Earlier quoted context omitted.
What you really need to understand about inflation, is that we've had particularly exceptionally low long-term inflation in America for the last 50 years, outside of stagflation in the '70s. And this is all enabled by globalization and global trade. Globalization fundamentally provides arbitrage for two things. Labor costs, and environmental regulation. Because there were a lot of poor desperate countries that would…
>Globalization is fundamentally enabled by the US Navy and US military supremacy guaranteeing shipping trade on the oceans. >This has not been the historical Norm. It's actually historical anomaly caused by the power vacuum of world war II, and secondarily by the fact that the Cold war was between the US and maritime power and Russia, who are effectively landlocked. >This combined with American lack of enthusiasm for…
Do I really think China is going to disappear over demographics? I think if you would gone back to the 1980s he would have looked at the Japanese demographics and said the same thing.
Japan is still around and it's doing fine.
Are we going to see privateers and one eyed captains pirating international trade like he once predicted? Not in the age of carriers.
But what navies can do is they can harass ships: board them, inspect them, delay them. Arbitrarily close shopping lanes and force them to take other routes (China could do this to make their exports preferable to say Vietnams).
Zeihan parrots a lot of other geopolitical thought and international relations thought. The general question post cold war was when the US will go isolationist. I believe largely that did not happen because US industrials wanted offshore production for cheap labor. So the US maintained its global focus.
With China, and Xi in particular, doing the things that they are doing to him in capitalism in China, that is forcing a reevaluation of companies have their production.
Sure. You could move it to Vietnam or Malaysia or Thailand or various countries like that, but that still places them within the Chinese military sphere.
When you consider that we have a country like Mexico south of our border which is extremely productive, more productive than practically any other country. We currently have our production outsourced to any degree, why not move our production to Mexico?
Most of our natural resources, especially with the discovery of shale oil in The Dakotas is sourceable from the northern hemisphere.
But we'll see what happens