We have heard for well over a year about the impending disaster in Europe with the Greek debt calamity. The drum beats louder and we can see the demonstrations, protests, strikes; all those things that people do when they realize their country is now underwater but still expects the entitlement safety nets to remain in play. Oh, by the way, we have been hearing as well about all the PIGS ... Portugal, Italy, Greece and Spain and let's not forget Ireland. But in doing some research a really hard ball hit me squarely in the context head ... if you take the sovereign debt of Portugal, Greece, Spain and Ireland and add it together, they still would not owe as much as Italy. Think about that for a second!
So, we have the European Union on the periphery of potential collapse at worst or breaking into a two or three tier confederation with apparently Germany holding the trump cards in either scenario. We have the US in an order of magnitude worse situation from a debt perspective than anything in the EU and ahhhh, a totally dysfunctional political system in the US to counter the waves that are collapsing the shores of financial protection around us. But wait, hold it, ummmmmmm, what is faster than a speeding bullet, leaps tall building and bounds whatever it wants to when it wants to in the early part of the 21st century ... that's right, CHINA!
China now finds herself on the threshold of becoming the greatest global power less because they are that good but more because the rest of the world has become less good. China has a surplus of foreign currency holdings including US$ in excess of THREE TRILLION DOLLARS. That does not count a couple of trillion in gold reserves. China has been spreading her wings relatively calmly and quietly in the emerging world for the last five years. Brazil, Venezuela, throughout Africa, Poland, the Baltics and the Balkans and yes, the United States and the EU. Now China can, if she decides and I believe she will decide if she is smart and she is very smart, can invest in relieving the sovereign debt of these nations in the EU and be the Long Ranger riding in on his steed Silver.
But old Hi Old Silver is really a Trojan horse for comes with debt relief offered by the platonic China Central Bank comes ownership and influence on a grand scale as China's growing hunger for raw materials, commodities, production assets, technology sources and resources to support China's massive middle class build up goes forward. Remember my old adage ... whomever owns your debt owns your future? Well, this is the case study unfolding.
As I have said before on these pages, like China or not, there are some brilliant strategic global minds moving the levers of decision making as we witness growth coupled with well paced acquisition strategies, infrastructure development to support this growth all being orchestrated in a successful manner. But at the aggregate of the whole capability China is having rests one powerful catalyst ... her holdings in global currencies and gold with almost no debt.
The 21st century miracle, and it is, will be studied by my great grand children in their education and will probably be taking, required, Mandarin in the second grade. Yes, I fully believe that is what rests beyond the horizon. The predicament the global economy now resides within a corral of seemingly incapable political leaders or initiatives to stem this rolling tide is real and becoming more evident with each passing day. But even within that I wish to restate that I believe this reality if embraced and not fought can be the greatest opportunity to strengthen America's position in the world and the same holds true for the EU. As we have heard and it is true, a rising tide does lift all ships and in this case now, the tide is red and rising fast. Those ships that remaining anchored will be pulled under the rising tide and drowned while the ships that align in rising with China's tide and grow will become better as a result.
Who knows, I may be completely wrong but all evidence to the contrary, we are witnessing a return of Chinese greatness on a global scale and it is a sight to behold I must admit. The Chinese students I have been honored to teach are all evidence of what I am say. Quiet, low profile, focused, astute, works harder to understand than their American counterparts and seeks ways to do more ... THAT is China 21st Century!
As a sidebar, by the way, you really need to watch Turkey and her role in Egypt and the growing noise again of Israel and Palestine. Yes, that same Turkey Europe has raped and pillaged for nearly one hundred years as has been done in the colonialism period of Africa, is now becoming a force to be reckoned with. So if we are smart, and we are smart, I believe the countries to really watch ahead is Brazil, Russia, India, China, South Africa, Turkey and South Korea.
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