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GLOBAL FUTURE ANALYSIS


HEADWINDS | STATE DEFICITS


As economies slow down and go in decline governments starts to suffer. Caught by the grow religion they all spend to the max (it was so 'bad' so they must spend a lot to make things 'better'). All governments will face at least four major developments. 1) they will run out of money (due less taxation in smaller economies and increasing cost of their debts by high interest rates), 2) they run out of importance (due the Energy Crisis local will become much more important than national as distances will shorten severely), 3) they will receive a lot of internal resistance/turbulence (due the Credit Crisis, the Energy Crisis, the Water Crisis and the 5 attached/consequential crises that follow these 3 initial crises), 4) they will be face a collapse of their currency. China faces the same problems as the US and the EU and will get major writedowns on their US financial assets. The federal structure of Chinese government faces the same destiny as the federal structures in the US, the EU and probability also India: when central governments just become a heavy cost burden and give nothing or too little in return their future is very much uncertain. Jim Rogers is wrong about China: China is not the winner of the 21st century. Jim Rogers sees the basic developments right (Credit Crisis, Energy Crisis and Water Crisis), but doesn't draw the consequences from these three. Saying that oil will become priceless, but still buying airlines and airports. Contrary investment behaviour and advice. If one nation will be hit by the Credit Crisis, the Energy Crisis and the Water Crisis, it will be China. Federal States has not really a future. Local will be leading. National government will service local governments the way the local governments demands and local governments will pay as much/little as they like for this services. Supra national governmental bodies are dinosaurs in times of an Energy Crisis: they will have no function at all and nobody will be willing to pay their budgets anymore.


Author: Gijs Graafland


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