First, the fiat age has enabled economies large and small, countries near and far, to paper over their problems with cash. . . .
Second, everyone—and I mean everyone—is doing it. The only systems in existence today that are not expanding their money supply are those that have consciously chosen to forego economic growth in favor of price stability. . . .
But it is China, where monetary expansion is the standard operating procedure for everything, that has truly broken the bank. Since 2007—the year everyone started talking about the Chinese taking over the planet—the supply of yuan has increased by more than eight hundred percent. . . .The Chinese economy, even by the boasts of the most ultranationalist of Chinese, is still significantly smaller than the American economy, and yet the Chinese money supply has been larger than America's for a decade—often twice as big. So of course the yuan is a store of value for no one. Capital flight out of China to the U. S. dollar network regularly tops $1 trillion annually.
China's financial system, paired with its terminal demographics, condemns it to not being consumption-led, or even export-led, but lending-led. That makes China vulnerable to any development anywhere in the world that might impinge raw material supply, energy supply, or export routes—developments Beijing cannot influence, much less control. China has been on this path to destruction for nearly a half century. This is not the sort of iceberg-on-the-horizon disaster that any tightly controlled, forward-thinking, competently led government should fall prey to.
-Peter Zeihan, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization
Posts
