In the video today, you emphasized the significance of recent moves by China regarding its currency and inflation. These issues were discussed in length in a Mises Institute report which will be of interest to many readers.
Thank you for this interesting article which is representative of monetary conservativism that is a central theme in decrying the loss of purchasing power in fiat currencies since the abandonment of gold as a monetary base.
As Carl von Clausewitz said “War is the continuation of politics by other means” One of the reasons the German attempt a fiat money failed is because it lost World War I. The USA ran historic deficits during World War II but won the war and therefore had the upper hand in negotiating better terms for the Dollar as a global medium of exchange.
China is a rising economic and military power but I suspect that if the global hegemony of the Renminbi is in fact to be asserted then it will need to assert its military power in no uncertain term. Work started this week on a third aircraft carrier and is outfitting a destroyer. In speeches over the last few months Xi Jinping has been clear that he wishes the PLA to be a globally competitive and technologically advanced force.
The technology gap between the USA and China is still wide but it is tightening. Two developments I am watching for is the evolution of a domestic Chinese semiconductor sector which it has so far been prevented from developing and increasing assertiveness overseas.
There is a real possibility that China will eventually take over responsibility for securing the Gulf’s oil from the USA at some point in the next decades. The USA is now an exporter and appears to be betting that its technology focus will triumph in a post commodity focused world as energy storage solutions evolve. That represents a significant bet on technology delivering on energy independence over the long term.Back to top