The New Silk Road

Hope you are teaching your children Mandarin. The documentary is "China On Top", with quotes from Doug Casey's article "Chung Kuo":

"The Chinese absolutely resent the U.S. government parading its aircraft carriers off the China coast as if it owned the place. The U.S. government is not showing strength, it's displaying arrogance and stupidity by antagonizing a sleeping dragon. And the thought of American politicians—which is to say an assortment of insular lawyers, eggheaded wannabe social engineers, and refugees from Arkansas trailer parks—negotiating with people who've been through what the Chinese have, is just scary. The U.S. government may feel like it can call the shots now because it has a dozen aircraft carriers and a couple thousand fighter planes. But it's making a serious enemy while it's going to bankrupt America in a counterproductive projection of force to the other side of the planet.

The U.S. economy is growing at 2%, and China's at about 7%—but with a base of about four times the population. What this means is that the largest economy on the planet will soon no longer be America's—but China's.

Of course, the average American will still be living far more comfortably than the average Chinese; he'll still have a bigger house, more gadgets, cars, and consumer goods. But he may actually have considerably less investment capital and savings. And there will be vastly more wealthy Chinese, and they'll have vastly more wealth than wealthy Americans.

There are a number of reasons for this. One is that Chinese culture is ingrained with the Confucian work ethic, which is quite similar to the Protestant work ethic that helped the West get where it now is. The difference is that the West has become a group of flaccid welfare states, morally weakened by its own prosperity, pretty much as Joseph Schumpeter predicted.

Take an American and a Chinese, each with a dollar. Say both are equally smart and hardworking, and each is able to double his dollar every year—2, 4, 8, 16… The only difference is that the American pays 35% in taxes and the Chinese pays nothing. Actually the American is paying close to 50% and the Chinese is paying something, but the difference is about the same. With only that differential, by the time the American has one million dollars, how much does the Chinese have? The answer is that by the time the American has a million dollars in 28 years, the Chinese has 268 million."