Comments by "Ivancho" (@ivancho5854) on "Zeihan on Geopolitics"
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I'm not as worried about deflation as Zeihan. I think that deflation is also self correcting, just on a longer time frame. He talks about how the only thing that really saved the world from the deflation of the Great Depression was the Second World War, but I think that is no coincidence. War is a political tool to combat deflation. In democracies people vote in extreme parties, either the hard left, the Communists, or the hard right and both eventually choose war to stay in power.
What I worry about is that the USA, indeed the entire West has accumulated a wartime debt in a time of peace. Deflation is absolutely coming. We haven't had as large a contraction in the money supply since 1929, so we're going to have a depression. As Steve Hanke says "It's baked into the cards." If government debt to GDP rises to over 100% then that debt can only be inflated away (unless they default). Inflation is in reality just the devaluation of the currency.
Inflation is actually easy to achieve, as a government only has to continue to pay government employees more. The reason that Japan didn't do this was a choice - a very bad choice as is evident by their demographic decline. I suspect that the reason that they did not was that Japan is a massive lender to Asia. They're now seeing some inflation probably because they see a depression coming and will not be able to lend.
Back to high government debt in the West. The reason that this is a problem is that it positions the government poorly. How does it create inflation when the economy is contracting with incredible force? It can't expand the state's percentage of GDP if, as now, that percentage in the West is already at record levels. It can't afford to go to war. It's hands are tied and countering extreme deflationary forces becomes extremely difficult without altering the society. The West is in a very bad situation, but at least we're not the rest of the world!
Wow, I went on forever. All the best everyone.
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Oh yeah, China is formidable, but not in the way which most Western analysts focus on. The West focuses on China's air and sea power, but ignores the nuclear ballistic missile threat. China has way more than 400 nukes, probably double that. In a full scale conflict between the US and China, China would lose a conventional war very quickly so such a conflict would likely escalate to a nuclear one fast. Everyone assumes that China will take a beating, but not go nuclear and that is absolutely wrong. Could the US protect its cities against Chinese ICBMs? Not 100%. So say only 5% got through (and this figure is probably way too low), that's at least 40 nukes hitting US soil. Ok, it would be much, much worse for China, but the USA would suffer catastrophically.
Just my 2¢ of course.
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I agree that Ukraine needs to inflict more damage to Russia, particularly it's infrastructure, particularly oil and gas, rail and factories involved in military production and those which supply them. I don't think at this stage, if ever, America will supply them with long range missiles. I could however be pleasantly surprised. They may well be covertly assisting Ukraine develop their own, but Ukraine has a long history of aeronautics and may not need much help. I am extremely surprised how little Ukrainian special forces have been active in Russia. Targets are plentiful and of all the nations of the world, the Ukraine has the biggest advantage to successfully infiltrate Russia.
Not supplying enough weapons to Ukraine is undoubtedly prolonging the conflict, however the loss of large numbers of young men can not be sustained by Russia as it has extremely poor demographics. The higher the Russian losses the less of a threat to NATO. How many more men will then leave for other lands rather than being mobilised?
The US has a very long and consistently successful history of fighting today's wars today and tomorrow's wars tomorrow, including proxy wars. Nuclear proliferation is not today's problem, doing as much damage to Russia as possible is. I am sure that if there were peace tomorrow that the sanctions against Russia would continue for a long time. Which hurts Russia's economy and reduce its capacity to wage war for decades to come.
All the best Michael.
Slava Ukraine. 🇺🇦🇬🇧
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@JoeCole_social Poland 1.5 and declining, Czech 1.8 and slightly rising, Hungry 1.5 and rising, Bulgaria 1.8 and declining. These countries seem to be representative of Eastern Europe, between 1.8 and 1.5 and generally declining, though there are large regional differences even within countries (Bulgaria varies from 2.1 to 1.6 regionally) and minorities (eg Muslims and Gypsies, if we're allowed to comment on them?). The figures in Eastern Europe are slightly better than Western Europe, but it's not great. Nowhere in Europe approaches 2.1, but almost everywhere in Europe is seeing immigration (even Poland which socially was very much against immigrants I believe!). IIRC Ukraine was one of the worst before the invasion and now is definitely the worst in the continent.
It's a fascinating subject. I'm really interested in Orban's tax breaks in Hungary (despite it looking like he's not a fan of democracy), but there really doesn't look like there's a clear answer as to how to reverse the demographic decline. In the end if it's not too severe and every country is experiencing this then, apart from how to support an ageing population, is falling birth rates a bad thing? Maybe not. Are we panicking about nothing? It's very hard to say. It may just be a change with both positive and negative implications.
All the best Joe.
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