Empire Rip

Empire Rip

Another one of the 5Es is, “the influence of the usa Empire is peaking: What is next?"

There is a change in the global power base underway and with this change in the USA are feelings of doom and gloom, malaise, and a sense of loss with a lower standard of living.  A lot of the churn and turmoil in the marketplace is associated with this change.  It is this adjustment to a new global reality that is the basis for the peaking of the influence of the usa Empire.

 

For background information, you can go to my blog for a summary and a pointer to my recent article “Consider using these 5 E-valuation factors to avoid a financial rip tide: learn to thrive, not just survive.”

 

Here is an excerpt straight from my previous article “3 – the (USA) Empire is peaking out.  The cost of having so many troops in so many parts of the globe and the cost of increasing the size and services of the government at home in the United States, is a key part of causing the country to go broke”.

 

In that spirit, I am going to use this article to briefly introduce some of the factors that illustrate this peaking of the usa Empire, suggest some areas of focus to prevent parochialism, and ways to thrive economically as the emerging markets embrace trade and technology.

 

For a minute, let’s examine the 3 great power shifts in modern history …

 

1st is the rise of the western world around the 15th century that produced the world as we know it with science and technology, commerce and capitalism, and the agricultural and industrial revolutions.

 

The 2nd shift took place 400 years later with the rise of the USA as it became the most powerful nation in the world with the past 20 years in a role as the only superpower … essentially getting its way in all areas and largely unchallenged.

 

The next power shift is the 3rd in modern history and it is currently underway as the global economy has accelerated the “rise of the rest” based on an unprecedented international climate of peace and prosperity.

 

Yes there is terrorism and there are rogue states but it is the most peaceful time on earth, relatively speaking.

 

However, it is an unsettling prospect for Americans as the USA is not leading the charge.

 

Here are some economic achievements of the past decade:

-          the world’s largest building is in Taipei and soon it will be in Dubai;

-          the world’s largest publicly traded company is in Taipei;

-          the world’s biggest refinery is being constructed in India;

-          the world’s largest airplane is built in Europe;

-          the world’s largest investment is in Abu Dhabi;

-          the world’s biggest movie industry is in Bollywood (India);

-          the world’s largest Ferris wheel is in Singapore; and

-          the world’s largest casino is in Macao.

 

And, none of the 25 companies likely to be the world’s next great multinationals, are from the USA.

 

Only ten years ago, the USA would have easily topped almost every one of these categories … why isn’t the USA leading the charge?

 

Look around at some of the difficulties being faced by the USA at the moment:

-          military quagmires in Iraq and Afghanistan;

-          Iran’s nuclear aspirations;

-          deadlocked peace process between Israel and Palestine;

-          stalled negotiations on liberalization of global trade (referred to as the Doha Round);

-          lack of progress on efforts to reach an international agreement on climate change; and

-          most recently the global financial imbalances between the USA and China.

 

Many are asking, “why is the USA unable to call the shots?

 

The US military power is overstretched with respect to activities in the Greater Middle East and there is a dramatic loss of American financial resources as a result of the recent financial crisis.

 

Combined, these have produced a long-term transformation in the balance of power both in the Middle East and worldwide that has significantly eroded Washington’s geo-strategic and geo-economic clout.

 

Will the leaders in Washington recognize this change and readjust to the new global reality before continued military and financial strains create conditions of haphazard muddling and eventual liquidation of the usa Empire?

 

Why does it feel so bad … partly because of the 24 hour news cycle with BREAKING NEWS and “storm of the decade” headlines bringing instant news and images from around the world.  Because the information revolution is so new, we have to learn how to put it all into context.

 

A ray of hope comes from America’s policies on immigration and education.  If America keeps a focus on a First Class education system, encourages foreign students and immigrants to attend college in the USA and stay to work, they will create economic opportunity and a new burst of American productivity.

 

The American system thrives on the hunger and energy of poor immigrants to absorb other people, cultures, ideas, goods, and services.  If it can remain an open and flexible society, it can be different than previous super powers and keep from becoming rich, fat, and lazy.

 

As it has in the past, the American system can thrive on developing new technologies and integrating them into growing markets overseas.

 

There are many issues to address within the USA, such as heavy regulation, openness to foreign capital, and the high cost of large government and various entitlement-like programs.  However if the American society and government can adapt, can address these issues in a fair and constructive way, and can keep from becoming parochial, as other nations become more active internationally and seek greater freedom of action, then the other nations will continue to open their markets, free up their politics, and embrace trade and technology.

 

As the world is globalizing, the USA needs to:

-          leverage its “can do spirit”;

-          be sure to not become inwardly focused with entitlements;

-          not become parochial; and

-          be sure to globalize within the USA as well.

 

As Steve Forbes likes to say “more financial education, and the resulting financial literacy and empowerment, will open our eyes to alternative investment opportunities and be the key to a recovery from this financial crisis.”

 

Let’s open our eyes, embrace the changes, and look for alternative investment opportunities as we experience the “rise of the rest.”

 

In previous articles, I wrote that many of us are evaluating alternative wealth creating strategies outside of the US Dollar … outside of dollar-denominated assets … perhaps emerging markets … perhaps energy assets that are inherently useful like oil rigs, hydropower, or methanol plants … perhaps precious metals, water rights, oil, natural gas, potash mines, or gold mines … things hard to build, difficult to replace, and costly to substitute … definitely not financial stocks, definitely not retail stocks, definitely not commercial property.

 

I trust this article provides a little more insight as to why emerging markets with a demand for things that are in short supply (such as oil, food, water, precious metals, rare earths, and potash mines) represent alternative wealth creating strategies.

 

In addition, a good book to read would be “The Post-American World” by Fareed Zakaria.

 

I will continue to build upon the “influence of the usa Empire is peaking” theme, which is one of the 5 Es of the “5E-valuation framework” and the other Es in the framework (peak Energy, from west to East, Experiment with paper money, and Economic cycle) in future articles and updates at my blog which is at http://aspenIbiz.blogspot.com .

About the Author

Early in his career, Mike was an engineer with a large aerospace company. For many years, he was with a “marquee” consulting firm where he worked extensively with clients all around the world and became know as an American globalist. Most recently he has been providing technology, business, and management advisory services as a self-employed entrepreneur.

empire carpet quote ?

we want carpet, it is 0% interest till 2010. We do not have the cash up front for new carpet. They seem a little pricy, we have 3 days to cancel. Are they a rip off? Is there carpet good? Any insight? Please

Empire has a lousy reputation. The BBB in most cities will warn you away from them. The are more than a little pricey, but a downright rip-off.

Most any dealer can arrange financing. Know up front, that 0% for 2 years costs the dealer about 15% and it must be built into the price someplace.

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