Marc Faber Blasts "American Military Presence In Asia Is Completely Unacceptable"
Submitted by Keith Hilden via Squawkonomics,
In our latest Squawkonomics interview with Marc Faber, we were told a story of a petulant and wincing state carrying a heavy burden and unwilling to release its full spectrum dominance view on its administration of the world in light of a recent economic fallback, a declining economic share of the global economy, and the very stewardship of the global reserve currency being in flux. The story did not have a clear ending, nor did the reign of the world come effortlessly into the hands of newly important states. Nor did it portend the future of frontier markets and developing countries that could very well benefit from a US with a declining share of global GDP. Perhaps overlooking a wide expanse of undeveloped frontier markets, a quote from Dune author Frank Herbert would be best. “There is no real ending. It’s just the place where you stop the story.”
Indeed, that however the reserve currency question is answered, and however US economic hegemony looks in 10 or 20 years, there is one inevitable variable that stays constant throughout the geopolitical and economic King of the Hill tug of war between global powers. As two or more tigers duel on a mountain for global financial supremacy, the continued development of the rest of the developing world goes on unabated. That is a guarantee.
Marc told Squawkonomics that the Western imposition of its its administrative view of the world was being met with Nation States with quite different ideas of how the world should be run. From border demarcations and enforcement, to administration of the global reserve currency and global commodity exchange hub shifting, these positions of power and privilege have been thrown up in the air due to hasty decisions and management. In doing so, there are the makings of a multipolar world created from the current schism of US economic hegemony- a process the US is looking to halt- or at least manage- so that the outcome is still favorable to US interests. Faber also calls out the US pivot to Asia as a “China's backyard” geopolitical move headed by the neocons of Washington as a misguided policy. He wonders aloud what they must be thinking to contemplate such a move, knowing the US would be equally feeling threatened if China set up a military base just outside Toronto or Tijuana.
And Faber is quite clear on his stance regarding America's pivot to Asia:
FABER: "I am not God, I am not here to judge who is right and who is wrong, but if I were China, if you look at geopolitics in Asia from a Chinese perspective, its completely unacceptable in the long run to have American military presence in Asia".
FABER: "As a large power like France and Britain and America, you might be able to push around small countries, but you can't push around a country that has twice the population of Europe and the United States, and has become a relatively modern state with military that is very powerful."
We felt the most prescient big picture comment Dr. Faber brought up was regarding declining US economic hegemony in the form of the US economy comprising a lower share of the global economy as a whole. This sparked a bone of contention with us, as we find domestic GDP posts in their current context to be less and less of a reliable indicator of real economic activity. In the meantime, however, we will use this increasingly outdated metric to demonstrate Dr. Faber's idea of ever declining share of US GDP to global markets. This is a trend that has been going on for at least 15 years, shown in the eye-popping decline of US contribution to global GDP over a decade's time.
Traditional economics through standard GDP prints every quarter always presents countries as horses on a never ending racetrack. Sometimes, a country's horse runs a bit slower to the finish line, but they all get there in the end right? Sounds like a nice way to end a fairy tale or a Hollywood movie where the underdog protagonist gets beat up only to rise up again, but that's not how real economies work. A far clearer picture of what is going on is a country's contribution to the world economy, and that's when numbers get potentially ugly and beyond what is considered polite discourse at a dinner party.
No American wants to envision the US economy declining against the world 32% over a 10 year period of 2001-2011 but that's precisely what has been happening. Noticed a bit of dilapidation around suburbs in Chicago, Detroit, and other cities of previously pulsing economic activity? That's what a 32% decline in your economic performance against other countries gets you. That money you were going to earn, or spend? That's gone off to Sao Paolo or Shanghai, where someone has outcompeted you. Perhaps on cost, perhaps on currency manipulation, perhaps on just plain get up and go spirit, but you've been had, and your future income has been extricated from you and given to someone who performs better than you.
This results in American output being about 32% less desirable or productive compared to the rest of the world. Call it the Hunger Games, or call it just a slap across the face.
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