# The (Economic) World in 2030



## konkon (4 April 2011)

By this time I would have received my second beauty make-over, and here's what I think the world's economy will, to some extent, look like:

Major countries that are not strongly allied with the US: China, Pakistan, Russia. Iran was luckily softened up with social media sites long ago and their government was overthrown. Careful attention was placed on *allies and non-allies* as this gives some sort of a blueprint as to what a major war might look like if the ^$%##$^ hits the fan!

The world has become *more homogenous*. Emerging countries have a net loss of their traditional and established way of life and a net gain of western ideals and debt. 

The US is still in control-mode and has survived several stock market crashes and recessions. The norm has become to not pay a huge part of one’s perpetual debt and this goes for many individuals, companies as well as countries. In fact, the concept of ‘debt’ has been redefined to accommodate these sorts of lending practices. People ‘now’ (in the future!) see this as a normal practice.

One world-wide correction resulted, not from debt or the hand of the Federal Reserve, but by the development and implementation of *quantum computing* and its ability to in an instant decrypt, through even brute-force, classical computing encryptions. So financial companies, governments, internet etc had to reinvest heavily and reinvent themselves, which was costly. There was another mini tech boom too as next generation computing was born. But no terminators, yet!

Europe is heavily in debt and is going nowhere really. The ECB is just a big bank. England and Germany are the two stand-outs and have a major say in the control of world markets. Germany (becomes a stronger US ally) is more committed to market control with the US and continues to control the next generation, thinking, algorithmic trading computers.

The middle east is still in turmoil. It had promising periods, but newly formed governments helped along by the west ended up doing a 180 degree turn; nothing new here.

Deliberate control and manipulation of patented next generation automotive technologies has stifled the transition from combustion engines, hydrocarbon fuels etc to next generation cleaner fuels and electric vehicles. This along with other stubborn and unyielding practices has caused shortages of commodities and traditional hydrocarbon forms of energy. 

China has the world's largest economy but does not control the electronic markets; this (most asset classes around the world) is still under the US's control and the US along with Germany and England control the majority of sophisticated, intelligent, algorithmic computer trades, that control the direction of all asset classes and markets, even if it’s just indirectly. 

Many of these exchanges are *cloud-exchanges* which makes it even harder to regulate and even locate. Collusion and market fixing is still part of the game. 

Commodities are on a rollercoaster ride; yes they will go lower than what they are today as inverse pressures force them down and speculation and the lack of supply will force them up again and again. There are way too many people on Earth and resources are at a scarce; no surprises here. Stockpiling is widespread. 

Countries like Australia may have to militarize and further protect its borders and protect non-urban regions for fear of a possible invasion by hostile and desperate nations that need its expensive and rare resources; and they probably don't want to pay for them anymore. A long shot, but still a concern even in the next 50+ years. It will become an even bigger ally of the US. 

China has a real problem; the demographics are skewered and do not favour an even +4% growth anymore (yes, no longer 10%). Their cities have long become the most expensive in the world (and so have many of their products!) and there still is a problem of the ultra-rich and the mega poor. The west still finds it hard to do business there, and there is growing unrest by a restricted and controlled people. The west may at times latently manipulate this to their advantage. 

India has a different crisis on its hands - the most overpopulated country and a real strain on their and the world’s economy; I wonder if nations will collaboratively form an agreement to kind-of ‘tax’ countries like India, via tariffs, for not making an effort to control its projected overpopulation and burdening other nations with higher costs for soft and hard commodities. Hard to believe now, but the world may be forced to make changes like these especially as it becomes more homogenized and unified policies are agreed to, adopted and enforced by the majority. 

Another competing reserve currency failed to dethrown the USD, as it was initially used, accepted but ended up being manipulated on the exchange markets by the US and their highly sophisticated trading computer networks, which still controls the markets.

Wealth will still be *made from lack of supply and high demand for space/land, housing, soft and hard commodities etc* and not necessarily form innovative developments and innovations. So don’t expect the world to look too dissimilar to what it does today; just more populated and more expensive. A real let-down if you ask me. 

The Federal Reserve (which has recently 'made' itself unbankruptable) is still in control, however, some fundamental changes were needed. It became more transparent but still managed to overstimulate the world's (not just the US’s) economy again and again. Hey, they're too big to fail. 

One of the biggest problems that countries have is an overburdening perpetuating debt crisis. Many, including the US, have no choice but to restructure their economies and even currencies. And yes, the finger was shown to countries holding and demanding payment on (unpayable) debt, more than once.

The ‘New World Order’ (which enjoys brunch with members of the Federal Reserve) is still out of site and they have not registered a business name and are not paying company taxes! But is enjoying all of the spoils it deserves! 

The media is pure infotainment and continually ignores high level white collar corruption. 

The United States has the most sophisticated military by far, and has opened up its doors to next generation defence and avionics (out of this world!) technologies, to some extent or to the extent they permit!

Two of the biggest risks are *overpopulation and perpetual debt*.

To Be Continued…


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## explod (4 April 2011)

Little reality and a lot of wishful thinking here.  And most of it is the reality of today.  In 20 years we will not recognise the current world in my view, if we can even see it.   Food for a start is hiting crisis point now and increasing unrest will combine to see millions unfortunately die. 

The US on a per capiter basis has more debt than Europe.  And as someone pointed up this morning, (a bit off topic here) Australia may be one of the worse off in actual fact.  The chart showing mining versus debt since 1988 is a stark must see in my view.

http://www.governmentmedia.com.au/index.php/blogs/25-economy-ponzi-scheme


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## konkon (4 April 2011)

explod said:


> Little reality and a lot of wishful thinking here.  And most of it is the reality of today.  In 20 years we will not recognise the current world in my view, if we can even see it.   Food for a start is hiting crisis point now and increasing unrest will combine to see millions unfortunately die.




What will it look like then?


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## moXJO (4 April 2011)

konkon said:


> What will it look like then?




There is only one certainty.........
Gillard implements a carbon tax and Australia saves the planet.

I'd say food shortages and energy shortages coupled with overpopulation. Got to be a major war in there somewhere as well.


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## Gringotts Bank (4 April 2011)

2030:  Most Aussie capital cities will resemble a mix of Beijing, Mumbai and Abu Dhabi, with traffic chaos, services overload and generally good times all round!  Hopefully I have bought my island by then!


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## explod (4 April 2011)

konkon said:


> What will it look like then?




Suggesting we may not be able to see it when it comes because we could well be all gone.  Karputt.  Just my humble opinion of course.

Do the sums, world population has grown by more than 33% since the year 2000.


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## moXJO (4 April 2011)

explod said:


> Suggesting we may not be able to see it when it comes because we could well be all gone.  Karputt.  Just my humble opinion of course.




Maybe thats why world governments don't care about racking up huge debts. Party like it's the end of the world


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## explod (4 April 2011)

moXJO said:


> Maybe thats why world governments don't care about racking up huge debts. Party like it's the end of the world




Interesting, an old friend of mine told a few of us back in 1993 just what you have stated moX..., his words, "forget all this activism stuff, just party"  He was the only one in the group that had a Phd too.

Moral, best not to know too much if you want to be(feel) fair dinkum, maybe


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## Gringotts Bank (4 April 2011)

While the trend isn't good for Australia and some of the beautiful cities of Europe, trends do change.  Melbourne itself has a ghetto type of atmosphere forming around Swanston and Elizabeth streets near Flinders St/Fed square, right near its heart.  My friend explained that everyone has a right to be here, and do whatever they want, which is true, but she is a lot more tolerant than me.  Bless her.  

I too agree with the party on sentiment.  Just have fun!  Dec 2012 is only around the corner!


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## financialdonk (4 April 2011)

Anyone interested in this topic should read George Friedman's book _The next 100 years_.


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## konkon (4 April 2011)

financialdonk said:


> Anyone interested in this topic should read George Friedman's book _The next 100 years_.




I will have to. I thought you meant Milton Friedman. Sounds good. But I find blogger opinions pretty good too.


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## Eurex22 (4 April 2011)

Food shortages will probably be the big issue of the next 20 years (and for the rest of the century). Expect rising unrest in most of the developing world stemming from the ongoing food crisis.

Internal tensions within China will also probably reach breaking point from years of unprecedented unrest as result of global food price shocks. Expect months of ongoing civil disobedience and mass casualties. But rather than one final catastrophic confrontation, diplomatic pressure, especially from US, Europe and India would prompt the ruling party to push through more meaningful gradual and progressive reforms that were initially promised, with the one party system remaining intact but huge changes within the ruling party elite nevertheless.

With china introducing these new progressive reforms, expect Australia to strengthen its relationship with China while at the same time distancing itself further from the debt-burdened US as the idea gains more popular support within Australia. Military expenditure in Australia will probably decline at this point from the levels they are today with the strengthening in ties with China.


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## konkon (4 April 2011)

Eurex22 said:


> Food shortages will probably be the big issue of the next 20 years (and for the rest of the century). Expect rising unrest in most of the developing world stemming from the ongoing food crisis.
> 
> Internal tensions within China will also probably reach breaking point from years of unprecedented unrest as result of global food price shocks. Expect months of ongoing civil disobedience and mass casualties. But rather than one final catastrophic confrontation, diplomatic pressure, especially from US, Europe and India would prompt the ruling party to push through more meaningful gradual and progressive reforms that were initially promised, with the one party system remaining intact but huge changes within the ruling party elite nevertheless.
> 
> With china introducing these new progressive reforms, expect Australia to strengthen its relationship with China while at the same time distancing itself further from the debt-burdened US as the idea gains more popular support within Australia. Military expenditure in Australia will probably decline at this point from the levels they are today with the strengthening in ties with China.




You don't think that relations with China might go the other way in the next couple of decades onwards? Would we really have stronger ties with China than a long-time ally the United States? So why would sophisticated government hackers in China allegedly break into our sacred high-end government computers in Australia? Outside of the friendly smiles for the cameras and for important trade relations, do you really think we can trust the Chinese government like we do with the US? Especially when it doesn't grant their people the freedom that our governments grant us. Look what happens to bloggers who are just expressing their opinions in China.


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## Eurex22 (4 April 2011)

konkon said:


> You don't think that relations with China might go the other way in the next couple of decades onwards? Would we really have stronger ties with China than a long-time ally the United States? So why would sophisticated government hackers in China allegedly break into our sacred high-end government computers in Australia? Outside of the friendly smiles for the cameras and for important trade relations, do you really think we can trust the Chinese government like we do with the US? Especially when it doesn't grant their people the freedom that our governments grant us. Look what happens to bloggers who are just expressing their opinions in China.




This is all assuming that China has pushed through very significant reforms and made huge changes right at the very top of the ruling party, which it will probably have no choice but to do so within the next 20 years. So the example you give about hacking or bloggers will be associated with the "old regime" or "the old china", as this thoretical "new china" would apparently grant its citizens basic human rights. This isn't guaranteed to happen but it's possible.

Relations can change when new governments and reforms are introduced. It wouldn't be any different to US-Japan or US-German relations after WW2. Trust can be built over time when countries become more democratic and introduce reforms.


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## Smurf1976 (4 April 2011)

Rising population, increasing per capita consumption, declining discoveries, increasing reluctance to use some available technologies...

Either we come up with something truly radical and adopt it far more rapidly than any previous similar situation, or there's got to be a major energy crisis in there somewhere (and quite likely a war as a result).

Note in this context that food and petroleum are basically interchangeable these days but only in one direction - you can have a food shortage without an oil shortage but you can't have an oil shortage without also creating a food shortage (since we'll simply burn the food as ethanol).

And of course the other certainty is there will be some major event that none of us have forseeen.


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## konkon (4 April 2011)

Eurex22 said:


> This is all assuming that China has pushed through very significant reforms and made huge changes right at the very top of the ruling party, which it will probably have no choice but to do so within the next 20 years. So the example you give about hacking or bloggers will be associated with the "old regime" or "the old china", as this thoretical "new china" would apparently grant its citizens basic human rights. This isn't guaranteed to happen but it's possible.
> 
> Relations can change when new governments and reforms are introduced. It wouldn't be any different to US-Japan or US-German relations after WW2. Trust can be built over time when countries become more democratic and introduce reforms.




Let's hope and it will be a much better world. I find the Chinese here in Australia (and other parts of the world) some of the most friendlies people with a lot going for them. My criticism of course is of their system in China, and I just don't see how a country of that size and influence can do a 180 degree turn, even over time, and adopt a western style of doing things in general (democracy etc etc). The politicians might be saying this and meaning this too (in front of cameras), but you have a hard-core, intelligent, influential, really powerful military that probably won't adopt and adjust; not even to a few degrees. *I think that there already exists hidden and open tension between the ruling party and the military and one that is perhaps non compromising. * 

Once you've changed the essence of your character, you've changed a lot. Will China take this risk? I don't think it will as there is too much opposition to such a move.


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## konkon (4 April 2011)

Smurf1976 said:


> Rising population, increasing per capita consumption, declining discoveries, increasing reluctance to use some available technologies...
> 
> Either we come up with something truly radical and adopt it far more rapidly than any previous similar situation, or there's got to be a major energy crisis in there somewhere (and quite likely a war as a result).
> 
> ...




Hey, this is a very good post. I think you have shown some real unyielding dynamics that might have some very serious consequences. Also, and oil shortage during the last world war meant a food shortage too, even though they weren't using such things like ethanol then. 

That's why I mentioned patents earlier (that get bought-up by large competitors like oil companies). This has always been one thing that stops innovations and progress, along with laziness, ignorance and too much time spent on mobile phone apps. Just think of all those engineer university students preoccupying themselves with apps and just hoping to get a job for one of those big oil companies. But then again, if the unique parts and components are being restricted for use for ground-breaking innovations, then why not just play with your apps, watch idiotic reality TV shows and hope to make a six figure salary for one of the oil companies.


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## gordon2007 (4 April 2011)

Smurf1976 said:


> And of course the other certainty is there will be some major event that none of us have forseeen.




Alian life presenting themselves to us?


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## konkon (4 April 2011)

gordon2007 said:


> Alian life presenting themselves to us?




May of already happened. I know you're joking but just think of how long we have been an intelligent being; debatable, some might say thousands of years (correct) and some might say a few hundred. Either way, I don't think we are in a position to dismiss the possibility or likelihood of there being capable and way beyond human-intelligence 'life' out there. The manipulation of gravity and space is one thing that is needed to master unbelievable 'speeds' in a vacuumed space (unlike anything we can conceivably do today). We are very human-centric, but don't underestimate the potential and ability out there. Just imagine how intelligent humans will be in let's say 10,000 years. Don't you think our then physics text books will look different to today's?


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## tothemax6 (4 April 2011)

Konkon, it is not reasonable to make economic forecasts 20 years into the future.

However, following general trends, one can be assured that things are going to be worse than their are now, for the West at least. That is absolutely guaranteed. By 2030, Europe will most likely be a conflict-ridden mess similar to the middle-east. North America will be similar. As for Australia, the nation-less nation, becoming a Chinese protectorate would not be surprising. 

Leave to future till the future, just make sure you are moving your own personal self in the right direction. 'Tis all you can do.


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## konkon (5 April 2011)

tothemax6 said:


> Konkon, it is not reasonable to make economic forecasts 20 years into the future.
> 
> However, following general trends, one can be assured that things are going to be worse than their are now, for the West at least. That is absolutely guaranteed. By 2030, Europe will most likely be a conflict-ridden mess similar to the middle-east. North America will be similar. As for Australia, the nation-less nation, becoming a Chinese protectorate would not be surprising.
> 
> Leave to future till the future, just make sure you are moving your own personal self in the right direction. 'Tis all you can do.




Worse with more ongoing but socially, economically and governmentally acceptable debt. The bar will be raised some more and no longer being able to pay debts with revenue of some kind (but more debt) will be the norm; it's already happening. 

I think it's ok to speculate about the next couple of decades. I think we need to, to keep up with others that are already doing this. They may not share their views with the rest of us. Very few people saw the Nazis as a real threat in Europe and around the world in 1933, however, in England, Churchill did and warned the British etc about likely and almost inevitable events, but very few listened at the time and took him seriously. Not saying we are faced with these sorts of problems, but it doesn't hurt to share thoughts about what our opinions are on future events.


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## konkon (3 July 2011)

I recently picked up Friendman's The Next 100 Years. I disagree with many of his key points. I am perplexed to read that Friedman believes (in no particular order): 

1. that Poland will become a superpower, the main influence in Europe, and a real threat to Russia. pg 148. 
2. Germany will lose its economic superiority and by 2040, Germany and France will lose their major power and influence in Europe. pg 151 Poland will be more of a superpower than Germany. pg 7
3. that Japan will reemerge as an aggressive nation like it did in WW11 and it will go to war with the US 
4. the new great powers by 2050 will be mainly the US, Japan, Turkey and Poland. 
5. that over the next decade onwards, the United States will have a huge labor shortage. pg 121 & 132
6. there will be a confrontation with Russia and the United States by 2020. pg 101
7. by 2040 US/China relations will be closer than ever, and the Japanese will find this a direct threat. pg 155
8. a global war will break-out between the US, Turkey, Poland and Japan. 
9. by 2020 China will begin to fragment and it won't be a dominant nation in the geopolitical and economic world. 
10. that the US war on Terror is a short lived exercise. pg 86 & 4
11. the "American Age began in December 1991, when the Soviet Union collapsed.." pg. 31. 
12. that the "act of governance is simply executing the necessary and logical next step". pg 11
13. the Mexicans and the Turks will be two of the major economic powers in the world. pg 9

I don't believe any of the points (1 to 13) above will occur. There are other points I disagree with and might mention them later on. 

I just don't see how Poland will become a major superpower, replacing the likes of Germany. I'm still baffled! Germany will continue to be a dominant force in continental Europe and around the world. Germany's influence will continue to grow economically and politically, and I believe Germany's alliance with the US will grow stronger. Sure the US and Germany will be competitors but they have strategic benefits. 

Japan will not emerge as an aggressive nation at all. I think the Japanese are and will continue to be content about themselves and their economy. They have gone through some pretty bad economic times over the last twenty plus years and have handled themselves well considering. Their debt to GDP is one of the highest in the world, at over 200%. I think that the Japanese are a very sophisticated lot in more ways than one and their aggressive days are long-gone. 

The new great powers in 2050 will include the US (of course) but NOT these three countries: Poland, Japan and Turkey. For me, the US and China will be the two superpowers by far. China mainly by wealth, as it will be the wealthiest nation by far. The US because it controls the seas, skies, markets and geo-political world (amongst other reasons). Friedman places too much emphasis on the US controlling the seas but I believe he forgets to note that the US controlling the skies is the biggest advantage the US has over all other nations. The same goes for controlling asset classes and markets; Friedman doesn't really mention this as playing a key role in the US's dominance in the world. 

Turkey will have a major influence in its region, but not as much as Friedman believes. Turkey will not be an aggressive nation in the region to the extent Friedman suggests. But it will be a major headache for countries like Greece. Iran will be a major problem for the west. Friedman downplays the significance of US and radical Islamic tensions and that "the war between the United States and the radical Islamists will be little remembered". He's got this wrong and this will pose the biggest threat to order and stability in the world. Friedman talks about fault lines occurring between nations like the US and Mexico (_really?!_) but the real fault lines will be religious ones. I think Iran will be a real problem here and not necessarily Turkey. I think we saw a hint of what Iran's intentions might be when it sent its war ships in the region during the height of the Egyptian crisis, to drum-up support perhaps. There is clearly something brewing in that region. The Judeo-Christian and extreme Muslim (_how far into the bell curve are we talking about?_) tensions will escalate at times over the next few decades. You are dealing with two very unyielding at the core groups. I think that the actions or lack of them in Pakistan just recently suggests a tolerance, at some level, for extremism that should concern many in the east and west. 

Friedman's approach to tensions is more 20th century and linear, than 21st century dynamism. He makes his revelations with a 20th century cap. "Executing the necessary and logical next step" (pg. 11) is far too linear a method when dealing with extremely complex issues and predictions. 

Labor shortages will not be an issue in many parts of the world. Overpopulation and high unemployment will be an issue. 

A global war WILL NOT break-out between any of the following nations: US, Japan, Poland, Turkey. The US, Japan and Poland (amongst many others) will be allies. Turkey will probably be a country that will help to negotiate with other Muslim nations, like Iran, if tensions become high. There may be some tension between Turkey and Iran but not like Friedman suggests. 

The American Age began way before December 1991. It does depend on what this quantifies over, but it may even have started as early as when the Declaration of Independence was written. The US was controlling the world as early as 1919 and maybe even a few years earlier than that.

If any nation wants to @#$!%$ with the US and the US really wants to flex its muscle, the US can ultimately take-out any threat it sees systematically and thoroughly. This would nullify any real attempt by some rogue nation to become unreasonably aggressive in its region or beyond. The net effect of allying oneself with the US would be a better future in the long run. I just wish countries like Greece would do this. But they see things differently, I guess.


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## konkon (4 July 2011)

A friend of mine thinks there's no point to thinking about these sorts of things. I'm surprised more and more people don't have their say on such matters. Even if you don't get it right, there's probably a lot that you can get out of these sorts of discussions. I find that you can refine your own level of thinking by thinking of these issues (and more). 

I've often wondered how advanced an out-of-this-world being would be. Just think of the difference between a person and their dog, for example. Dogs, I'm sure can make simple predictions like looking forward to seeing his owner again. Naturally its level of thinking, or whatever you want to call it, would be on a different and basic level. The dog would have no conception of time but it must be able to differentiate between the now and the not now (or future and even the past). 

It is possible that a different form of life out there would have greater prediction abilities and far more advanced reasoning powers than us. 

I'm a believer that thoughts themselves and even will-power can have some influence in certain future states of affairs or events. So events themselves just don't occur because of physical interactions. Most of the time they do but there's room for certain non physical influence. 

Time as a conventional instrument is really useful but thinking about it, even subconsciously, can also hinder or restrict ideas about the future, I feel. 

While the 'path' from past to present to future may appear to be linear, it isn't. The term 'path' implies a linear direction itself. Our language and our thought processes are restrictive to say the least. The 'edge of the universe' type of talk involves contradictions, based on our classical level of thinking. But we are lucky enough to be able to 'reason' with a lot more sophistication than any animal (of course) or machine. That we are aware of, at least.


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## Tysonboss1 (4 July 2011)

"Those that look into the crystal ball are likely to see an idiot looking back"

These predictions of the future are likely to be as accurate as asking a 1980 high school student what the world would look like in 2000.


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## Julia (4 July 2011)

Konkon, some interesting thoughts.  Hope others are inclined to add to these.
Thank you.


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## financialdonk (5 July 2011)

konkon said:


> I recently picked up Friendman's The Next 100 Years. I disagree with many of his key points. I am perplexed to read that Friedman believes (in no particular order):
> 
> Konkon, first off am impressed that you chased up and read this book upon my recommendation!  Obviously at the present time there can be no way of knowing precisely the way events are going to unfold in the 21st century.  However I found the book (and the approach taken by Friedman) to be quite plausible in attempting to put large scale shifts into perspective.
> 
> ...




That's my . Interested in your response Konkon.


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## konkon (6 July 2011)

financialdonk said:


> That's my . Interested in your response Konkon.




I am replying to some points now during my (extended!) lunch break and I will reply to others later on. Your comments financialdonk are excellent and it was really worthwhile reading them. The book was purchased last month while awaiting a connecting flight out of Bangkok. Let's hope that the Thais are as wonderful as they've always been in 20 to 100 years from now! I'm sure they will be. 

You make some very good points about Poland, financialdonk. It probably will strengthen its borders for fear of conflict etc with Russia and perhaps Turkey. But I still don't see Poland becoming a superpower like Friedman thinks. I also can't see Germany's influence and power diminishing. For me, Germany will continue to be the most powerful and influential country in Europe (along with Britain, of course), even if its future demographics suggest an inevitable slowdown, technically. The Germans are too much of a sophisticated lot overall and their influence, expertise etc today in many ways is paving the way for an economically and technologically sophisticated European region for the latter part of the 21st century. Germany's exposure to EU perpetual debt is a problem though, but having exposure to huge layers of debt is normal for nearly all nations on Earth these days. If the German's and Poles are threatened by Russia, Turkey or any other nation they may have little choice but to unite. It would be pretty hard to 'defeat' a unified Europe; after all, this is one of the main benefits of the European Union and the main reason countries like Greece would want to stay in the EU. United they will stand. 

You need more than one 'aggressive' (wanting to invade etc) nation these days and in the future to really cause long term problems for a host of others. This was one of my criticisms of Friedman when I suggested he saw things with a 19th to 20th century linear perspective. A threatening nuclear country is a different story, but thank God we have the US and a coalition of other nations like England, France, etc etc to oversea, and if need be, protect or retaliate if ever the need arises.

_"However, if you can look beyond the name of the state what he is saying is that it is the US who picks and chooses who to support and who to withdraw support from. You can understand that a strategic partner, strongly supported financially and militarily by the US over a number of years can begin to impose itself on the global stage"._ from financialdonk       This is an excellent point financialdonk.

Japan, I'm sure is being looked at closely and the treaties it signed just after WW11 will still apply. Any attempt to break those treaties, even gradually, would send alarm bells ringing throughout the world. However, as a key strategic economic powerhouse for the west, Japan and Korea even will be supported by key nations in the west, as there would be no point in letting Japan suffer any long-term economic hardships. I'm positive Japan would be leading the way in developing and marketing non hydrocarbon type fuels for the next century onwards. I think China will be a key player in this development too. Energy is all around us and tapping into these resources, like gaining it from ocean turbines and powerful ocean currents or from utilizing solar power with next generation solar cells, might not be as difficult as it seems. So does a country like Japan go the way it did before and during WW11 by trying to overpower countries and take what it lacks, or does it see better opportunities out there like, for example, developing wind and ocean powered turbines etc to power generators and grids? I think the latter even if is a different type of method/fuel etc. I'm sure there is more than one way to generate large and sustainable volumes of electricity. The world is full of energy that can be used to create electricity. 

I grant you that countries like Turkey may surprise many and may become an aggressive state if it needed to. Out of all of the ones mentioned by Friedman, Turkey could for some time be a real threat to neighbouring countries. But a unified Europe will mean that Turkey doesn't head west all that much. Not sure about some of the Greek islands though. But will the EU survive over the next few decades? It's biggest problem will be the volumes of debt it won't be able to honor. But then again, this is a world wide phenomenon. A restructuring of debt or to be more to the point, of creditor and debtor relations, equations and dynamics in the world could become a catalyst for major conflicts in the next decade onwards. Hopefully not, but it looks like it may head that way to some extent. Hopefully those in their think tanks are trying to work out ways to avoid this. It comes down to what action would a creditor nation take if it can't be paid at all or within a given time-frame. Many might not do much at all, but it might come down to two or three powerful-enough countries wanting some form of compensation and their debtors pretty much showing them the proverbial finger. The economic consequences or sanctions for a debtor nation might also be a real problem in the not so distant future. Not being actively involved in the world economy like it perhaps was would lead to all sorts of problems and perhaps conflicts.

to be continued...


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## konkon (6 July 2011)

financialdonk said:


> That's my . Interested in your response Konkon.




Before I forget, but it may not directly relate to the Friedman comments and your excellent ones financialdonk, speculation on the upside on all sorts of commodities (soft and hard) is one of the biggest problems facing most people on this planet and it will be one of the biggest in the future too. I'm sure I'll get all kinds of criticism from those that like the commodity play, but there are very few people that benefit from overpriced commodities in the long run. One of the reasons why the US economy won't get better the last half of this year and even next year (even if this Friday's [8 July] employment numbers come in good!) is because of high commodity and energy prices across the board. This stifles growth prospects. 

Now many might say 'but there is real demand in the world', which would explain high commodity prices. Not true! This is pure spin. The world, economically, is in worse shape than 4 years ago. The Baltic Dry Index based on actual (non speculative) shipping receipts of moved commodities from port to port around the world is at a real low point http://www.bloomberg.com/apps/quote?ticker=BDIY:IND
Click the 5 year chart too for a good visual on the problem. 

The real problem (and it's a future one) is that the large and diverse numbers speculating on all types of commodities are so powerful and influential that, the way things stand today, commodity prices will continue to appreciate over the long term, based on the sheer numbers and the level of sophistication involved and the sheer lack of opposition to these moves. Add to this the algorithmic trading computers, government and private industry (banks) cornering of commodity markets, mass purchasing and price moving abilities, and you have yourself a real problem. Physical stockpiling to control supply and demand dynamics by countries is a problem too. 

Sure corrections do occur but unless some adequate counter-measures are enacted commodities will keep decoupling and continue to appreciate, even if the world falls in to some type of depression. The traditional fundamental demand dynamics will not matter and prices might continue to rise over the long run. The market (speculators with so much money!) itself will control the price of soft and hard commodities and not fundamental demand dynamics. The Baltic Index itself suggests that there has to be supply available, even if it is stockpiled. Sure many commodities are inversely related to the US dollar but a future scenario like this might mean that the USD becomes decoupled to a larger extent too. We may not even notice these changes either.

One outcome for your average consumer around the world is the $50, for example, that he or she was going to spend on some item to spur on the economy, will be spent on higher energy and commodity prices indirectly. The is not a zero-sum game for the middle class either as nearly all in this class system will get very little in return.


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## financialdonk (7 July 2011)

konkon said:


> I am replying to some points now during my (extended!) lunch break and I will reply to others later on. Your comments financialdonk are excellent and it was really worthwhile reading them. The book was purchased last month while awaiting a connecting flight out of Bangkok. Let's hope that the Thais are as wonderful as they've always been in 20 to 100 years from now! I'm sure they will be.
> 
> Can't think of any easier way to set out a reply so will stick to interrupting in red!  Thanks for the kind words re my response.  Thrilled to be able to bounce some ideas around with you.
> 
> ...




Will reply to your second post soon.


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## financialdonk (7 July 2011)

This report brings up interesting challenges for the medium term future as demand begins to overrun supply globally for the first time in quite a while.

I believe it is in some way what you were referring to in your second post Konkon. I just managed to stumble upon it this afternoon noon!

http://www.scribd.com/doc/59489177/When-Demand-Outstrips-Supply-Copy


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## konkon (8 July 2011)

Another worthwhile reply financialdonk. I want to read the Societe Generale article and, hopefully, I will reply to most of your comments later this evening. There are a couple of things I want to expand on from my previous two posts, that have been bugging me for some time. 

One issue in the markets that I feel needs to be addressed (and it may not be anything at all, just something that's bugging me) is if we're all getting use to high commodity/energy prices now, even with a global slowdown, then we better get use to the idea of much higher prices when things are picking up in the world economy even if this pickup is slow and distorted by only really factoring-in things like better employment numbers. So those estimates of $200 a barrel of Brent Oil, for example, might play-out. My point earlier was that the basis of this was driven by speculation, price-cornering, stockpiling and monopolistic algorithmic trading computers that even today seem to be doing the majority of high end trades.

Any guy on Wall Street would then be able to 'justify' why all soft and hard commodities would have to keep going up in price on wholesale markets and of course the retail side too. One comment might be: "Hey, you had oil at $115 a barrel during the slowdown and now (maybe in 2013+ or even earlier) you have better employment figures, 'growth' (their idea might differ to mine on overall net growth, all things considered; USD, debt to equity etc) and therefore you must have oil at $160+. I don't think this is a justification, but it seems a likely outcome for world markets and consumers around the world; pricing-out scenarios seem likely and this has already occurred around the world. This too may be a catalyst for future (economic and not necessarily physical) conflicts.

Demand destruction may not mean very much in the future either, not like it fundamentally did in history. So the idea that prices will themselves correct to more 'normal' or lower levels, will not be the case. Hey, watch out for all the new norm talk! Demand destruction would not occur because of some of the reasons previously mentioned like "..._the sheer numbers and the level of sophistication involved [in trading on the upside] and the sheer lack of opposition to these moves. Add to this the algorithmic trading computers, government and private industry (banks) cornering of commodity markets, mass purchasing and price moving abilities.....physical stockpiling to control supply and demand dynamics by countries.._." my quote in an earlier post. 

Now, birds of a feather tend to flock together, so in the long run expect all types of commodities to move on the upside even if there is an abundance of a set at any given time. 

Under this model, if it pans-out this way, your elite and 'the' owners of a big chunk of the world's wealth will get wealthier and more powerful. I think that the middle-classes around the world (wherever they are nowdays) will have an uphill battle. I think that a majority of them will struggle to add to their net wealth or whatever is left of it. Your property and land holders overall will do better especially those that have few debts. A tricky conclusion or opinion here, but I think the US will do much better overall than nearly all other countries. Large US multinationals and banks (including the Federal Reserve) will do the best as their net positions would be at a real peak. However the biggest problem for the US will be the struggling middle classes (and lower ones too). This (the middle class) for the US is the heart of taxation with representation and the main source for *all* forms of public sector income.

Skip the next two paragraphs if you don't want to read about my conspiracy theory, but the last two paragraphs are worth a read I think:

Now if I put on my conspiracy theory hat and look at who might be planning to benefit the most from the GFC (I'm sure that some elite 'organizations' knew of a likely GFC! even in 2007) I would point the finger at some nameless and anonymous organization that has some level of _ control_ over certain large banks (not talking about banks/employees themselves!). There does appear, to me, to be a great deal of influence of the US economy and markets by very powerful but latent elite operating from outside (and even inside) US borders. Now, one of their intentions may have been to transfer wealth from the middle classes (and this includes creating future debt obligations for the middle classes) to an elite. *This transfer of middle class (overall) net wealth has occurred and one of the reasons why simple factors like healthier jobs numbers every month only provides a patch on an overall greater problem.* I think that some of this transfer of wealth was intentional. But a byproduct of all this activity means that all of your protective services institutions (the whole lot and in no particular order: military, NSA, FBI, CIA etc etc) may not get all the necessary funding it deserves and needs from the taxation with representation model of the middle classes funding all of these fundamentally important institutions that in turn represents and protects those same middle classes or all Americans. _This taxation with representation model was one of the key principles that the founding fathers of the United States had in mind and it should always stand. And in no way should this system be adversely manipulated or intentionally jeopardized._

Now a big part of this transfer of wealth might just be 'Wall Street'/small and large bank recklessness, unrealistic contractual modeling and greed combined with reckless issuance of small to large unpayable debts. This was the driving force, but I still feel like this, to some extent, was engineered by a very powerful elite that stood to gain in more ways than one.

I keep reading and hearing about a need to form one currency perhaps based on a basket of currencies (not the USD) and a need to slowly develop a centralized world government. *Both of these mean a transfer of wealth and power from the United States.* My view is neither will have legs especially the latter (developing a centralized world government). A basket of currencies as the world's reserve currency may take off for a while, but will not work in the long run. Both of these factors pose a real threat for all forms of US government institutions (including the protective services mentioned earlier; the whole lot one again). Now if you connect the dots of the previous (conspiracy!) points raised before with the desire to create these two new world models, then you have a possible scenario of some, perhaps deliberate, attempt over a period of time being made to destabilize and even weaken US government institutions (I think this has occurred because the middle classes have been screwed and burdened with future perpetual and unpayable debt). Those same key and fundamentally important US gov institutions are a barrier to some attempt to set-up 1. an alternative reserve currency and more importantly 2. another form of world governing body, as or even more powerful than the current US one. Based on this belief and some might see it as a potential threat to the longevity and stability of the US as a whole *there should never be an attempt to withdraw or limit funds from these all-important US agencies*.

Another important point I think is the Obama administration looking for ways to bypass congress to lift the debt ceiling. I think that it should (even though the Republicans and Tea Party have several plausible points) especially when the US needs to continue to pay all of its protective services agencies (yes, the whole lot!). A very controversial point here, but I think the Obama administration should bypass congress on a whole set of fundamentally important issues and (even though I know very little about the US constitution, but have a great deal of admiration for it) it should base these moves on crucial and fundamental issues protecting the longevity, stability and interests of the US, not to mention congresses' inability to deliver, on time, key unified fundamental changes at a key point in time.


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## tothemax6 (8 July 2011)

konkon said:


> 1. an alternative reserve currency and more importantly



1) Back to the previous one would be great.


konkon said:


> I keep reading and hearing about a need to form one currency perhaps based on a basket of currencies (not the USD) and a need to slowly develop a centralized world government.



There would be nothing more evil than a one-world government. It would be like the imperial government of 'star wars', or the three governments of 1984. The further government officials are from their constituents, the more evil, corrupt, and outright damaging the government becomes. The EU is a good example of this. The less able voters are to control their situation, the more they live under a dictatorship with a glazing of democracy. The _less_ centralized government is, the better it is for the common man. Only for the politician-thug, hungry for power and control over other peoples lives, is centralized government an attractive idea.


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## konkon (10 July 2011)

tothemax6 said:


> ...There would be nothing more evil than a one-world government. It would be like the imperial government of 'star wars', or the three governments of 1984. The further government officials are from their constituents, the more evil, corrupt, and outright damaging the government becomes. The EU is a good example of this. The less able voters are to control their situation, the more they live under a dictatorship with a glazing of democracy...




*Well put tothemax6!* And a one-world government would not last either if some nasty dictatorship etc, that may have been a traditional enemy to the US, Australia etc fills that inevitable void of world domination! 

I just wanted to clarify some potential ambiguity with the next quote, from an earlier post. By 'it' I meant (and you will see it in brackets):

"Based on this belief and some might see _it_ [*the perhaps deliberate attempt to transfer wealth from the middle classes and away from US government services of all kinds*] as a potential threat to the longevity and stability of the US as a whole there should never be an attempt to withdraw or limit funds from these all-important US agencies."


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## konkon (10 July 2011)

financialdonk said:


> Will reply to your second post soon.




We might go to the football soon, so I will contribute as much as I can now, and continue later this evening.  

_"If the Eurozone manages to stabilise economically then the goalposts shift and much of what Friedman was referring to will alter....Perhaps they (Britain especially) will grow wary of the EU and focus on strong alliances with the US in order to counter balance increasing German power. Another point worth mentioning is the demographics of Western Europe. As the population becomes older, they become less productive, hence opportunities arise for the Turkey's and Poland's." by financialdonk _

No matter what happens, the Germans will be there and will be a powerhouse. Germany during and after both world wars was crippled, devastated, bankrupt, to say the least. It came back stronger than ever. Germany has better years ahead of it, no matter what happens to the Euro-zone and unity within Europe. I don't think Turkey will be 'allowed' and I don't think Turkey would want to progress west and into Europe, like it did in previous centuries. Now if Turkey, like many other nations in the future, need to secure more resources, then Turkey best head north, north east, east and perhaps south east. I'm not saying it should and I don't think it would be 'allowed' either. Why go to Europe?

I think that the US, Britain, France, Italy, Germany (and even the Poles) and many more countries from all over the world will form an even stronger alliance as they will see extremist threats and their (extremist) and their supporters' influence over politics, geopolitics and economies their (US backed alliances) highest priority. Those issues will be a lot more macro in size, and it may become even more clear that they (extremists) are being backed by influential and powerful-enough nations, that really don't like the western model and all that comes with it; various religions included. 

I think that political commentators like Glen Beck are right when they comment about state-sponsored extremism becoming an even bigger problem in the future. I think this has to be a focal point and not necessarily old-school type tensions and conflicts between countries like England and Germany; this is one of these linear criticisms made by me - that (and I don't believe this) traditional old scores might resurface because it followed that path during the two world wars. There are definitely different macro dynamics at play here and in the future.  

Another 'linear criticism' by me is that Friedman tends to see future conflicts like they were in the previous century, as one aggressive nation physically taking on other (more than one) nations. I'm not saying this is the basis of his arguments, but he does make these suggestions. Future conflicts, I think, will be more sophisticated, macro (involving many countries on both sides) and diluted in nature and the basis of many will be religious as well as resources based ones. Not just resources based conflicts and certainly not between countries that pretty much have very similar religions. 

"_I'm struggling to follow your thought process on critiquing Friedman for his linear approach. My response (to what I think you are getting at) would be to say that war is always linear. One (or more) nation(s) has an issue with another(or more) nation(s) and when it can't be solved diplomatically the disputing nations draw up sides and attempt to gain as much support as necessary in order to obtain victory_." by financialdonk

*I think that very few things in the world and universe are linear.* They appear to be linear, but are not. One reason is because you can always look at reasons for things in so many different ways. For example, your perception of _event A_ might differ from my perception of the same event (ask people what they think 'caused' WW2, for example). The quantum mechanical 'assessment' of _event A_ would also be different. Classical physics might explain it (_event A_) differently. A legal, geopolitical or economic interpretation of _event A_ would or might differ too. The human-centric (restrictive) semantical world of explaining things, even _event A_, might differ from some higher-order way of explaining it. Using previously adhered to models of explaining conflicts, like WW1, WW2, doesn't necessarily mean that these same models are applicable in future conflicts. I just think Friedman draws too many parallels between the reasons behind previous conflicts and future ones and he sees this as moving from a _step A to B to C to D_... process, and (in his words) the "act of governance is simply executing the necessary and logical next step". pg 11 But I think there are very few logical next steps in the (geo-political, economic) *quantum world* that forms the basis of all those macro events we perceive and speculate on.


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## financialdonk (11 July 2011)

konkon said:


> No matter what happens, the Germans will be there and will be a powerhouse. Germany during and after both world wars was crippled, devastated, bankrupt, to say the least. It came back stronger than ever. Germany has better years ahead of it, no matter what happens to the Euro-zone and unity within Europe. I don't think Turkey will be 'allowed' and I don't think Turkey would want to progress west and into Europe, like it did in previous centuries. Now if Turkey, like many other nations in the future, need to secure more resources, then Turkey best head north, north east, east and perhaps south east. I'm not saying it should and I don't think it would be 'allowed' either. Why go to Europe?
> 
> The Allure of heading west for Turkey is greater control of shipping channels.  It is always a wise move when expanding to keep your main hub of power (Istanbul) further from your borders.  No point spending 30 years rolling east if it can be stopped in an afternoon from an attack to the west.
> 
> ...




Have to disagree here.  They are linear because the universe is limited by time.  As long as time is constant (and time travel is not being employed) then all conflicts are linear.  Just because people perceive the conflicts as arising over different matters or ending with different resolutions doesn't mean they are non-linear. I would argue that they would be linear parallels, whereby my opinion of events is _x_ and your's is _y_.  They run along the same axis but at different levels.

Put another way, whether events lead to a war due to previous grievances, new grievances, perceived slights (real or unreal) the one thing holds true;  There is always an escalation of events and hence always a linear event where a chain reaction is set off that results in war.  Even sheer lunacy by a rogue state has a linear story.

It's a very difficult point to argue that world events are not linear because nation-states, religious groups and terrorist cells all act with personal motive.  It is the constants of *motive and time* that gives Friedman (anyone for that matter) the ability to attempt to discuss the past, present and future with a linear story.


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## konkon (11 July 2011)

financialdonk said:


> Have to disagree here.  They are linear because the universe is limited by time.  As long as time is constant (and time travel is not being employed) then all conflicts are linear.  Just because people perceive the conflicts as arising over different matters or ending with different resolutions doesn't mean they are non-linear. I would argue that they would be linear parallels, whereby my opinion of events is _x_ and your's is _y_.  They run along the same axis but at different levels.
> 
> Put another way, whether events lead to a war due to previous grievances, new grievances, perceived slights (real or unreal) the one thing holds true;  There is always an escalation of events and hence always a linear event where a chain reaction is set off that results in war.  Even sheer lunacy by a rogue state has a linear story.
> 
> It's a very difficult point to argue that world events are not linear because nation-states, religious groups and terrorist cells all act with personal motive.  It is the constants of *motive and time* that gives Friedman (anyone for that matter) the ability to attempt to discuss the past, present and future with a linear story.




In hindsight the path to an event may be linear but it is technically one of an infinite amount of possibilities that could have arisen, even though reason would allow us to limit these possibilities. The quantum world must prevent us, as speculators on future events, from accurately predicting future events. I just don't see how past events or a set of past events linked somehow, can help you form conclusions about future events. I'm talking about interactions here on Earth and not seeing the sun rise in the east tomorrow morning. 

I think that my idea of linear here differs from yours. I understand where you're coming from and these ideas expressed by you relate to physics and all of those data points that make the big bang theory plausible. And there is a fair bit of relativity there too, I guess. That's all good, but I don't think we are able to use any linear model ourselves to predict future complex events accurately all or most of the time, with no apparent pattern. Quantum mechanics, the second law of thermodynamics and perhaps some other form of physics we haven't even 'discovered' yet, must restrict our ability to accurately predict any future event. Once an event has occurred you can form some linear assessment to explain it.


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## financialdonk (11 July 2011)

konkon said:


> In hindsight the path to an event may be linear but it is technically one of an infinite amount of possibilities that could have arisen, even though reason would allow us to limit these possibilities. The quantum world must prevent us, as speculators on future events, from accurately predicting future events. I just don't see how past events or a set of past events linked somehow, can help you form conclusions about future events. I'm talking about interactions here on Earth and not seeing the sun rise in the east tomorrow morning.
> 
> I think that my idea of linear here differs from yours. I understand where you're coming from and these ideas expressed by you relate to physics and all of those data points that make the big bang theory plausible. And there is a fair bit of relativity there too, I guess. That's all good, but I don't think we are able to use any linear model ourselves to predict future complex events accurately all or most of the time, with no apparent pattern. Quantum mechanics, the second law of thermodynamics and perhaps some other form of physics we haven't even 'discovered' yet, must restrict our ability to accurately predict any future event. Once an event has occurred you can form some linear assessment to explain it.




Haha my head is about to explode.  This really isn't an area of expertise for me (Physics).

I think it the attempting to discuss and predict future occurrences that is important.  Someone predicting is closer than someone not predicting.  Someone that claims to profess minuscule details that will occur is bound to wind up having egg on their face.


There are many events that are quite plausible though and then one works around a continually changing framework.  IE.  The US will be the sole superpower of the 21st century.  Certain interest groups don't like being subject to external pressures from nation states.  Ergo there will be parties (nation states, religions, terror cells) that rise up against the US.

Not sure I have much more to add as I think we have covered most of the ground surrounding this particular topic.


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## konkon (18 July 2011)

A friend of mine thinks that all this talk of the US and its high-end protective services agencies (NSA, CIA, FBI, defense etc) having its funds etc cut (or potentially cut soon), is not that important an issue, as I make it out to be. He, and a journalist on TV before, seem to think that these agencies (and many more we take for granted, or don't know even exist) are somewhere on the periphery of things, with respect to the US economy, and not at its core, like I 'know' is the case. 

I do strongly believe there are shadow groups (not belonging to only one country) that have control of the international banking conglomerates, that are trying to destabilize the US, through its economy (and this has been going on for perhaps a decade); add to this the number of countries that don't like the US and you have a real problem. There was more to the GFC (and we haven't left it yet) than the issuance of bad loans. *Being swept with more debt than one can handle and pay-off with revenue (not more debt!) was an inevitable course.* The motivation was there and the outcomes were to benefit those that can only benefit from issuing more and more debt. 

*Now, why is the US and all of its high-end (as mentioned before) defense agencies a hurdle or barrier for these shadowy groups and their banking cartels? Well, controlling the world's economy for one, with limitless and borderless financing of all and any nation/country on earth, no matter who they are(!) at all levels.* These shadowy groups and co. probably see the US and its defense organizations as a barrier to increasing the level of investments etc 10 fold. 

Now this all might sound like a good idea at first, but there is a reason why the US has to police the world to the extent it has to. If you allow free-for-all financing at an unprecedented, extreme, macro level to take place at the potential magnitude mentioned, with very little restriction, it may appear to work well for a couple of years or so, but you would have allowed all kinds of potentially irreversible scenarios to take-place. One would be the financing and refinancing of two and even more hostile countries, that have been covertly *financing their own agendas*, defenses and aggressive stance on geopolitical issues. 

These same shadowy organizations are well aware of the fact that if you cut funding from someone, group, organization etc, then you have weakened them to some extent. A net loss is easily a net gain for these shadowy groups and co and all hostile nations to the US. *Or just some nation that (short-sightedly) sees more opportunities if the US wasn't in control. *

You cannot, in this world, have a cooperating world like many people believe. The void will always be there for one or more countries to stick their necks out and go for world domination; I guess we could all unite if we saw a threat from some alien attack, but that's not likely to happen. 

The US will create money from thin air if it needs to in the future if it finds it is losing its control of the currencies, markets, seas, skies etc etc; just a note, it may happen gradually in this order too if many shadow groups and the international banking cartels have their way. Protecting the USD, the markets is crucial for the US if it needs to keep controlling the seas and skies etc over the long term.* I just wish Congress and high end US corporations would realize this!* Creating money out of thin air (or just keeping the printing presses going at a far greater rate than today) would have dire consequences for most countries outside of the US. So if you think there will be an easy transition if the US loses its grip on the reserve currency status, world markets, the seas etc, then think again! Bet on this happening and you're bound to lose sleep at night worrying about your long term investments. 

One of the things that's worrying me about Wall Street these days is *many indicators* like the Dow, that have traditionally reflected the status of the domestic US economy, is now *reflecting a general path that we may be taking*, that relates to the comments about shadowy groups trying to transfer power and wealth from the US and all its markets and agencies etc. The Dow and many other indicators are reflecting a gradual transfer of power and wealth from the US, although on the surface these indicators would be suggesting better than expected forecasts and earnings. We are being disillusioned by all this pseudo euphoria and the hope that things will get better, and many don't see *these indicators as a sign of transformation*. This is not a sign of real wealth in the US nor is it a sign that things will get better in the US like many economists believe. Multinationals are giving up on the US and are sourcing their wealth from outside the US. Now this all doesn't seem to fit in with the taxation with representation principles that the founding fathers strongly believed in! *Wealth is being distributed outside of the US and there is a real lack of representing the US domestically. *

Congress must support and not only fund, *but continue to boost spending on higher-end defense and protective services agencies of all kind!* I think many members seem to think that these agencies don't play a central role in protecting the US in all ways and their (Congresses') asses too. I don't know much about US federal law, but I wonder if there is some way to enable defense, for example, to gain access to funds from the Treasury perhaps, as a matter of national importance of the highest level. It could be based on some technical indicative measurements that put the US in (potential) harms way and that those key levels need to be maintained and reinforced. And I'm not talking about Martial Law here; US citizens have nothing to do with this calamity. Now I'm bound to hear 'in a democracy we don't...', but realize this, *that there may not be a democracy left the way you think it should exist, if all of those protective services agencies lose funding and their capacity to uphold and protect these principles.* I guess we could always believe economists and Wall Street when they tell us the US economy will get better and the signs are there. No they are not! *The only signs are the ones pointing the way to where the money is flowing - and it ain't going into the US! *

Add to this that we are always in a state of conflict, although we go to sleep at night not thinking or knowing about it. It doesn't always come in the physical sense and I'm not talking about this here. It is played-out in the international markets every day, for example, and without US's (and all its allies') protection, as mentioned before, the scales will most likely tip in favor of foreign interests, heavily backed by those shadowy organizations, the international banking cartels and those that don't like the US led model! Ask yourself if you would want to live under this system and look at how your life may change for the worse in the long run. So who will protect us form all this occurring? Wall Street, bankers, multinationals, congress or the so-called 'free' markets etc? No way! It has to start from the President, his network/team and all protective services agencies. 

*Going back to an earlier point, Congress, and dare I say it, the courts should not be in a position to prevent and overrule any technical basis for insuring that those protective services agencies (NSA, CIA, military etc) should get all the funding they need to reinforce the US's long stance of controlling the reserve currency, markets, seas, skies, electromagnetic world etc. *


Another issue that I need to get right is: don't back football games (ie. scoring over/under a given future score) on previous form, stats etc alone (*especially if you don't know much about the teams etc*)! The inconsistency in the AFL on the main bell curve side suggests a roulette (black or white) approach with the laws of probability thrown in as well. Yes, a different approach this weekend, indeed!


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## Knobby22 (18 July 2011)

konkon said:


> I do strongly believe there are shadow groups (not belonging to only one country) that have control of the international banking conglomerates, that are trying to destabilize the US, through its economy:




Seriously, its not a shadow group, its the Republicans and their aim is to make sure they make Obama a one term President, and they are doing it in full view.


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## Glen48 (18 July 2011)

Seems to me all are keen to make Obama a oncer and because he is coloured he must not be in control however no one is looking  at the big picture only tall poppies.

Obama didn't cause the problem only help it along it has been stewing for decades and Bun Liner had the most effect on driving USA down.

If you spent $30 Million a day everyday back to the birth of JC you will  have  spent the USA debt as it stands now.
 No one can save USA it is finished and therefore no political party can turn around the sinking ship all they can do is point score as they go under..

OZ is doing the same watch what happens in USA to see where we will end up.
 There is no guarantee for any country to become top dog as things like Earthquakes, weather, political events such as assignations can skew the picture over night etc


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## wayneL (18 July 2011)

Knobby22 said:


> Seriously, its not a shadow group, its the Republicans and their aim is to make sure they make Obama a one term President, and they are doing it in full view.




Substantiation please.


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## konkon (22 July 2011)

*the inflation configuration*

If one argues for an increase in the minimum wage, then many economists, accountants, politicians and large multinationals will argue that this is an inflationary move. Economics, like a lot of disciplines, is predicated on configured reasoning, and just like all forms of reasoning, this configured logic can change over time, especially if one is forced to meet certain outcomes. 

It's amazing that the price of pretty much all everyday items, bills etc have gone up drastically over the past decade and inflation didn't enter the argument up until a year or two ago. The fact is wages haven't even been able to keep up with the rise in price of many items. The central banks around the world look at wages data like hawks, but have largely ignored the drastic increases in prices of many of the things we pay for, utilities, rents etc etc; a major flaw in central bank ethos. If wages, mainly in the past, increase by a factor of .5% then they hit the panic button. 

I think that one of the biggest problems, outside of perpetual debt, overpopulation, lack of resources, is the world being 'run' by accountants and economists, that at large don't create anything in the real economy; maybe the former should just stick to doing our taxes. Now stats, mathematics can (at times) take you in many contrary directions, if you alone rely on these things primarily. If you base ideas about tackling real problems, like those mentioned above, on stats rapped-up in economic jargon, strictly configured to provide certain outcomes that seem to benefit (in the short-term) big business and not the welfare of a nation's longevity, then you are (like we're experiencing) setting yourself up for a major problem in the future. The problem may only be a restructuring of sorts, but a restructuring of the potential magnitude will hurt many on the wrong side of the equation; as was the case in 2008, this would be most people on earth. 

Many economists, accountants are better suited in the art room for all their creativity. The EU debt problem at the moment is being dressed up repeatedly to look like a viable long term plan. But if you ignore all the colorful economic talk, you're pretty much looking at more debt (that the masses will end up paying for) to pay for previous (and even future) debt.

Economists, accountants, politicians were the driving force behind keeping wages below par and they have no real idea how to tackle a growing perpetual debt problem that has swept the world. In fact, they are creating even more debt, which is paraded as something else, and think that the public is silly enough to believe it will one day get resolved by some clever methods that only accountants/economists understand. It's as if none of us can talk about the direction the world is taking economically, because we're not economists and we don't 'understand' what is going on! It's probably a good thing to be excluded from economic conformity in times like these, because it reduces the chances of you being brainwashed with all this crap about debt restructuring. 

At the end of the day, can you as an individual, company etc pay-down over the course of a period, (all) debt with revenue/profits? When was the last time you saw some expert economist, financial advisor etc on television base his assertions on this fundamental principle? Maybe sales reps don't need to do this!


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## Knobby22 (23 July 2011)

Knobby22 said:


> Seriously, its not a shadow group, its the Republicans and their aim is to make sure they make Obama a one term President, and they are doing it in full view.




Here we go -from Mish Republicans will screw their own country to make sure they hurt Obama.

From Mish (following)

Republicans Blew Opportunity for Game-Changing Legislation

This was a dismal outcome, but hardly unexpected. Both sides are partially to blame but in my estimation Republicans blew it big time. They could have asked for anything in return for tax hikes.

I do not know if Obama or the Democrats would have gone along with those, but after all the Obama talk "I was willing to take a lot of heat", Republicans blew a golden opportunity to pass some game-changing legislation in return for some pissy tax hikes

Obama told reporters at the White House Friday evening that he had offered Boehner more than $1 trillion in cuts to discretionary spending — both domestic and defense — and $650 billion in cuts to entitlement programs such as Medicare, Medicaid and Social Security. He said he had sought revenues that were less than those put forward in a bipartisan plan by the Senate’s “Gang of Six.” He said the $1.2 trillion in revenues could be accomplished without raising tax rates but by eliminating loopholes, tax breaks and deductions.

Now that he has “been left at the altar a couple of times,” Obama said, the question for the Republicans is, “Can they say yes to the anything?”


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## IFocus (23 July 2011)

Knobby22 said:


> I do not know if Obama or the Democrats would have gone along with those, but after all the Obama talk "I was willing to take a lot of heat", Republicans blew a golden opportunity to pass some game-changing legislation in return for some pissy tax hikes




There has been a lot on commentary about the Republican regret in the future of letting the deal fail.


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## konkon (7 August 2011)

If you beat the grass, the snakes will eventually come-out! Just look at the number of countries (China and Russia being two very vocal ones in the past few days) that want the US to lose its reserve currency status. This has to mean that they would't mind seeing the US slowly loses its grip on geopolitical matters too, and I think that this is what these two countries in particular are emphasizing! I'm not surprised of this, and this is one reason why I never did see either of these two countries (and there are many more!) as supporting the US's (and its allies') long-term efforts/objectives to oversee and protect the geopolitical world from inevitable chaos, if the US (and its allies) weren't in control. 

Just think of what the world would look like if the US and its true allies (some include Australia, Britain, Canada, Germany, Japan, etc) didn't bother to oversee geopolitical issues and allowed the 'world' to just sort itself out! It would end up being a very unsafe world for most of us, in the east and west. 

Sure you would have some countries step up the the plate, but you would have fragmented and conflicting agendas, power distributions and no referee. This is so dangerous a scenario and if we just put away our distracting cheap gadgets from China for a moment and think about this. 

Media outlets just don't report on these probabilities, even in editorials. 

I think that the US, in general, will have no choice in the future but to get even more militarized in nature (even if it's not obvious), even though congress, big business and very influential shadow organizations are becoming increasingly opposed to such future moves. 

I text a friend last night and stated: "Those marines standing still in and out of the White House, are not for show. They are a reminder to the world that the US has always had the backing of its defense forces no matter what. So all types of non supporting countries/groups etc can go and get #$#%$%%ed! That includes the S&P rating agency!"

A time to see what some countries and organizations really think of the US and a time to see what course we might be taking, based on these and other observations.


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## konkon (4 September 2011)

Some modifications to the original post. China's ambitions over the next two decades and beyond are a concern for me. If it seeks to take control of world wide geopolitics, it won't do it like the US does. China would not oversee all geopolitical regions and potential dangerous gaps may exist; even more of a reason to continue to support and reinforce US/allies' agendas.



konkon said:


> Major countries that are not strongly allied with the US: China, Pakistan, Russia. Iran...Careful attention was placed on *allies and non-allies* as this gives some sort of a blueprint as to what a major war might look like if the ^$%##$^ hits the fan!




When you beat the grass, the snakes will come out. Over the past few months it has become clearer, to me, that several nations might want to stick their necks out and look at future geopolitical zones that they might be able to have some influence over. China and its desire to strengthen its military has its sights on (perhaps most geopolitical areas in two decades, and beyond) south-east Asia. It may form a strategic alliance with Burma, but not with Vietnam. Even more of a reason for countries like Thailand, the Philippines and perhaps Vietnam to form a greater alliance with the US and its allies. Vietnam is a tricky one and China and the US will probably seek its support. Luckily, no Vietnam war revisited though.



konkon said:


> The US is still in control-mode and has survived several stock market crashes and recessions. The norm has become to not pay a huge part of one’s perpetual debt and this goes for many individuals, companies as well as countries...




Stock markets will become even more volatile with next generation algorithmic computer trades taking markets in all kinds of directions, more frequently, and with greater momentum. Added to this the greater world-wide participation of investors with short term trading mandates. 



konkon said:


> One world-wide correction resulted, not from debt or the hand of the Federal Reserve, but by the development and implementation of *quantum computing* and its ability to in an instant decrypt, through even brute-force, classical computing encryptions. So financial companies, governments, internet etc had to reinvest heavily and reinvent themselves, which was costly...




This will add another complex dynamic to short-term heavy volume trading. On the issue of corrections, there will be more and more; a higher than normal historical average and for many reasons.



konkon said:


> Europe is heavily in debt and is going nowhere really...




The European Union may no longer exist, or may no longer exist in the same format, for some time. An EU mark II is on the cards, but with a different focus and with initially stricter guidelines by its fellow members. This could very easily happen in the next few years. Or even sooner.



konkon said:


> China has the world's largest economy but does not control the electronic markets; this (most asset classes around the world) is still under the US's control...




China will probably use Hong Kong as its financial hub and China will continue to try and direct business within its control. Buying harder assets around the world is still an important strategy for the Chinese. But trying to gain control of financial markets won't work. Using Hong Kong as a strategic (English Speaking) financial hub is a good strategy though. 



konkon said:


> Collusion and market fixing is still part of the game.




But with greater sophistication, volume and frequency. 



konkon said:


> Countries like Australia may have to militarize and further protect its borders and protect non-urban regions for fear of a possible invasion by hostile and desperate nations that need its expensive and rare resources; and they probably don't want to pay for them anymore. A long shot, but still a concern even in the next 50+ years. It will become an even bigger ally of the US.




Indeed. Hopefully, we're keeping an eye on China's slightly more aggressive stance on geopolitics in recent months. I'm sure many countries in South East Asia are doing the same. 



konkon said:


> China has a real problem; the demographics are skewered and do not favour an even +4% growth anymore (yes, no longer 10%). Their cities have long become the most expensive in the world (and so have many of their products!) and there still is a problem of the ultra-rich and the mega poor. The west still finds it hard to do business there, and there is growing unrest by a restricted and controlled people. The west may at times latently manipulate this to their advantage.




A whole lot can be said about China and the way it will continue to affect the west's inability to find its economic footing in periods of economic distress; and there will be many periods like this.



konkon said:


> Another competing reserve currency failed to dethrown the USD, as it was initially used, accepted but ended up being manipulated on the exchange markets by the US and their highly sophisticated trading computer networks, which still controls the markets.




*Not sure a competing reserve currency will take-off at all.* The Federal Reserve in the US will make sure it doesn't, as long as Bernanke has his way. But Congress is, in an indirect (and unintentional) way, adding pressure for the USD to lose its reserve status. Sorry, but congress is a real problem for the US, as ironic as this sounds. At the moment, *I'm convinced Bernanke wants the USD to remain the world's reserve currency.* But he has lots of opposition. He won't be the Fed Chairman by 2030, obviously, so hopefully the next Chairman has the same agenda and ethos. 



konkon said:


> Wealth will still be *made from lack of supply and high demand for space/land, housing, soft and hard commodities etc* and not necessarily form innovative developments and innovations. So don’t expect the world to look too dissimilar to what it does today; just more populated and more expensive. A real let-down if you ask me.




One of the reasons why we're in the current mess is that the world has stopped creating and innovating. Globalization and the transfer of jobs to places like China, has meant that the middle classes have lost their competitive edge. 




konkon said:


> One of the biggest problems that countries have is an overburdening perpetuating debt crisis. Many, including the US, have no choice but to restructure their economies and even currencies. And yes, the finger was shown to countries holding and demanding payment on (unpayable) debt, more than once.




Let's just hope that wars don't break out because some country went after some other country's harder assets, predominately because debt agreements weren't honored; *hopefully no wars break-out for any other reason too. *



konkon said:


> The United States has the most sophisticated military by far, and has opened up its doors to next generation defence and avionics (out of this world!) technologies, to some extent or to the extent they permit!




China will be catching up at a rapid pace though, and recent (officially) publicized articles by the Pentagon have suggested this. Don't know about you, but this is a concern for me. 



konkon said:


> Two of the biggest risks are *overpopulation and perpetual debt*.




And what to do with all this debt! Changes in the geopolitical landscape may be of some concern too.


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## explod (4 September 2011)

On China I think a lot are out of touch.  China is coming out of the dark ages for them and the current middle generation are still slaves within themselves from the old regime.

One only has to look at the huge numbers of Chinese students at Doctorial Phd level throughout our own universities and now spreading throughout the world.  The fast adoption of the Western culture as well as the economic, industrial and technological changes apace before our eyes.

The US is a cot case and dying.  China sees itself as part of the big picture but in particular as part of the overall Asian region.   Their investment in this country alone is now enourmous.   The days of ruling with the gun and stick have gone.  With modern communication the world at a socialogical level fast becoming one.

We cannot imagine the changes from now to 2030 but I do not believe that individual countries no matter how large will control on their own or against others.  Wealthy and self interest groups will still be a major problem.

The front now are the marginalised extreme politial movements and the fanatical religious groups; and the US itself has more than its fair share on that front within its own borders.


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## konkon (9 September 2011)

*A Better Accreditation System for (us and) Ratings Agencies.*

I think that to get a grasp of a better economic world (or future world) there needs to be different sets of requirements (that can be incorporated into what they already use) from rating agencies like Finch, S&P and Moody's. 

What seems to be happening is rating agencies are rating countries in isolation from other countries and the global picture overall. What should be happening is the implementation of a kind of *global impact scorecard*, where each country also has a set of criteria to address issues like, what impact is their own economy having (good, bad, or both) on others and the global picture. The idea is *to gain a net result of their global impact reading on the world's economy* after you factor in all (or as many) of the variables. 

So a global impact reading, measurement or rating might consist of a country's net impact on the global economy, however little or big. *If the impact is a negative read *(ie. the transformation of manufacturing to China or the systematic, synthetic manipulation of currencies to gain economic (military even) advantages) *then that particular country should have pressure on the downside to its overall rating, especially if it's clear that that country is not playing on a level playing field (no matter what the excuse), and is jeopardizing the future prosperity of other key nations to the world's economy. *

*Net imbalances should be taken seriously and addressed accordingly, especially amongst key players.* A global impact reading must surely have a say in how and what other ratings are judged. So how can a county with a AAA rating, for example, keep this over the medium term if this same country is being disadvantaged by synthetic and artificial means, by another country? There would be more clarity in blame too, as clearly it would not be the fault of the country that is being squeezed; but blame does go to the less fortunate country now-days, and this is odd considering they are not the ones doing the synthetic and manipulative moves to gain advantages. 

A global impact reading would also strengthen the, so called, impartiality of those making those crucial judgements, by factoring in to their overall accreditative conclusions (or matrix checklist systems) a perhaps more accurate read of longer term objectives or anticipatory events.

So if you're not playing fair or not playing on a level playing field then you should be penalized to some degree and until certain requirements are met. 

We probably need to tame the future economic beast anyway we can and have a much better understanding of all kinds of future ratings, especially when *volatility* due to higher global market participation, newer and more complex trading instruments and next generation algorithmic trading computers etc, *will most likely be higher on average historical terms.*


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## konkon (11 December 2011)

*Re: The (Economic) World in 2030 - and before this year!*

Thought I might add to some of my previous comments relating to 'The (Economic) World in 2030'; and even before this period. 

_"Turkey will probably be a country that will help to negotiate with other Muslim nations, like Iran, if tensions become high. There may be some tension between Turkey and Iran but not like Friedman suggests. " my post 3rd july 2011_

I still think Turkey will continue to be a more proactive nation that wants economic etc cooperation with other nations, but Turkey, like other nations, has sovereignty that it won't want to compromise. So that might mean, Turkey will not stand for major economic and political disruptions coming from other countries; I think this would be from the east, south-east and north, and I still strongly believe it will not seek to break-off relations with Europe at large (excluding Greece, perhaps). It may have no choice to break-off relations with Europe, if wars break-out in the Middle East, but Turkey will not instigate tensions with Europe at large and the west. Turkey will want to remain 'friendly' with the west. How this plays out depends on so much. It may, like many nations and people, flip-flop on key issues etc. But Turkey will resist the possible future pressures not to side with the west. In other words, Turkey will want to remain a friend to the west, even with all the opposition. 

I think Friedman is right though that Turkey may not see eye to eye with Iran. Turkey may still try repeatedly to negotiate with Iran on several issues, to keep peace at a relatively stable level in the Middle East. I certainly hope that Turkey, if it needs to take sides later on, sides with the west and not with Iran's aggressive agenda in that region. It would be in Turkey's best interest to align itself with the west if things escalate out of proportion in the Middle East later on. Or not take sides at all and just defend its own borders if it needs to. Let's just hope that a major war doesn't break-out in the Middle East. 

_"Let's just hope that wars don't break out because some country went after some other country's harder assets, predominately because debt agreements weren't honored; hopefully no wars break-out for any other reason too." my post 4th of september 2011_

Gee, a lot can be said about this. Over the next few years, it won't be about going after someone else's harder assets. But, as is reported in the press, escalations and tensions etc(!) may come down to making sure Iran doesn't advance any further with its nuclear ambitions. A major war in the Middle East before 2030 or even 2015?! I have strong opinions on this one! I just hope for Iran's sake, it plays the odds and sees that it can NOT even come close to defeating the 'west'! I strongly agree with Israel's (and the US's) strong stance on not wanting or allowing Iran to go nuclear. Many in that region would not want Iran to achieve this either, and rightly so. 

Also reports of China allying itself with Iran in more ways than one, speaks volumes about China, I think. China is making the historically classical mistake of making friends with someone that doesn't see eye to eye with the west. Sure Iran has lots and lots of oil, that may find its way into China later on at disproportionate levels. But China is making a big mistake of perhaps one day becoming an enemy to the west. I don't think we're there. China is still officially seen as a cooperating partner to the west and east. But it's likely that this will change. 

India will play a strategically important role in that whole region. It's positioned nicely geographically for the west. A lot more can be said about India's key geographical position. The same can be said about Burma. 

_"And what to do with all this debt!" 4th of september 2011_

Well the debt is just getting bigger and bigger. What concerns me is the reported derivative exposures in financial markets at the +10s of trillions of dollars, and the leveraging being in the 1/25 to 1/75 level. Many of the major banks seem to be doing this too. A real and underreported risk to the stability of the financial system as a whole. 

_"Not sure a competing reserve currency will take-off at all." 4th of september 2011_

I've been reading that the IMF was developing IMF SDR bonds as a way to issue or buy-up debt in the world. This was also seen as a potential future competing world 'currency' to the USD. I think the IMF should stick to funding 3rd World debt and not sticking its neck out like this. Anyway, it won't happen. The suggestion that congress in the US should block funds to the IMF should go ahead, if the IMF sees itself as just another 'having the mandate to print money or bonds from thin air' institution.

If the IMF has a newer agenda like this, countries like Australia, the US should see it as a breach of contract, withdraw funds to the IMF and redirect the funds to ie its defense forces. 

To end, I agree with those that think Sarkozy is pretty much the captain of the Titanic and is just repositioning the deck-chairs. Well done David Cameron for not wanting to compromise on GB's sovereignty. Europe is much better off not accepting more record levels of debt, bonds etc. I just hope that Sarkozy's take on the Napoleonic era wasn't just about land and guns, but included major lenders and compromising one's position.


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## explod (11 December 2011)

konkon, you are in dreamland and talking to yourself about the current world landscape, two to three years out from today in my view at the most.

In fact there is almost no content that is on topic about the world in 2030 and with the rate of change now occurring I would say nobody would have any idea, suffice to say as has been said, it will not be a very nice place at all.

Your posts are a tedious load of rubbish.

In my humble opinion of course.


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## Smurf1976 (11 December 2011)

I think it's fair to say that the next 20 years seems highly unlikely to involve a simple continuation of the broad trends we've seen over the past 40 years.

Finances, energy, food, the environment and other factors would all seem to be against "business as usual" in my opinion and indeed most of them seem to be near some sort of turning point right now.

Finances - the situation is clearly unsustainable with the only real questions relating to what emerges, when and with what consequences. Business as usual doesn't seem to be an option. The wheels have just about fallen off it would seem.

Energy - we've got the economy falling in a hole and yet oil is $100 a barrel and rising which ought to be ringing some pretty loud alarm bells somewhere. No matter how much oil may or may not be in the ground, we're clearly not able to keep extracting more and more of it and maintain low prices in order to continue business as usual. The wheels have already fallen off with this one and there's nothing left to debate other than what happens next. Conventional crude oil is, for practical purposes, no longer a means of facilitating business as usual economic growth.


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## Glen48 (11 December 2011)

http://www.realecontv.com/page/6068.html


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## Glen48 (11 December 2011)

http://www.realecontv.com/page/5961.html


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## young-gun (12 December 2011)

Glen48 said:


> http://www.realecontv.com/page/5961.html



"economic depressions are by and large products of political intervention in the economy."

perfect summary.


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## Knobby22 (12 December 2011)

young-gun said:


> "economic depressions are by and large products of political intervention in the economy."
> 
> perfect summary.




Yes, but in this case it was exacerbated by the REMOVAL of regulations that had been in place since the Depression to stop precisely what happened. It is never as simple as the "bankers" will push.


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## wayneL (12 December 2011)

Knobby22 said:


> Yes, but in this case it was exacerbated by the REMOVAL of regulations that had been in place since the Depression to stop precisely what happened. It is never as simple as the "bankers" will push.




Exacerbated, yes. But only one facet of the malaise. Without governments bulldozing credit into the system and facilitating both small and big ticket debt, it is possible that the system could have self regulated via healthy caution.


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## explod (12 December 2011)

wayneL said:


> Exacerbated, yes. But only one facet of the malaise. Without governments bulldozing credit into the system and facilitating both small and big ticket debt, it is possible that the system could have self regulated via healthy caution.




Yeeehhhaarr. 

dear Maggie Thatcher said, "they are all basically honest and can regulate themselves",

pull the other leg.

And agree wayneL,  Governments need to keep right out of the markets but they do need to regulate and audit all these wonderful honest ones.


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## wayneL (12 December 2011)

explod said:


> Yeeehhhaarr.
> 
> dear Maggie Thatcher said, "they are all basically honest and can regulate themselves",
> 
> ...




Plod

They are as basically honest as the bureaucrats who seek to regulate them.

There is a balance between bureaucracy/regulation and laissez faire. Neither should dominate IMO.


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## explod (12 December 2011)

wayneL said:


> Plod
> 
> They are as basically honest as the bureaucrats who seek to regulate them.
> 
> There is a balance between bureaucracy/regulation and laissez faire. Neither should dominate IMO.




In the past under the Westminster System we had the Judiciary, the cops and the Auditor as set creatures of Statute under the hand of Government but that was as far as the line was crossed.

Each was independant to carry out the individual charter without Government interfearance.  If there was a problem then legislation was changed or amended.

Today we have direct political tampering so that direction and the achievment of each charter has been lost.

I remember doing a course called "Managing Chaos" within an organisation, but little did I realise then that we were headed for total chaos across disciplines.


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## Glen48 (13 December 2011)

I am very sorry because i have to destroy some popular opinions on some things, but i just have to do that. When i said and keep saying “no rules” i mean that. You can not have something like ideal preparations, you can only try to have it (and then hungry man down the road still might shoot you with his antique hunting rifle for a bit of flour). 

So again on bartering and gold and silver:

No, gold and silver was not like second money, or second value during SHTF, it was not even worth like in normal times, and in most of the cases it was dangerous to have it a lot (actually it was too dangerous to have anything in great amounts and let other people to know that) If you had for example 1000 gold coins, and let s say that one coin worth 150 USD in normal times, you could think that you are rich in shtf.

But in reality it was hard to find someone who give you some food or battery or whatever useful for one coin. Gold coin was not useful for 90 percent of people, what they could use it for? Eat it? Start fire with that?

Only people which could use that gold were people who had connection to outside world, so they could use it for buying things trough their connections. In most cases they just used situation to acquire great amounts of gold for the future and in exchange for some simple things, like food, or fuel or…

They did that because they had everything else.

But thing is it was hard to make trade with people like that, because bad kind of people had connections or were gathering gold, so they can just gonna take that gold from you and give you nothing, or bullet in your head.

So yes gold was useful and not useful, it dependeds what kind of people or group you belonged to.

If we have worldwide crisis and you can not get food anywhere the first currency of choice will be food or useful things, not gold or silver. If you want gold to keep some kind of value for one day after all is over make sure you are prepped for long, long time crisis before that.

It is better to have some useful stuff in your prepping, then to waste money on gold or silver. And of course if you still want to have a lot of gold as a part of your preparations, i suggest you buy lot odd simple gold rings, or simple cheaper gold necklace, it makes more sense than to have gold coins.

In hurry it is gonna make more sense to offer “your wifes gold ring” someone for cans or something else then to offer someone some “strange” gold coin for food or one of the typical gold coins you can buy from gold sellers these days, it can raise some questions, and you do not need raising questions in situation like that. Stay low key. Be the guy with the last family jewels not the guy with gold coins from typical gold sellers.

I would say that in SHTF it is gonna be easier and cheaper to get gold then in normal times. Bartering was not a thing of some regular prices or regular places, even “expensive”things changed. Meet the guy with terrible toothache and you are only person who can do an ok tooth surgery. He will give you some gold for that if he can or a lot of other valuable things to simply get out of this situation.

As i remember coffee and cigarettes was hard to find and expensive through all of the time, everything else changed, sometimes was expensive and hard to find, sometimes not.

But important to remember is to make it easier to you, so obliviously, it is much easier to carry and trade candles and batteries than 20 liters of fuel. There is no sense of letting everybody know that you are “man for trade” and that you have a lot fuel for example, because then you might end finished robbed and probably dead.

If you can be, be a traveling trader and do not trade too often with same people if you can avoid that. People also got shot after trading with one person a few times before. Other person might just run out of things to trade and call on you to come to trade and all he has is bullet for you in exchange for what he needs (and he knows you come with what he needs).

In some hardest period cigarettes was sold at one piece, i mean you could buy one cigarette for something, it was so expensive. Same was with coffee, even some substitutes for coffee were expensive. Now you need to know that traditionally here people drink coffee a lot, so maybe some other thing is so “important” in your area, like tea, beer or something else.

But do not expect that people will loose their addictions because times are hard.

One of my older relatives smoked cigarettes while he had it, after that he smoked tobacco (pipe), after that he bought from some folks pieces of dry tobacco roots or tree, used knife to cut small pieces of that and smoked that, and after that he used some dry leafs from tree and smoke that. He never quit smoking.

So in short instead of getting gold and silver to preserve your wealth you might consider getting useful stuff and if you like gold there is always option to get it from unprepared people in exchange for useful stuff if you think you need this for times after. If you already have everything you really think you could need then gold and silver might be good, better than just money for sure.

I do not believe in any quick recovery. Even with help from other states (thank you all for that) it took long time before things became more normal again.

If things don’t get better you do not want to be stuck with gold and having to do risky trades. Do not think that other people do not see when someone is desperate and take advantage of it.

 » 37 comments


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## cynic (13 December 2011)

Glen48 said:


> I am very sorry because i have to destroy some popular opinions on some things, but i just have to do that.




Glen48, this is the first time I've actually read something in one of your posts that I think I disagree with. Are you genuinely obligated to dispel other's misconceptions and contrite when you do so?

(When I read this part of your post I had a mental image of you grinning like a Cheshire cat whilst busily tapping away at your keyboard.) 

Go on, admit it! You love jumping on the opportunity to share your insight into the primal aspects of human nature when others are opining human civility, orderly behaviour etc. 

Whilst I take comfort in finding that I am not totally alone in my awareness that much of the human civility we enjoy today is likely to dissipate when the instinct to survive precepitates pursuant to crises, I do still consider this to be one of those rare occasions when I would be delighted to have my perceptions disproven as I take no delight in the prospect of the human misery and conflict which I believe to be inevitable at this juncture in mankind's evolution.


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## damien275x (18 February 2012)

You people are too negative. I think you underestimate the ingenuity of people and our ability to adapt and progress as a society. Here is my take on 2030:


*2030: An Insight *
The year is 2030. The baby boomers projected that they would have a good 10-20 years of life at least, after they retired. The reality is that due to medical/pharmaceutical breakthroughs the average baby boomer is now living an extra 5-10 years of quality life on average. The Government has implemented a program called Boomer Boost, which is basically a scheme in which the younger generations are taxed at a higher rate to support those who are living longer than they expected. This fact combined with advancements in technology and the rise of virtual housekeepers see more with the capacity to live at home instead of relocating to aged care homes.

Population has increased substantially. Food shortages were on the rise in the 2020's, but when these shortages occurred, prices rose, and when prices rose, those in farming and agriculture all made more money, the fact that they were making 10 x that of the suits on Wall Street combined with breakthroughs in the renewable energy sector fueled the great boom of the late 2020's. I, of course lost a few hundred thousand dollars because I was one of the many fools who believed he could ride the wave up to the top and then get out. I was dead wrong, and came to the party later than I thought I had. I was only 10 years old when the tech wreck happened in 2000 but having a background in IT/Software development I remember reading about it wishing I was 20 then. That regret fades from my mind because I probably would have lost it all then, too. 

Scientific breakthroughs are through the roof in 2030, literally. We have just seen the completion of the 77th Farm Tower that has 200 floors of farming fit plains, with each floor perfectly replicating optimum growing conditions. Fruit and vegetables which were traditionally seasonal can now be grown all year round and we are seeing the pressure on prices finally ease. These towers are powered completely by a new, clean, reliable source of energy. The only downside is that the governments tax the use of this substance heavily despite it being as abundant as oxygen, but they need to pay public servants and paper shufflers inflated wages somehow.

The cost of air travel is now so cheap that even people in the lower class can travel. It is as common as riding a bus. The travel time on an aircraft from Australia to the other side of the world has been cut in half, and because of the in- flight entertainment and virtual reality headsets, you don't even notice this time because you are too busy taking a walk around your destination and checking out places before you get there, bookmaking them on Walkthrough. Walkthrough is the newest social networking site that utilizes virtual reality technology and allows users to share HD, 3D, 360 degree snapshots of images and experiences they have in “Real Life” Real life is a term that has recently been added to the Collins and Macquarie Dictionaries, defined as the difference between ones physical life and ones online life. The advancement in virtual reality technology is seeing a whole new world of addiction for those who want to escape reality, escapism reached an all time record high at the height of the second great depression in 2017. 

Facebook of course died a horrible death in 2019 during the brutal Cyber Terror attacks co-ordinated by the Anonymous group: Not only were billions of irreplaceable personal images lost, but records and crucial files of blue chip companies who placed their faith in the cloud vanished into a black hole on October 4, 2019. Conspiracy theories emerged on Youtube2, detailing why they believed the US Government to be behind the attacks given how out of control their countries fiscal situation had become. Call me crazy but some of these arguments don’t sound that farfetched. I just don’t see how it could have been done by somebody who wasn’t “in the loop” After all – top secret location data centers were also destroyed! There was no recovering anything. I lost thousands of wedding pictures and photos of my overseas travels that day. I lost my job at a large Software Development firm, all their source code was in the cloud as all 15 datacenters across 9 different countries were blown up simultaneously. They did have data stored locally but all their financial records were destroyed. The fact that so many people placed such faith in somebody else holding their information was just incredible. The banking system was upset too. Accounts were frozen and nobody could get their money out, at least in America and Europe. Our banks did close too despite records being there, probably due to the connection and globalization. A state of panic broke out during this time. Thank god all records and systems were recovered, people were starting to believe that their savings had been wiped out. 

I would have thought that during times of no money, people would have broken into shops, stolen, trampled over each other for the last pieces of bread. But no, surprisingly, despite job loss, a loss of financial security, and a loss of identity across the board, people are spending more face to face time together than ever before, helping each other out and doing things like repairing shoes instead of buying a new pair, repairing clothes, reusing and recycling everything possible. There has been a real shift towards quality, style, and elegance after the great collapse. Looking back at the 2010’s I feel disgusted at just how disconnected and self absorbed we had become as a society. We all thought the world was going to end by life went on and we did recover. 

Traveling to and from work is now a 10 minute trip into the CBD on the Ziptrain for those living in the outer suburbs, not that this matters anymore because Gen Y have risen up the ranks and are now in middle and senior management. Everyday is a casual Friday, and employees work times are scheduled to stagnate based on personal preference, some starting at 6am right through until 12pm. Stagnating start times and placing a stronger emphasis on decentralization and working from home has seen the end of traffic jams on freeways and over crowdedness on public transport.  

Gone are the days where "work life balance" was just a stupid slogan thrown around by drones that still live in the 1970's. Work life balance in 2030 really is work life balance. “It’s amazing that we continued living the way that we did for so long, despite advancements in the IT and Telecommunications sector which saw us with the ability to operate the way we do today decades ago” Amanda Synnot, Business Development Advisor for the State Government said at the 2029 annual economic conference. “Since the great depression of 2008 - 2020, the last 10 years in terms of economic growth have been fantastic. Australians are experiencing a higher standard of living than ever before and it appears that we have reached a new paradigm and a permanently high plateau”


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## Glen48 (18 February 2012)

Panasonic makes 10% of the Worlds 42" Plasma TV and employ 15 people in their factory Robot's do the rest.
Plus of course the transports, shipping etc that should help the long term under employed.
 In 2035 the depression should be drawing to close.


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## Julia (18 February 2012)

Damien, a fascinating scenario which sounds entirely possible.
Thank you for describing the future you see.  Good to know imagination and insight are not actually dead.


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## lurker123 (25 February 2012)

3d printing becomes mainstream,
http://blog.ted.com/2012/01/23/a-primer-on-3d-printing-lisa-harouni-on-ted-com/

What effects this has is uncertain, whether massive unemployment due to massive job losses in manufacturing will result. 

Or whether this will result in massive intellectual property infringement as has occured with the internet.  From the pirating of music to the pirating of cars. Someone distributes the blue prints of a car online and people download the blue prints and the 3d printer they have at home prints every component required to make a car. They will then assemble the car with the help of the accompanying instructions to put it together which was also downloaded. This stage however will probably not be possible till 2040 assuming similar advancement to the PC industry which took off in the 1970s. 3d printing still requires more advancement in the use of different materials at the same time e.t.c.

Regardless of what results from 3d printing, most likely the status quo will be maintained and wealth will continue to transfer to the top and rising unemployment due to technology replacing people. The general population will continue to be fooled with the creation of more useless jobs and a few highly skilled jobs to replace the jobs displaced by technology however the creation of useless jobs cannot keep up with job losses. This results in more financial trickery such as already evident now, with the promotion of credit cards and inflating of house/land prices. Continued maintence of high government debt until system collapses and resets itself. System reset will result in more of the same. 

The system in place is designed for scarcity of human labour, technology has produced abundance of human labour. There are only 3 real needs: food, water and shelter. The other 2 requirements in the modern world being energy/electricity and resources. Technology has reached the point where there are not enough jobs in these areas, the result is that jobs need to be created in other areas. Manufacturing fullfilled that role, however even manufacturing couldn't stop technology. The result products designed to fail. Instead of creating products that last, they create products that fail right after the warranty expires. Globalization exacerbates the problem in developed countries resulting in stability through government and personal debt. 

What should have happened to counter the effect of technology was less working hours and hiring of more people due to lower working hours. Instead those at the top have successfully used the phenomenon called technology to transfer wealth up through globalization and other financial trickery. A fake world of endless growth was created. 

My prediction of the world in 2030, "more of the same" with the addition of possible major wars over resources and massive problems due to the limited resources of our planet only going to the top. Technology and population has eroded the value of human labour dramatically, real value now lies only in resources such as arable land, oil, e.t.c.


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## meric (29 February 2012)

Relevant short story: http://marshallbrain.com/manna1.htm

A bit too optimistic at the end but sort of aligns with my vision and partially explains my urge to save and invest today.


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## Glen48 (29 February 2012)

The biggest threat to mankind is the Virgin in the $300 hat telling all follower's not to use birth control, if this rule was changed and enforced strongly we would see a decline in births world wide and a good start to helping the world economy to crank up again. 
 Until that starts we have no hope of stopping depressions, war, famine etc.


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## konkon (10 June 2012)

There are lots of interesting blogs, books etc on the so called inevitability of the $US's downfall. I still don't see it happening but see the $US as an even more formidable phenomenon moving forward. Watching Bernanke's testimony to Congress (especially when it came to question time) last week, got me thinking Bernanke seems to be a lot more confident about the $US itself, when referring to it, although he did spell-out concerns about the US economy and Congress' lack of ingenuity regarding the real economy. 

The Fed has many mandates and perhaps some indirect ones like making sure the $US does not begin to destruct or implode, like many academics, bloggers etc claim will happen over time. I felt that Bernanke seemed a lot more content about not only the $US's current state, but about its future in global economic affairs and the like. Treasury yields are, at the time being, much lower than when either of the QEs were in effect, and this is mostly due to the flight to safety issue the past month or so. The Fed can probably see that the $US is a more secure 'asset' to most asset classes out there, given the current turmoil in the markets. This is an important step moving forward as it may very well underlie many of the future economic risks to be taken, moving forward from here.

While we all have to endure more and more debt to tackle preexisting debt, the $US appears to be a more attractive than what those who forecast its decline would want. This does not only include many academics, bloggers, but also perhaps a central bank or two (or more!) or some type of 'world bank' (not the World Bank!). I reckon they might, in the year 2030 for example, be a little disappointed to find that the $US's influence by then has remained the most sought after currency in the world, even given the sets of economic problems we may face from now to then; even with the unprecedented sets of debts that seem to be increasing on a regular basis and probably will continue to do so. 

So where does this leave the Federal Reserve, for example, in a couple of decades or so? Probably in the box seat. Having said this I would still rather prefer US defense to set up a new, independent, accountable and more transparent agency and take responsibility over what the current Federal Reserve system does overall. Reasons are spelled out in other threads and are broadly based on the overall prosperity of the United States, all its economic classes, its success moving forward as a nation, if it became a more inclusive system. This would not be a coup or the onset of a dictatorship (as this would not make any sense to any US defense organisation that would still need a dynamic capitalist model to continue to prosper too), but a better way of ensuring that the US (inclusively as a nation, not referring to multinationals here) has a more inclusively structured future with a pretty good guarantee that the strength of US treasuries on a global, macro picture can provide, moving forward. Part of what I'm saying here is that the US should have more _ownership_ (not in a literal sense) over the most formidable asset moving forward, the $US, and the fact that its not an inclusive system, may mean that the benefits that the $US can and will continue to provide may be skewered more to elite organisations than the middle classes, military etc within the USA. This proposal would be more of a structured response and would probably do away with the (retail) banks first, the masses second ethos that is crippling growth prospects in the real economy. US defense needs and would continue to need the middle classes, for example, to prosper as their revenue is solely responsible for the strength of the military etc. So it would be a way of ensuring that the middle class system is thriving and not going backwards, like many suggest.

This aside, the (even greater) power that the Federal Reserve might have over the next few decades may decide where things are headed. One might suggest 'its' US banks will enjoy greater prosperity moving forward, as the Fed is pretty much there to support these large US banks. But I see a problem arising here, as do many; there is no ultimate support for some of the risky business practices that these large banking institutions partake in. Take the complex and risky derivatives markets for example that can land them in hot water. It probably wouldn't take much for a large bank to make extreme losses 'gambling' with some of these instruments, that would affect their share price and trigger margin calls which would put more downward pressure on trading prices. Extreme kinds of gambling seems to be gaining momentum. It's clouded in complexities and misunderstandings and this would make measurements at any given time, less reliable.

As we're well aware, the backstop to any kind of problems above tends to be the masses. But what would more and more debt mean moving forward? There seems to be growing euphoria over bailouts but these bailouts are just adding to national debts. Some central banks seem to be immune from a potential crisis of piling on to national debts. Are we paving the way for a more powerful force of central banks, that have the capacity to reinvent themselves and adjust at times like these, and broaden their influence in global matters? I think so, and although this may have been the case for decades if not a century, this has to be a first on such a grand and global scale. The ability to control (not necessarily logistically) the creation and distribution of money by some central banks, may make them the most formidable force moving forward, but unlike the background stance they would have had previously, some central banks are beginning to enjoy a more offensive, foreground presence.

I think the Federal Reserve will continue to be the most powerful of central banks, even post 2030. US debt and most debts will continue to increase on a net scale, even with periods of prosperity. Not because of the growing trend in this area, as it seems logical to follow charts that suggest this, but because of the need by most to continue to take financial risks of all kinds, to aggressively speculate and inflate all types of markets, asset classes and the ongoing perpetual debt that's set-up in such a way to continue building on previous levels of debts, just to name three. Not so good for some of the retail banks too as they draw a considerable amount of their revenue from middle class prosperity. But this may be why we are continuing to see these and other organisations speculate heavily in ie derivative markets and the like. It doesn't seem like these practices will go away any time soon, and if this is their primary way of (trying to) make money, then this game will continue even post any potential catastrophe on ie the derivatives markets. They'll probably find newer ways of making or trying to make money.

to be continued ..


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## konkon (11 June 2012)

By 2030, the US will still have the most sophisticated (at nearly all levels) defense organisations on the planet, and its funding will have to come via indirect intrinsic strength (and *all* that's associated with it) of the $US and the strong presence of the Federal Reserve System on the global economic front. The Federal Reserve cannot go at it alone, and not only will it need the US consumer to find its footing, it will require additional strength of US defense. 

Any notion of a certain central bank (or more!) trying to undermine US defense in some capacity, by helping overburden US taxpayers to the point of not generating adequate funding for defense, will come to a halt, as there is little choice but for US defense to get back into the game (and recent cutbacks will end up being reversed) like it should, if for example the Federal Reserve needs to continue to reinforce its strength over time. The Federal Reserve System needs US defense, just like they both need a strong (not just in a price sense) $US. So any (non physical, of course!) battle, would be won by US defense. It will and has to come roaring back, as a sophisticated proactive phenomenon. The cut backs won't last for too long. 

The uptick in non $US swaps or bilateral transactions of non $US between certain countries, is an interesting development. Sure counties are free to trade the way they like, within given market parameters etc, but I can't help thinking that this is a move to do away with trading in $US, thus trying to lessen its influence, and reinforcing strength in other currencies, some of which may be seen as potential replacements of the $US reserve currency status over time. It may just make sense for them to trade in more localised currencies. But I think, as I'm sure do many, that this may be an attempt to undermine the strength in the $US.

It won't lessen the $US reinforcement as the reserve currency. Love it or hate it, the Federal Reserve System is one of the most powerful economic system on the planet. It's not just another central bank. Analogous to a casino, *the Federal Reserve would be the house and most prolific player!*

Politics is politics, and the US's enhanced involvement in the Asia-Pacific region, is welcoming news to me, although not for others I'm sure. I can almost feel the bitterness. 

On China: I admire the Chinese people, but not their system they happen to be 'governed' under, within China. That system as a whole is largely flawed at many levels, and it's one key reason why China will never be able to have a reserve currency, for example. Sure China is bound to be the most wealthiest nation, but it will continue to be hampered by intrinsic and unbreakable restrictions that won't enable it to progress to higher dynamic levels, that would be needed if it was to replace the USA as the dominant world economic player, and even establish a reserve currency. 

China's rule by force and threats against those that challenge their system are two key factors working against them, and a communist system is still a communist system no matter how much you want to dilute it with other dynamics. It is one of the few communist countries that isn't close to bankruptcy, which is a good thing, so it may defy this form of economic logic, as it continues to build wealth (disproportionately, of course).

*China's real dominance is over what it can control, and this is largely within the confines of its boundaries. It can and does get its way outside of China too, no doubt. But its internal restrictive economic practices does not transform well with freer external ones. This is going to be an increasing problem for China on at least two key fronts (and there are more than two); 1. the economic world is bound to get looser, more transparent with all forms of economic practices on multitudes of levels, and 2. the ruling communist (or call it what you like) elite (including the military etc) within China will not want to loosen their grip on all fronts, and the knots will continue to get tighter and tighter. *

Add to this that the Federal Reserve System is not going away any time soon, and China is up against a really formidable set of forces, mostly from its own doings, but also from the Federal Reserve System that will continue to consolidate its positionings on the world economic stage. 

The best bet for China is to really try and free up its internal systems so it can become a better net competitive player moving forward. Free up its internal markets and allow the markets to price all of the valuable things it has to offer to its own citizens and the rest of the world. Allow proper foreign business to take place within China, without all the paranoia etc. This would end up being a net positive move for China. Time is also against them as it gets harder for any reasonable change to take place, especially if the ruling elite become more adamant about their own positions. 

Having said all of this, China won't change these key dynamics that the ruling elite want and need. 

to be continued again


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## konkon (12 June 2012)

"China's real dominance is over what it can control, and this is largely within the confines of its boundaries. It can and does get its way outside of China too, no doubt. But its internal restrictive economic practices does not transform well with freer external ones. This is going to be an increasing problem for China on at least two key fronts (and there are more than two); 1. *the economic world is bound to get looser, more transparent with all forms of economic practices on multitudes of levels*, and 2. the ruling communist (or call it what you like) elite (including the military etc) within China will not want to loosen their grip on all fronts, and the knots will continue to get tighter and tighter." ..._from the previous post_

If the quote in bold becomes even more true, and that there's an increase in complex market practices involving sophisticated transactions, interactions, communications and the like, and China continues to price itself out (by its ongoing restrictive market practices etc and continuing to stick to quasi communist ways, which it will) from being able to dominate these enhanced, sophisticated economic activities, *and* China can't get heavily involved in and control the dominance of next generation global market technological activities (ie algorithmic trading platforms), *and* the Fed continues along its dominant path (which it will), then this would consolidate China's secondary or non primary positioning moving forward. China may become wealthier but it won't matter as much. It would be one the first times the wealthiest country on the planet wasn't the most dominant one.

There's more to be said about this point and others.


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## konkon (13 July 2012)

You can spin a whole heap to try and convince others (and maybe yourself!) about where you're at and where you're heading, but if those statistics, for example, are false, misrepresenting, don't factor in everything (or most things) that should be factored in, then the illusion you've created will probably come back and impact you in more ways than was originally designed to protect and benefit you. 

China can't be growing like they and others say or suggest they are. When was the last time (except for this period!) where you could trust the information that comes out of a, yes, communist and dictatorial system? Once again, nothing against the hard working and smart people of China. This has pretty much everything to do with China's inherently faulty communist (and worse) systems that will end up stifling true growth in a country that would otherwise have a great deal to offer; apart form being relied upon (by complacent and greedy westerners and the like) to provide the world with cheap labour and goods etc. There are exceptions, of course, but this is a big part of the China story that even the west has grown to love, except that now that manufacturing is pretty much dead in the water elsewhere, we're kind of looking to see which of our politicians to blame; not their fault!

We're looking at China through the capitalist kaleidoscope and believe that it can work. It won't in the long run. Some of the main reasons have been mentioned before and there's tons of information out there by economists too. But another one of the key reasons, overlooked by many I'd say, is because of every nation's experimentation with a fiat currency, and this will contribute to China's problems and may lead them in to unbelievably really high perpetual debts (disguised at first), that also won't be able to be curbed by their non capitalist systems. 

*China doesn't have, and won't have, a private sector or sets of them, that can pay down and generate wealth to counteract the perpetual public sector debts it is accumulating rapidly.* You, and I'm sure they are, can disguise this fundamental problem for some time and convince many that this isn't happening or won't happen, especially when you have isolated and secretive systems that can not be properly audited, investigated, assessed etc. 

One of the main problems with ie Greece, Spain etc is that they have a socialist system that has run up huge debts and now the focus will be on them to privatize areas that were once non profitable organizations. There are other problems too, sure, but these countries operated under the capitalist model, or were meant to, and this has become their end game for this period. *As these and other countries need to be less socialist, so will China, but this is not going to happen. And so, this is bound to have a really negative impact on China as a whole, especially under its current socialist/communist etc structure.* Don't forget to add the fiat currency dilemma to the mix. And it's not just China's fiat currency. It's the impact of some, most of the others added to the complexities of world wide dynamic economic model. 

Now a country like China, that has for now, dominance in manufacturing, the problems are bound to get worse, as revenue from this, perhaps their only link to a private sector model, won't be enough to stem the perpetual debts that will continue to escalate due to their over reliance on the public sector; any internal growth in China has to become an even more burdensome problem as revenue is highly geared to a similar but much worse socialist structure to the ones Greece, Spain have, but multiplied by a hell of a lot more, considering the needs of China's public systems moving forward.

It is possible that, in the longer term future, China will one day become a bankrupt nation but not only because of these problems. The fiat currency dilemma will impact China later on too and because it doesn't have a capitalist framework the problems will probably be worse in China, even on a per capita basis, than other countries that are experiencing or will experience problems with their own (and other!) fiat currencies. Yes, I think the complexities and dynamics of other fiat currencies is contributing to problems with one's own fiat currency. 

I can't flaw the core of the argument regarding fiat currencies. It's not just debts that have the economic world all messed up. The problem is with fiat currencies (including the usd, but this is a special case, and it is contributing to many of the other problems around the world; no need to 'leave' this reserve currency, like many have done or are trying to do, as this won't make a longer term positive difference - *from one fiat currency to the next!).*

*China won't be able to tackle its inevitable fiat currency problem head on*, and it won't be able to peg the yuan to gold, and establish a gold standard, for a sustainable period, even if it tried. It will continue to try and peg the yuan to the $US, but it's just piggy-backing another fiat currency. There are a lot of countries already trying this, and even range pegging their currencies to the $US. 

As for gold, it will continue to go higher over time, especially in many foreign currencies, and this is already happening, even though there are plenty of gold bears that are pessimistic of gold's future. It has, like the fiat guys suggest, a real future when *the printing of paper contracts like currencies cannot be grounded.* More and more, yuans, usds etc will have to be printed and distributed. And by default, many other currencies will have to be in even higher circulatory numbers, than would be desired; not that they're immune from the fiat system. *This is a complex future (and present) problem that will have everything thrown at it, but the end game is unavoidable, even with sets of different resets, that won't matter as much over time. *

more to add soon ...


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## Knobby22 (13 July 2012)

As the western world destroys itself with derivatives and lax control of the banks combined with democracies that appear to be becoming under the influence of the predatory rent seeking ruling class the way has opened up for China.

China is able to seize the initiative with its controlled economy. 

Though corruption is a continuing problem, the combination of free trade combined with industrialization reminiscent of Victorian age has allowed the Chinese to build up huge reserves of foreign capital.

If they retain their political will, I cannot see a failure occurring any time soon. Maybe a recession, but not a bust.


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## konkon (13 July 2012)

Knobby22 said:


> As the western world destroys itself with derivatives and lax control of the banks combined with democracies that appear to be becoming under the influence of the predatory rent seeking ruling class the way has opened up for China.
> 
> China is able to seize the initiative with its controlled economy.
> 
> ...




Yep, the derivatives problem is potentially very serious (JPM's attempt to 'punish' those responsible for their loss is lame, to me, considering most of these practices that go on are a form of gambling and not a bad investment position) problem and if the whole thing (not specific to JPM) comes unstuck, like many are predicting, it will take China along for the ride. To what extent? Who knows, but it may have unforeseen consequences that China may not be able to cope with. 

But what does China have control over given the potential (and over time, highly likely) pressures from some of the points made above. It can control a lot, sure, but at the end of the day, even if their citizens don't push for reforms etc and remain subservient to the coercive forces at work, their fate may be accelerated by all of those stifling socialist, fiat etc dynamics; *I still think that 40% of economic dynamics don't have to make much sense, at least for some time. But those relentless fiat, non capitalist economic forces would not apply here; it would fall into that 60% dynamic realm that you can't defeat, given the sets of circumstances your nation finds itself in. They are very real, and it's the sort of thing Greece, Spain etc find themselves in.* 

Foreign capital is fiat money especially if the @#$% hits the fan. In general the enormous diversification into so called safe-haven paper money (in the Euro Zone) is bizarre considering they're parking their original capital into other potential problematic areas; perhaps this is designed this way (incentives and the like). But then again it can still allow for quick get-aways into ie gold etc if necessary. 

A failure for China not any time soon, but it's on the cards I think, and they may be getting there a bit quicker than what many think.* I wouldn't want to be the last person to find out that something serious is happening in China, as this information is bound to lag (by some margin!) the reality of such an event.* Of course, this is my opinion, so if others want to believe the information that comes out of China, feel free to do so.


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## konkon (11 August 2012)

*Re: The (Economic) World in 2030 and Before That!*

These following criticisms are not directed to those working in banking in general, like a buddy of mine, who, like nearly all, is hard working, dedicated etc and just wants to make a positive difference. However ...

Nothing worse (well there is, but anyway) than walking up and seeing five or so heads of large banks around the world, on a television program, talking utter crap about what happened, what is happening and what most likely will happen later on. The worse part is, if they truly believe what they say, then I feel that they can't be truly leading the way they should be; I was about to say 'leading the world', but this is another key problem with the culture in the sort of places they all work in. For one, stop thinking that you are all part of some revered royal unit. *I do personally have admiration and respect for true Royals around the world,* but not for those bankers who seem to prance around like they're part of some elite of an elite. Just distribute the (fiat) money to, yes, real businesses and let them get on with things, and don't interfere in indirect ways that have and most likely will jeopardize the world's economies. This would also include any secretive ways of getting others and other networks to gatekeep and manipulate all kinds of factors and even ensure that the 'wrong' groups or people, to you, are peddling backwards.

The risks associated with mixing two main parts of banking, not to mention the risks undertaken that are to a large extent unprecedented, have been mentioned by many. My personal view has been that as long as the $US remains in tact, the larger leading banks can take a higher degree of risk than would otherwise be the case. But this can only, I'd say, be done to some extent. *There are real risks to the $US down the track if the recklessness, continued appetite for more debt (with no real realistic way of paying most of it back) and the historically low care-factor of ie rewarding poor market performances with higher valuations, more capital etc, continues down this path. *

I still am a $US bull for other reasons mentioned in previous posts. But if 'Wall Street's' appetite for what would historically (even in 2007-8) have been considered ludicrous, counter-productive, dangerous and the like, continues along this trend line, then it is conceivable that there would be cracks in the sustainable strength of the $US. Let's not forget there might (probably would) be a line-up of many exploiting this, if it were to happen.

Higher perpetual debts have become the norm and it looks as though this is something we're going to have to put up with for a long time coming. There are a multitude of possible end-game scenarios that one can read, and just yesterday there were Twitter feeds on reports that banks might need to prepare themselves for a possible collapse of certain financial markets later on; I don't know how they can escape this possible vacuum, myself, but that is another issue. Perhaps this is testimony to the sometimes bizarre economic logic used by those in this circle. 

If some of the negative points mentioned above about recklessness and the like continue, then I myself have a *possible* end-game scenario that differs a bit from some of the ones I've read before. There are certain things I'm looking at (I'll mention some later on) that may act as cues down the track. Around about this time in 2007, I was shocked to see the up-tick rule abandoned. Even though back then it made sense to many (on Wall Street), it didn't to me. I don't think the up-tick rule matters that much now, as there are easy ways around it, but it certainly did back then, when for example, there were plenty in the know that a) subprime was a serious problem, b) all types of markets were close to or at all time highs, c) packaged-up collateralized debts were incredibly risky etc. There were other problems too, like a zero-sum gain, but how could this be the case when so so many (a higher proportion than what might be allowed) were ahead! 

I won't be mentioning three key 'things' I'm looking at, and have been for some time. Things have a funny way of 'changing' on you once it is revealed (and even observed; schrodinger's cat, I think on the last point).


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## konkon (9 November 2012)

*Re: The (Economic) World in 2030; Hu Jintao's speech to China Party Congress 08.11.12*

I found the transitional speech in China quite interesting, and I'm going to add a few comments to some of the points raised in the speech.

The following comes from: http://in.reuters.com/article/2012/11/08/china-congress-hu-jintao-idINDEE8A701L20121108  followed by my comments after ie quotations.

_"We should enhance our capacity for exploiting marine resources, resolutely safeguard China's maritime rights and interests, and build China into a maritime power."_

Accompanied with this was reports on Twitter that China may arm its submarines with nukes. But on the quote above, China is seeking world domination through control of the seas, slowly at first, within its own region and it will seek to expand from there. It, I think, will try to dominate the skies too with its capable abilities using aircraft like stealth long range planes and fighters. This was not in the speech, but it's on the cards.

China will also try and dominate the electromagnetic world, via enhanced electronic communications and electromagnetics in general. Next generation type of stuff too. It's getting a head start on this, as opposed to the sea and sky initiatives, although the electromagnetic 'stuff' is crucial for enhanced developments in these fields too.

Why would China need to arm submarines when you have some of the nicest people on Earth, who are pleasant to ie do business with, within the South East Asia region. How comfortable are most of these nations, excluding perhaps Vietnam and Cambodia, with China's push for such technology? Oh, and how does this sit with us here in Australia? Just asking.

China will need to continue to dominate the export markets, like it has done so, for most of this to happen at a much speedier pace than what others might want. If China loses its export prowess its plans above will be quashed to a large extent. It has a growing population, in many respects, that will continue to use up a high percentage of its capital. It needs its export markets to service all of the above. Its eggs are in one basket on this one. I think it will need to get other nations to commit a lot more to ensure it doesn't lose its export powers; wheeling and dealing. 

_"We should act to meet the new requirements of China's national development and security strategies *and ensure that the armed forces fully carry out their historic mission in the new stage in the new century.*"_

Some key words here are 'new', 'armed forces', 'fully carry out', 'historic mission', 'new stage'. Well just about most of it! This one doesn't sit well with me at all. Are we too busy using imported products to pay attention to such a statement? Why did they (*the powerbrokers behind the carefully crafted speech*) need to include armed forces, for example, here. Where's the threat? 'Historic mission' ?? ehh? It's amazing how the media didn't bother with this at all. The use of the phrase 'armed forces' makes this much less ambiguous. Same with 'carry out their historic mission'. Am I missing something?

_"We will never allow any person or force to separate Taiwan from China by any means." _

Clearly. The person by any means is interesting. And force by any means is also interesting.

_"We should step up efforts to transform to a new growth model and work hard to improve the quality and efficiency of the economy"_

This is not something that they would openly admit to. Clearly, there are problems here, irrespective of what their 'statistics' indicate. Patches of their economy must be faultering. Large and established cities that are being serviced by the export industry and reinforced with wealth (models) from within, are being less affected, although there must be a fair bit of overcapitalisation and bubbles present.

_"We will continue to encourage domestic companies to accelerate their steps to make outbound investments."_

This is needed for their ambitions to dominate the world of finance into the future, and to help make the yuan a reserve currency later on. I often wonder why many including those from the US push for this too, given the structure of China's system that is oppressive and totalitarian. One should make a distinction between the great, intelligent and wonderful people of China and the systems that are enforced on them.

_"We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace, and expand the domestic market."_

Well, free up the labour markets and pretty much everything else, while you're at it. Oh, this may screw up your export prowess, especially with a slowing global economy.

_"We must never let words act in place of the law or (personal) power replace the law; nor will we allow the ignoring of the law for personal benefit."_

Absolute rubbish especially on the last bit.

_"If we fail to handle this issue [corruption] well, it could prove fatal to the Party, and even cause the collapse of the Party and the fall of the state."_

They'll get even more corrupt for many reasons; money to be taken for one, black markets of all kinds and shadow banking practices for two, a destabilizing (scientific!) socialist/communist system that is inherently flawed for three, mafia style matters to deal with for four, no real central oversight across the whole country for five .. .. Most of these get rooted into the very system that's meant to be clean/er to begin with. 

There are plenty that want the collapse of the party and the fall of the state in China, so they are giving them excuses to be more corrupt, cash up wherever possible and hope to get a head start if the system gets changed later on. Wonder if this was going on in the Soviet Union prior to its collapse? _forgot to add the exclamation mark here_

Combine corruption with some other key elements that can bring down this system and you have a real problem. Try and oversee this whole process from as many angles to help combat ie corruption, and you risk slowing China's mechanisms for real growth and putting a dent into other (future) initiatives. Communism just doesn't work. Their leaders must have some idea of this, but they and co must be making a ton of money out of this whole process, system etc.

more soon. bit tired


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