The end of eras
What if?Thomas L. Friedman, NYT, JAN. 20, 2016
ZURICH — Just get me talking about the world today and I can pretty well ruin any dinner party. I don’t mean to, but I find it hard not to look around and wonder whether the recent turmoil in international markets isn’t just the product of tremors but rather of seismic shifts in the foundational pillars of the global system, with highly unpredictable consequences.
What if a bunch of eras are ending all at once?
What if we’re at the end of the 30-plus-year era of high growth in China, and therefore China’s ability to fuel global growth through its imports, exports and purchases of commodities will be much less frothy and reliable in the future?
“Now that this debt bubble is unwinding, growth in China is going offline,” Michael Pento, president of Pento Portfolio Strategies, wrote on CNBC.com last week. “The renminbi’s falling value, cascading Shanghai equity prices (down 40 percent since June 2014) and plummeting rail freight volumes (down 10.5 percent year over year) all clearly illustrate that China is not growing at the promulgated 7 percent, but rather isn’t growing at all. The problem is that China accounted for 34 percent of global growth, and the nation’s multiplier effect on emerging markets takes that number to over 50 percent.”