Posted on 02/22/2010 7:05:34 AM PST by blam
THE NEXT DECADE: China Collapse, Global Labor Shortages, New American Dominance
Lawrence Delevingne
Jan. 22, 2010, 9:07 AM
What will the next decade bring for the world?
STRATFOR has the answers. In a Decade Forecast released yesterday, the global intelligence company predicts Chinese economic collapse, game-changing global labor shortages, and continued American dominance because of a gradual retreat from international engagement. Welcome to 2010.
We spoke with Peter Zeihan, Vice President of Strategic Intelligence, about STRATFOR's predictions, of which he was an author. Below are edited excerpts from our conversation.
TBI: What are the broad trends that Stratfor sees shaping the world in the next decade?
Zeihan: Probably one of the biggest breaks that Stratfor has with conventional wisdom is that most of the world is convinced that the United States is a power in terminal decline. In fact we see the United States withdrawing from its two wars, regardless of whether or not they've ended, and returning to a more balanced attention span in dealing with the rest of the world.
Most of the rest of the world will view that as an American retreat from prominence and a sign that the U.S. is in decline once again. But really when you're a naval power and a merchant power, being out of the Middle East is increasing greatly your power to act and you willingness to act. So we see it as a very American-centric decade moving forward.
Which predictions are most surprising?
Aside from the United States not going anywhere, I would say we expect the economic collapse of China in this coming decade.
(Excerpt) Read more at businessinsider.com ...
This guy smokes crack before he makes his predictions?
Stratfor used to get foreign analysis precidesly correct...up until they blew the 1999 war on Serbia.
They’ve never been the same, since.
I’ve heard this guy on the Michael Medved show and he was very interesting. Claims that Turkey and Poland will become dominant economic and military powers in Europe.
And it is becoming increasingly clear that countries who have screwed with their demographics by having a liberal abortion policy are about to pay the price of an aging workforce (although towards the end he started to turn that into an agrument for amnesty here)
Well, the first problem with Stratfor’s “analysis” is that they don’t recognize that the world has global over-production already.
Too many factories. Too many shopping malls. Too many office towers. Too many ships.
Over-capacity. Factories are running at 40% of capacity; they could double production overnight without hiring a single new employee.
Sure, 77 Million Baby Boomers are hitting retirement age, but they are mostly in paper-pushing managerial roles that are being obsoleted by technology.
Ask any 62 year old “manager” about their new job search after they got “retired” or downsized and they’ll tell you that no one is hiring them.
That’s not a labor shortage, that’s a labor surplus.
It got them headlines so I guess it served its purpose. And I agree with you.
Interesting predictions.
.
So that also includes USA except for the pro-life Latino immigrants?
We are importing poverty with 1.2 million legal immigrants a year, most of whom are poor and uneducated. We are going to add 130 million more people to our population over the next 40 years, 75% due to immigration. 53% of all immigrants use at least one major social welfare program. We are the ones on the brink of economic collapse with our ballooning debt and out of control entitlement programs.
Agreed on Serbia ... but perhaps they were never all that good in the first place. Their stock in trade seems to be worst-case scenarios, perhaps aimed at the better-off members of the "prepare for the apocalypse" crowd....
It explains: "First, China’s current economic model is not sustainable. That model favors employment over all other concerns, and can only be maintained by running on thin margins."
"Second, the Chinese model is only possible so long as Western populations continue to consume Chinese goods in increasing volumes. European demographics alone will make that impossible in the next decade."
"Third, the Chinese model requires cheap labor as well as cheap capital to produce cheap goods. The bottom has fallen out of the Chinese birthrate; by 2020 the average Chinese will be nearly as old as the average American, but will have achieved nowhere near the level of education to add as much value. The result will be a labor shortage in both qualitative and quantitative terms."
"Finally, internal tensions will break the current system. More than 1 billion Chinese live in households whose income is below $2,000 a year (with 600 million below $1,000 a year). The government knows this and is trying to shift resources to the vast interior comprising the bulk of China. But this region is so populous and so poor — and so vulnerable to minor shifts in China’s economic fortunes — that China simply lacks the resources to cope."
I would simply add that their system of communism, which is slowly coming apart due to economic freedom, will cause severe dislocation. Remember that when the Soviet Union came apart, the production system was insufficient to meet the demand for goods and services those newly free people wanted. The result was hyper inflation. This could/will happen in China as well.
I agree that China’s economy is going to fall apart. They are trying mightily to stave it off, buying lots of gold and seemingly every rare-earth mine that their $1 trillion + of foreign reserves will support, but it won’t be enough. The entire economy is predicated on exports. Given that their 3 biggest markets (Japan, Europe and the US) are in rather dire economic straights, China’s exports not only can’t grow, but they will shrink. China has tremendous overcapacity - they build factories because doing so keeps people employed for a time - heck, they even have an entire city that is empty.
Where we come out smelling like a rose is beyond me. Maybe just based on the theory, so eloquently stated by Karl Denninger, that “we’re f’d, but the rest of the world has been gang-raped and left for dead by the side of the road.” Or, more classically, “in the land of the blind, the one-eyed is king.” It surely isn’t because we are withdrawing from 2 rather small wars, because our structural deficit has little to do with those wars. They aggravated it, to be sure, but they didn’t cause it, and bringing troops home will only improve our economic situation a little bit (and don’t worry, Obama will find some way to spend 5 times as much as we save on these wars).
Sorry, but Stratfor is wrong - we are screwed, and screwed badly. That China will be worse off, perhaps even have a revolution, is cold comfort to the people of this country that are out of a job and/or buried in debt.
Stratfor has been posted on FR for over a decade. Stratfor is a fantasy joke.
http://www.tabletmag.com/news-and-politics/25811/mcstrategy/
... Welcome to Stratfor, the brainchild of George Friedman, a Texas academic and sometime U.S. government consultant, who became an intelligence entrepreneur and runs what the press routinely calls a private CIA out of a compound in Texas. In a crowded market where The New York Times can’t successfully charge for premium content, Friedman’s thriving business targets a key market niche: corporate types with geopolitical exposure who are too busy or too ill-informed to use Google.
New Polls Show Massive Resentment Brewing Towards The Chinese Uber-Rich
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The Chinese Government’s response will be
....BLAM BLAM BLAM
Thanks hennie pennie.
My thoughts too and I see no more bubbles coming that will hype employment
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