Excerpted from 2011 Thesis
Paper: Beggar-thy-Neighbor at Tipping
Points
The conclusions of our "2011
Thesis - Beggar-thy-Neighbor" was that the world is on a glide path
towards a global Fiat Currency Failure and the emergence of a New World
Order. We are unclear whether it is planned or happenstance, but what the
regularly conducted abstraction mapping process clearly indicates is that it
is presently a high probability outcome.
The paper (which will be
made available to non subscribers March 11th, 2011- sign-up)
uses the Process of Abstraction to avoid the media noise, abstract the facts,
synthesis key macro drivers and then arrive at the highest probability
outcomes.
In the recent article "2011
Tipping Points" we laid out the 37 major Tipping Points we are
presently tracking. These Tipping Points are show on the left hand side
of the two charts below, which are the basis upon which our ongoing analysis
process is conducted. These highly simplified representations of the process
gives the reader a graphical perspective on what leads us to our conclusions.
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I - ERA OF CONFLICT &
TENSION
Our process has been signaling
an era of conflict and tension was ahead for over 18 months. Our most
recent analysis is showing this theme becoming much more pronounced and
possibly accelerating.
DRIVER I: Debt Saturation
The Tipping Points of:
1-Sovereign Debt - PIIGS, 2- EU Banking Crisis, 3, Risk Reversal, 4-US State
& Local Government, 6-Rising Inflation Pressures and Interest Rates,
8-Chronic Unemployment, 11-Residential Real Estate-Phase II, 12-Commercial
Real Estate, 13-Public Policy Miscues (i.e. flawed fiscal & budget
policy), 14- Oil Price Pressures, 15-Bond Bubble, 16 Pension-Entitlement
Crisis and many more of our 37 Tipping Points are fundamentally about debt
and credit. They are related in some fashion to the inability to service this
debt and the problems which that incurs.
DRIVER II: Social Unrest
The Tipping Points of: 5-Food
Price Pressures, 8-Chronic Unemployment, 6-Rising Interest Pressures and
Interest Rates, 16-Pension-Entitlement Crisis 19-Credit Contraction II are
just a few of the Tipping Points that are creating the underpinnings for the
beginnings of Social Unrest in many countries and regions around the world.
CATALYST I: The combination of Debt Saturation
and Social Unrest are the catalyst for:
THEME I: Currency Wars & Political
Policies of 'Beggar-thy-Neighbor'
- Competitive
Currency Devaluation
- Protectionism,
Tariffs and Capital Controls
THEME II: Banking & Credit Crisis II
- Toxic assets
& massive hidden 'underwater' Residential and Commercial Real Estate
loans.
- Looming
government debt 'haircuts' and possible defaults (Iceland, Ireland?)
DRIVER III: Geo-Political Tensions
The Tipping Points of:
10-Geo-Political Events (such as presently seen throughout North Africa and
the Middle East), 30-North and South Korea, 35-Iran Nuclear Ambitions,
33-Terrorist Threats and operating factions, all are creating Geo-Political
Tensions. They appear to be broadening and touching all regions to various
degrees.
DRIVER IV: Global Economic Income and Growth
Imbalances
The Tipping Points such as:
31-US Fiscal, Trade & Account Imbalances, 24-Shrinking Revenue Growth
Rates, 25-Global Output Gap, 17-Central and Eastern Europe, 9-China Bubble
and 29-Slowing Retail & Consumer Sales are just some of the Tipping
Points within Driver IV. The seriousness of global income and growth
imbalances is continuously stressed by all economists as a central dilemma
that must be addressed.
CATALYST II: The Social Unrest, Geo-Political
Tensions and Global Economic & Income Imbalances drivers are the
tinderbox for:
THEME III: A Collapsing Western (G7) Social Net
- EU countries
attempting to strip entitlements as part of 'austerity' policies.
- US State /
Local government crisis over public union benefits versus Private sector
compensation.
THEME IV: West-to-East Power Shift
- We are
already seeing a well defined shift from the US to Asia.
- Manufacturing
and Supply Chain migrations is accelerating to Financial, Banking and
R&D.
RESULT:
A FIAT CURRENCY FAILURE
There are many indications
that we are well along towards an evolving Fiat Currency Failure..
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II - NEW WEALTH CREATION
& VALUE PROPOSITION
DRIVER V: Regionalization
The Tipping Points of: 1-
Sovereign Debt-PIIGS, 2- EU Banking Crisis, 9-China Bubble, 10-Geo-Politcal
Events (Middle East and North Africa), 12-Central & Eastern Europe,
20-Japan Debt Deflation, 27-US Reserve Currency and 26-US Dollar Weakness are
indicators of increasing Regionalization around the world. Sovereign States
are more and more becoming trading blocks for competitive advantage and
economic survival.
DRIVER VI: Resource Shortages
The Tipping Points of: 5-Food
Shortages, 14-Oil Pressures, 6-Rising Inflation Pressures coupled with an
explosion in global Commodity prices is an indication of shortages. The
world's population is growing rapidly along with elevated standards of living
in the Emerging Markets. These are putting serious strains on global
resources
DRIVER VII: Emerging Markets
The Tipping Points of: 31-US
Fiscal, Trade and Account Balances, 26-US Dollar fears, the sustainability of
27- US Reserve Currency and other imbalances are driving the emergence of new
players until the world stage. What was only recently the 'G5' center of
power, is now the G20. The twice yearly G20 meeting now takes center stage in
global issues.
CATALYST III: Regionalization, Resources Shortages
and Emerging Markets
THEME V: Global Corporatocracy
- Mercantilist
driven Export Policies & Strategies which place corporate brands and
jobs creation in positions of control and extensive power.
- Globalization
through Privatization, Free Trade, the World Trade Organization are now
being realized.
CATALYST IV: Resource Shortages and Emerging
Markets
Resources and Emerging Markets
leads to Theme VI.
THEME VI: Shifting Value Creation
- It's about
Jobs, Jobs, Jobs Creation
- Knowledge
Based societies versus resource centric.
- National
Competitive Advantage Strategies,
- Critical
Sovereign Dependencies,
If we couple THEME: V -
Global Corporatocracy withTHEME: III - Collapsing Western
Social Net and THEME IV - West to East Power Shift we have the
following directional result.
RESULT:
AN EMERGING NEW WORLD
ORDER
Either by design & plan or
just happenstance a new world order is on the horizon.
All of the above lead to an
overall thesis of CHANGE in 2011 and 2012.
We delve into all the of the
above in detail in our 2011 THESIS: BEGGAR-THY-NEIGHBOR.
sign-up for
your free copy to be released to Non-Subscribers March 11, 2011.
"I care not who Rules
but who controls the Money.
The REAL Power lies with
who controls the Money!"
Nathaniel Rothschild
"The Banker wins in the Era of Corporatocracy"
Sign Up for the free 2011
Thesis Paper: Beggar-thy-Neighbor at Tipping
Points.
