Can this be a surprise? We left our chaos to fend for itself over
August and it did so. It is a coherent system of chaos – with parts
dying off and parts evolving- yet, en masse, it looks the same mess as
when we went on holidays. Some elections were won before the recess
and the winners having promised much to their populace left to eke out
their ‘first 100 days’ in villas by the sea-side; more seasoned
politicians simply went for long walks in the quiet of the hills –
though both no doubt were in touch with all the media via their
smartphones and via their permanent staff who always seem to work.
Even the movable Ramadan ended recently so Muslims world-wide may
again eat and drink at any time of the day.
Meanwhile in those two big nations – America and China – politicians
continue to battle day in and day out. In the US there is no
cessation to the wild claims of both side in their electoral champagne
that thankfully will finish with a winner in November. And in China
there is still a surge among the political elite to protect their
reach as they haggle for power prior to the formal hand-over in
October at the 18th National Congress. In both countries there are
signs of vast change. In the former some signs of retrenchment and a
lessening of US hegemony, while in China we see more signs of ‘going
global’ across a wide sector of commerce and politics.
But as China looks to the formality of the political hand-over some
commenters wonder if this will occur fully at the Congress due to the
weakening of its overall economy – perhaps the old hands will remain
in power a little longer as their fingers are on the pulse and may be
briefly better able to guide changes.
The US has exhibited low growth figures and high unemployment, Europe
collectively is little better, with EU leaders demanding its unruly
southern members engage in even heavier austerity measures. But that
sentiment studiously ignores the data from the US ‘Sales Managers’
Index’ that have shown growth for the last ten months. Commentators
are choosing to be biased towards gloom. Thus with little [assumed]
growth in the West, and austerity “the norm,” it is not surprising
that the purchasing power of the citizens is falling creating a
vicious sticky economic cycle – few purchases, fewer jobs locally, few
exports of key components to overseas assemblers resulting in a
lowering of production rates in China and thus lower exports from
China shipped back to engage in sales in the West.
As a result, notwithstanding that Shanghai may retain its leading
status as the globe’s No. 1 container port’ and that the Yangtze ports
as a whole show continued growth year-on-year, China Cosco, the
leading national shipper, has increased its losses by 50% due to
abysmally low container rates and higher fuels costs. In fact there is
a global shipping crisis leading to the prospect of many bankruptcies
as container trade volume falls.
Firms over-invested four years ago, betting too much on the China
syndrome. New ships were ordered of which many must be bought as
their contract clauses inhibit default. This has led to a glut of
capacity; and today shipping firms face a $200 loss for each routed
container. Naturally funding banks are reluctant to support
loss-making firms who have to come to the market as distressed firms,
selling off their assets cheaply… only to be bought by Greek shippers,
possibly with the backing of Chinese finance as the latter look to
move into the EU finance sector. There is some irony here as Greece
owes billions in national debt and also via its banks to outsiders.
Meanwhile the shippers, who sold off capacity in the boom years, are
now buying back capacity at depressed prices. Very canny! Of course
these shippers are only handling a few billion dollars – but their
government reckons that 4,000 Greek people owe about $15 billion to
the State. Some of whom are probably these same shippers.
With respect to the global banking crises I have mentioned elsewhere
that we must retain our finance staff as there are otherwise not
enough people with in-depth knowledge of the system to run it well.
The same is true in Greece – we need to invoke a stronger feeling of
love… Not the simple, sloppy B-movie stuff about individualistic love,
but the serious ‘agape’. This is the Greek translation for love that
is ‘… unselfish, for the group’. Thus their overseas account holders
ought to come forward with their millions or billions to wipe out
national, even European debt. Then we would see growth again.
However, I think this will not occur as the politicians are adept
orators and will incite us to behave as we must – or to behave as they
wish we ought to behave … prudently managing our cash flows and not
getting into uncontrolled debt. I note that the book by Frank Luntz,
a US political commentator, is appropriately titled – “It’s not what
you say – it’s what they hear”. We hear the chaos continues, we do
not hear that the economies of the US, Germany and Ireland are
growing; as are many nations in Africa and Asia and that it really may
be possible to get out of this long-running mess. Let’s be more
buoyant, hopeful and proactive.
Frank-Jurgen Richter is founder and chairman of Horasis, a global
Horasis is a global visions community committed to enact visions for a sustainable future. (http://www.horasis.org)
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