{"id":547189,"date":"2010-04-29T09:56:00","date_gmt":"2010-04-29T13:56:00","guid":{"rendered":"tag:blogger.com,1999:blog-5587346.post-8133543558793190205"},"modified":"2010-04-29T11:51:35","modified_gmt":"2010-04-29T15:51:35","slug":"act-iii-china-gpsii-and-rciiit-get-used-to-it","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/547189","title":{"rendered":"Act III: China, GPSII and RCIIIT. Get used to it."},"content":{"rendered":"

To the right of us \u2013 Greece, Portugal, Spain and perhaps Italy and Ireland<\/a> (GPSII):<\/p>\n

\n

How Reversible Is The Euro- – Paul Krugman Blog – NYTimes.com<\/a><\/p>\n

For a long time my view on the euro has been that it may well have been a mistake, but that bygones were bygones \u2014 it could not be undone\u2026<\/p>\n

\u2026but what if the bank runs and financial crisis happen anyway? In that case the marginal cost of leaving falls dramatically, and in fact the decision may effectively be taken out of policymakers\u2019 hands\u2026<\/p>\n

\u2026if Greece is in effect forced out of the euro, what happens to other shaky members?<\/p>\n

I think I\u2019ll go hide under the table now.<\/p>\n<\/blockquote>\n

and to the left of us \u2013 China:<\/p>\n

\n

Andy Xie – I\u2019ll Tell You When Chinese Bubble Is About to Burst – Credit Writedowns<\/a><\/p>\n

\u201cMy maid just asked for leave,\u201d a friend in Beijing told me recently. \u201cShe\u2019s rushing home to buy property. I suggested she borrow 70 percent, so she could cap the loss.\u201d<\/p>\n<\/blockquote>\n

Sigh. It\u2019s not over. Act I was the NASDAQ (remember the NASDAQ?) tech bubble. Act II was the property\/asset bubble. Act III takes place in Europe and China.<\/p>\n

It really does feel like a world of hurt down here, and we haven\u2019t even hit Peak Oil<\/a> (but it\u2019s on the way<\/a>.)<\/p>\n

We all wonder why. Why now? A year ago I made up my personal list of 10 contributing causes (Feb 09)<\/a> and, recently, I wrote up one way out of America\u2019s particular set of challenges<\/a>.<\/p>\n

Since then I\u2019ve been chipping at the list, looking for the cause of the cause of the cause (etc \u2013 go too deep and it\u2019s all entropy). Sure we\u2019ve got above average corruption and economic financialization<\/a>, but those tendencies have always been with us. This feels like something novel, something that, in modern times, has come along every century or so. (In deep history every 2,000 years or so<\/a>.)<\/p>\n

I\u2019m nominating two independent but self-reinforcing causes \u2013 information technology (IT) and the Rise of China and India (RCI, aka globalization).<\/p>\n

The Rise of China and India (RCI) has been like strapping a jet engine with a buggy throttle onto a dune buggy. We can go real fast, but we can also get airborne \u2013 without wings. Think about the disruption of German unification \u2013 and multiply than ten thousand times.<\/p>\n

RCI would probably have caused a Great Recession even without any technological transformations.<\/p>\n

Except we have had  technological transformation \u2013 and it\u2019s far from over. I don\u2019t think we can understand what IT has done to our world \u2013 we\u2019re too embedded in the change and too much of it is invisible. When the cost of transportation fell dramatically we could see the railroad tracks. When the cost of information generation and communication fell by a thousandfold it was invisible.<\/p>\n

The IT transformation is not stopping. If anything, it\u2019s accelerating. There are more than 350 million mobile phone subscriptions in Africa<\/a>.<\/p>\n

Think about that for a minute.<\/p>\n

In five years Africa will have at least 500 million 2010 iPhone\/Droid interconnected equivalent devices, and Google\u2019s sentence-salad English\/China translation<\/a> will probably work. I\u2019m still thinking we miss Kurzweil\u2019s 2045 catastrophe<\/a>, but the prelude will be rough enough.<\/p>\n

RCI and IT (RCIIT?) Alone each would have thrown the world for a loop. Together they\u2019ve put us into an entirely new level of future shock.<\/p>\n

We might as well get used to it.<\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

To the right of us \u2013 Greece, Portugal, Spain and perhaps Italy and Ireland (GPSII): How Reversible Is The Euro- – Paul Krugman Blog – NYTimes.com For a long time my view on the euro has been that it may well have been a mistake, but that bygones were bygones \u2014 it could not be […]<\/p>\n","protected":false},"author":711,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-547189","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/547189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/711"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=547189"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/547189\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=547189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=547189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=547189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}