China Globalization or World WarPeter Thiel is a successful entrepreneur/VC and hedge fund manager. His latest contribution titled
The Optimistic Thought Experiment, published by Policy Reivew of the Hoover Institution of Stanford University, is a must read for clear thinkers.
Peter thinks only two things can happen from this mad global inflation. Either China succeed in globalization (supressing the global inflation by continuing to provide cheap labor/products/ services -- the great deflation effect), or an apocalyptic world war will surfaced where everyone fight for natural resources to end all inflation and start from scratch, an act like that of the natural forrest fire cleansing itself from excess growth.
I like to believe China will success in their globalization. It's not going to be an easy feast, as inflation is also affecting China's own economy, and Renminbi is growing stronger y-o-y. All these have negative impacts on China to deliver the deflation effect. But, I think they can do it, or at least I would like to think...
Is the Future of Dollar as the World's Reserve Currency in Jeopardy?I've read countless articles on the future status of Dollar as the world's reserve currency. None of them strike me as "clear thinking" -- they are all too gloomy and doomed. The worst comparison was to the fall of Roman empire caused by hyper-inflation and over-extension of its army and Government expenditures. Sounds familiar? Yes, but I only consider that as fun reading as it doesn't have any concrete analysis behind it.
Then, I found this commentary from Michael R. Sesit, titled
Dollar Reserve Status Is Tale of Fading Glory. While it didn't provide any concrete analysis as well, it did have basic logic and reasoning that are very close to my own. He doesn't think the dollar is going to lose its world's reserve currency any time soon, but it is on the course of doing so if the Government kept its course of spending and name-your-price-tag bailouts. It's fascinating knowing that many countries are doing business in currencies other than the world's reserve currency. I'm not sure where this would take us, but it would be an interesting study for the economic historians in the future.
