“By joining the World Trade Organization (WTO), China is not simply agreeing to import more of our products. It is agreeing to import one of the most cherished values of democracy: economic freedom.”
The statement is by Bill Clinton, from March 2000.
I think, and I have argued it many times, that what has happened is that not only has China not imported economic freedom but the Western world, the United States in the lead, has imported forms of oppression and control typical of communist China.
Having admitted China into the WTO was a principle of collective suicide of the Western world, a contagion of the Western world with the virus of Chinese communism.
Universal globalized trade has crushed the middle class all over the world, creating income disparities that today appear unbridgeable and are the classic and historical symptom of a decaying society.
In the United States, the richest 1% holds 32% of the nation’s wealth. In China, the richest 1% holds 33% of the nation’s wealth. The 500 richest men on the globe hold half the world’s wealth.
In economics, the Gini coefficient measures economic equality (if you prefer: inequality). A value of zero represents perfect equality, and a value of 1 represents absolute inequality.
Over 0.40, the Gini coefficient is believed to be critical and an indication of serious consequences for society. In China, it is 0.466, and we might have expected that, but in the United States it is 0.49, and that is simply dramatic.
The end of the Roman Empire, in history, has similar connotations of gigantic inequalities that led to the empire’s dissolution and implosion.
The U.S. debt is a gigantic sinkhole sustainable only with a universal dollar currency for international trade.
Last month, China signed a monumental agreement with Brazil, the U.S.’s historic trading partner. China is supplanting the U.S. in this role, and the agreement involves negotiating in yuan rather than dollars. India is following suit and, amazingly, Saudi Arabia, a historic U.S. ally, is also doing the same.
Macron’s visit to China, where even the snub of a Von Der Leyen induced to take a normal scheduled flight by queuing at the gate to return home was tolerated, is an awkward attempt by France to establish a preferential relationship with China by agreeing to trade in Yuan instead of dollars.
Something grimly decadent, very clearly visible in the false confidence flaunted and betrayed by the wrinkles that have appeared massively on Macron’s forehead rather than in the dark circles under the eyes and the lost expression of Von der Leyen in the check-in line, is sweeping across the West.
It will probably end in a gigantic financial crisis, between now and the next two to four years. Too big the crunches, too sinister the cracks in the system.
In the short term? Let’s protect ourselves with good money management and AI supports that are capable, today, of outperforming humans, at least in analytical and computational ability.
Our AI system implemented in past years and coming on stream in 2023 underpins our index and all our thematic portfolios
In May-June, maybe July, maybe during the summer, we will see a violent storm hitting the stock market. But it will be a thunderstorm, violent indeed, it may do damage, but like all thunderstorms, it will pass. Could there be a double low from October on the S&P500? Maybe so, or perhaps, we shall see, a low on par with those of June 2022, with the pattern of an inverted head of shoulders.
In 2024, in the U.S., we attribute to the Republicans a great probability of winning the election and we will have new stock market highs, and during the four-year term of the presidency, probably a disastrous crash.