The next 10-15 years will
engender the next cycle of big change. The pressure of the 4 aspects below have
been playing at the seams and they will come to a head increasingly in the next
few years and the world political order will need to manage or will be forced
to bear the consequences:
- Rapidity of scientific change;
- Population increase and aging;
- Excessive global leverage and imbalance;
- Climate change.
There is enormous bureaucracy
built around governance and sophistication in economic supply-chains now. But
the uncertainty that looms ahead is unprecedented. The post-ideology world that
we had moved into once the Soviet empire fell is now taking a turn larger creating
a mutation that we shall only witness and not fully control.
Science and the beauty of it all
Physics has been all too
important in modern man’s life and I cannot even emphasize how much. And, in
this age of wonderful discovery the most important has been the Second Law of
Thermodynamics.
It’s the Second Law of Thermodynamics: Sooner or later everything turns
to shit. That’s my phrasing, not the Encyclopedia Britannica. - Sally, In Woody
Allen’s Husbands And Wives (1992)
Did you know? What are they
surfing on their ____? It’s a pad, it’s a phone, It’s a laptop, It’s a TV…
Today approximately thirty corporations control 90 percent of world
Internet traffic; Google alone manages an estimated 20 percent of the
Internet’s content through websites, storage, and enterprise apps. ISPs, the
current backbone of the Internet, prefer self-management and self-regulation to
heavy state involvement. Furthermore, the publicly accessible Web is but a
small fraction of the total Internet. The Dark Web of anonymous Torencrypted
networks and Bitcoin transactions, the Deep Web of unindexed pages, corporate
intranets, and other publicly unsearchable databases make up the vast majority
of the Internet’s content.
For those wanting to think deeper in the new year!!!
Schrödinger's cat is a thought experiment, sometimes described as a
paradox, devised by Austrian physicist Erwin Schrödinger in 1935. A cat is
placed in a steel box along with a Geiger counter, a vial of poison, a hammer,
and a radioactive substance. When the radioactive substance decays, the Geiger
detects it and triggers the hammer to release the poison, which subsequently
kills the cat. The radioactive decay is a random process, and there is no way
to predict when it will happen. Physicists say the atom exists in a state known
as a superposition—both decayed and not decayed at the same time. The scenario
presents a cat that may be simultaneously both alive and dead, a state known as
a quantum superposition, as a result of being linked to a random subatomic event
that may or may not occur - Erwin Schrödinger, is famed for a number of
important contributions to physics, especially the Schrödinger equation, for
which he received the Nobel Prize in Physics in 1933
Excesses of the past
Money, Money everywhere not a
drop to Recap. Even with the unprecedented liquidity infusions by ECB the
banking crises will come to head…leave alone high levels of unemployment and
immigration issues
Goldman Sachs estimates bail-out of Monte Dei Paschi will need Eur38
billion. And, this is just one bank. Italians have raised Eur20 billion for the
bank bailout fund. Add, Eur 200 billion Italian investors have invested in
junior (sub-debt) of these banks.
U2 remember - Unprecedented and Unsustainable!!
China's share of
global consumption - Aluminium: 54%, Copper: 48%, Zinc: 46%, Steel: 45%, Rice:
30%, Gold: 23%, Wheat: 17%, Oil: 12%, Gas: 6%
We are sure!!
Man has for too long forsaken
ability to accept change for rationality and certainty. Especially, the
diplomatic community!! A beam called “Trump” just struck them.
“Western man has tried for too many centuries to fool himself that he
lives in a rational world. No. There's a story about a man who, while walking
along the street, was almost hit on the head and killed by an enormous falling
beam. This was his moment of realization that he did not live in a rational
world but a world in which men's lives can be cut off by a random blow on the
head, and the discovery shook him so deeply that he was impelled to leave his
wife and children, who were the major part of his old, rational world. My own
response to the wild unpredictability of the universe has been to write
stories, to play the piano, to read, listen to music, look at paintings - not
that the world may become explainable and reasonable but that I may rejoice in
the freedom which unaccountability gives us.” - Madeleine L'Engle, A Circle of
Quiet
Beware asking for a revolution to
achieve a state of perfection. If something scares all autocratic regimes is an
overthrow where no counter balance exists. And, they have seen the Russians
after 1991 and the Arab Spring…
“If mankind were to resolve to agree in no institution of government
until every part of it had been adjusted to the most exact standard of
perfection, society would soon become a general scene of anarchy and the world
a desert.” - Hamilton
Economics and supply-chains
With the world population and
productivity rising since World War II and fiat currency providing unlimited
power to central banks to expand the monetary base, Keynes postulates of
government intervention to smoothen business cycle were embraced and worked
until 2008…the limitation of debt became clear but not how to turn the clock
back…Of course people brushed up on Hyman Minsky’s works. He had talked about
the accumulation of debt by the private sector in causing a crisis, problem of
insolvent debt and the Knightian uncertainty (risk that is immeasurable and
incalculable).
From World War II onward, fixed capital formation rose like a
west-to-east wave from under 20 percent of GDP to over 30 percent. Germany’s
1950s Wirtschaftswunder (economic miracle), Japan’s 1960s 9 percent growth
rates, the “Asian Tigers” of the 1970s and 1980s (South Korea, Taiwan,
Singapore, and Hong Kong), and then China starting in the 1990s, where it
topped 40 percent of GDP and powered sustained growth of close to 10 percent
for the past three decades. China embraced Keynes like nobody’s business. - Dr
Parag Khanna
God forbid if a comet from space
were to land in Almeria!!
The two hundred square kilometers of greenhouses in Almería in southern
Spain, where up to half of Europe’s annual demand for fresh fruits and
vegetables is grown, is unmistakable, especially as sunlight reflects off their
plastic roofs.
We are literally moving mountains...
Maersk Triple-E that sets sail from Shanghai bound for Rotterdam can carry
its full capacity of 36,000 Nissan cars, 180 million Apple iPads, 110 million
pairs of Nike shoes—or some combination…
Mankind - Beauty and the beast
Maybe not the next 30-40 years
but surely thereafter at a greater pace large scale migration can become a
reality…unlike that we have seen in known history. Welcome to the age of
climate change…
In the current century, closer to the equator became more than those
towards the cold poles. But soon may require mass migrations, as equator and
tropical population is hit by increasing temperatures, drought, and rising sea
levels. Canada and Russia could become massive agricultural powerhouses producing
most of the subsistence crops needing people to help their agriculture and feed
the global population.
Mankind is capable of great good
but at times gates of hell can be opened…
On 28 September 1918, in preparation for the final push through the
German defensive line, British artillery unleashed 1 million shells in a
single, continuous day-long barrage –11 shells per second for 24 hours.
As Lloyd Blankfein, chairman of Goldman Sachs, pointed out in 2009: ‘In
January 2008, there were 12 triple A-rated companies in the world. At the same
time, there were 64,000 structured finance instruments … rated triple A.’ In
short, what the market demanded the innovative financial sector duly supplied.
These young people, they just
don’t learn…
Four-fifths of all civil wars since 1970 have occurred in countries
with a median age below twenty-five, precisely the Arab world’s demographic
profile.
Wheels of change turn slowly but
by the time change comes the great resource of energy and climate change may
push things on the edge in the Middle-East...
How dreadful are the curses which Mohammedanism lays on its votaries!
Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in
a dog, there is this fearful fatalistic apathy. The effects are apparent in
many countries. Improvident habits, slovenly systems of agriculture, sluggish
methods of commerce, and insecurity of property exist wherever the followers of
the Prophet rule or live. A degraded sensualism deprives this life of its grace
and refinement; the next of its dignity and sanctity. The fact that in
Mohammedan law every woman must belong to some man as his absolute property –
either as a child, a wife, or a concubine – must delay the final extinction of
slavery until the faith of Islam has ceased to be a great power among men.
Thousands become the brave and loyal soldiers of the faith: all know how to die
but the influence of the religion paralyses the social development of those who
follow it. No stronger retrograde force exists in the world. Far from being
moribund, Mohammedanism is a militant and proselytizing faith. It has already
spread throughout Central Africa, raising fearless warriors at every step; and
were it not that Christianity is sheltered in the strong arms of science, the
science against which it had vainly struggled, the civilisation of modern
Europe might fall, as fell the civilisation of ancient Rome. - Winston S.
Churchill, The River War
Feeling Futuristic
Some people can just think too
far ahead. Senor Cortés forestalled some of the great strategists of our time
(Mackinder, Mahan or Spykman) and Europeans fought over control of the
Mediterranean and the road to the Indian Ocean, then Americans over the Caribbean
we still fight over the issue…South China Sea!!
Spanish conquistador Hernán Cortés made an equally extravagant claim in
1524: “He who controls the passage between the oceans may consider himself
master of the world.”
The American’s ignored a golden
rule after 9/11, now as America provokes hope better sense may prevail on
China.
Never start a land war in Asia but never get involved in a trade war
with a current account surplus.
_________________________
Hope that this random walk
conjures the picture of decade of great change that we are about to step into…
And, finally the new year!
I hope that in this year to come, you make mistakes. Because if you are
making mistakes, then you are making new things, trying new things, learning,
living, pushing yourself, changing yourself, changing your world. You're doing
things you've never done before, and more importantly, you're doing something -
Neil Gaiman
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