A transition from public to private is taking place… is why the future will be very different this time around. The confidence in governments is fading away for a number of good reasons, and it will change the world we live in.
The bond market will go through painful convulsions, which is a big deal.
China is in a free fall, which translates into “take your money and run.” Middle East is in transition, to put it mildly, and then there are some interesting things about Europe. You can never underestimate the Old World, when it comes to making a mess of things.
Northern Europe is flat and well rivered and so countries there can achieve efficiencies and economies of scale. Southern Europe is rugged and lacks rivers and so cannot. The bottom line is that Southern Europe will never be able to compete with Northern Europe economically, just as Northern Europe cannot hope to compete with Southern Europe when it comes to sun, fun, food and flair. (France has a foot in both worlds, which is part of what makes the French so cool.)
The bottom line is that the European union can’t last and the Euro can not either.
However, the thing to understand is that we’re not heading into war, because there is no business in it - nobody wants to occupy the other. All the talks about world war III are nonsense, there are better ways to make money and all the players know it.
But, there are huge differences how the world works from place to place.
In Europe the welfare state is in essence a huge shock absorber, but they’re paying for it with lower living standards.
Or, as in China, the command and control state provides the same function – as long as you play along, you’re left alone.
Once you get to United States, it’s a totally different growth model – the idea here is to optimize the run with no buffers. We will accept short, sharp shock, which will allow the economy to come back without massive amounts of new taxation or state intervention. It is a more difficult method, but it tends to work.
It’s an American thing.
Russia is quiet, and this is not good, the media are not picking up on what’s going on there.
And you know, I have a problem with that – in the communist Eastern Europe years ago, the TV had specialists for each region who would come on and explain the settings as things unfolded. There is nothing like this today, we’ve lost the depth of thinking in understanding the world.
On a lighter note, I rode far North the other day and I was talking to a beautiful gypsy woman while my motorcycle was cooling down in front of a restaurant.
She started the conversation.
“Never take advice from someone wearing a suit and tie,” she said.
“How do you know I am even around people like this?”
She just looked at me.
I put my helmet down and unzipped my jacket. “Now you’re getting into my head, which is a mistake, my head is not a place you want to get into.”
“You know the boss, no?” she ignored what I said.
“I do, and she talks in her sleep.”
She laughed quietly. "Your wife."
“I hope that life will treat you kind,” she said.
“What will happen when they call for you?” she asked sitting comfortably in her light flowing brown dress, the wind moving it as she spoke.
I understood right away what she was saying.
"I never get into a situation without knowing the way out."
She looked at me again.
“They can leave a message at the beep.”
Tom Kubiak is the author of The Traveler