's picture

Sixty-seven years after the war ended, Japan and Europe still host U.S. occupation troops.

With the U.S. in decline, its vassal states are getting sucked down with it.

Nobody's even talking about abolishing NATO, so the process is terminal.

savagegoose's picture

usa is commodity rich as well as tech rich.

Bartanist's picture

and the US has excess labor ... the problem being the US's excess overhead created by government regulation, high cost of government and the financial and insurance industry parasitic drains.

China on the other hand is labor rich, resource rich and technology rich ... the Douche Bank author probably read about China in a 1980 book by someone who has never visited there.

It is a simplistic and therefore poor analysis all around.

Big Corked Boots's picture

Agreed - natgas, oil, agriculture, lumber, etc. The only problem is we use too much of some of those things, others are locked up either by business logistics (gas) or environmental issues (oil).

LawsofPhysics's picture

And when a commodity rich country becomes technology rich...


...they are "liberated" by NATO.


how's that nuclear technology coming along in Iran again?

Abraxas's picture

I recently visited a country we "liberated" a few years ago. Those people living there hate our guts. Thankless bunch. No matter, we'll continue liberating the others. That's what kind of guys we are.

madcows's picture

the US is the breadbasket to the world.  I'd say that is commodity rich.  Likewise, Australia is one large mine.  Also commodity rich.


Looks like the "Commodity" rich circle should be renamed the Oil rich circle.

Bartanist's picture

Thank you Douche Bank for the junior high quality analysis.

Maybe they will repeat it for us when they have a couple of years of highschool under their belt.

kaiten's picture

No worries, when unemployment reaches 30% and wages halve, all of the PIGS will become "labor-rich" again. Labor rich and poor, that is.

insanelysane's picture

Just like the USSA, no skills or abilities, no problem.  SNAP, Welfare, SSI disability, government job, .....

Anglo Hondo's picture

you forgot - no ambition.


BORT's picture

The USA should be broken down the same way.  Then we can young people where to go to live

medanbola's picture

Tell the fellows at Deutsche that a big chunk of ARGENTINA´s GDP comes from grain exports. Global soy producer #3. Current administration can be crappy but the fact remains Argy is a commodity rich country. Fellows at Deutsche´s posh Argy office know. They own nice ranches down south.

dwdollar's picture

I think someone at Deutsche got bored and started playing with MS paint.

Fela_Kuti's picture

True, but it is the export balance that matters. China is the world's largest or second largest producer of most every agricultural product. Argentina is the world's thrid largest producer and exporter of soybeans. It is a middling producer of corn but the world's second largest exporter after the US. And so on with wheat, barley, and many other products, including #1 exporter of biodiesel. It is already the largest per capita food producer (only 40 million inhabitants) in the world and is set to increase production by 60% in 2020...

And it is also a renewable resource. As the global population grows and droughts and floods spread, food will become more than just a 'commodity'... What's more, as China and India develop, they actually turn farmland into industrial or residential land...

GoldbugVariation's picture

Nice and simple and makes sense, though it's a bit over-simplistic like anything like this.

The main thing which is missing is some kind of agricultural land and food production index - food and agricultural commodities make a big proportion of global trade flows, and likely to be important this year and in future due to the widespread drought.  Trade is not only in oil, minerals and manufactured goods and financial services, people have to eat too.

The overall conclusion looks to be that it's best to be a Norwegian.

adr's picture

The USA is rich in bullshit, that is about it. Technology rich based on garbage patents that can't hold up anywhere else in the world.

The USA could be commodity rich if it weren't for the federal government making it nearly impossible to make a profit off extracting any of them.

The reality of the post globalized world is that 99.999% of the population will be dirt poor and starving. The .001% will make sure the rest die off so the planet can be rebuilt in their image. They'll use the promise of prosperity for those who serve to protect themselves.

Globalism isn't about equality, if you haven't figured that out by now.