The West slowly declines, the East rises. In the forefront of that rise will be China, though SE Asia, the Four Asian Tigers, and maybe Russia will be on that sky train to the future as well (Russia is 50/50; we’ll see). I talk a lot about why the West is collapsing; today I’ll demonstrate why China, despite its many problems and rough short-term future will, in the long-term, be the de facto ruler of the world within the next several decades, replacing the Collapsing USA as the great economic superpower of the planet. These reasons are listed in no particular order.
1. New Chinese-controlled SWIFT system
Most transactions in the world run through the SWIFT system, based in Europe, but controlled by the US. This gives the US vast power to deny certain countries or entities access to the global marketplace.
China didn’t like that, so they have just unveiled their own SWIFT system that they will use in coordination with Russia and other BRICS nations (BRICS stands for Brazil, Russia, India, China, and South Africa, the most powerful, on-the-rise, non-Western powers.)
Once this goes online, the US will lose a lot of the world economic power its enjoyed since WWII, and that power will shift to China and Russia.
2. Destruction of the petrodollar
Much of the reason for the US’s economic power and affluence over the last several decades is because they have a monopoly on the petrodollar. This means that if any nation on Earth wants to buy oil (and they all do), they must purchase US Dollars from the USA first, then buy the oil with those dollars on the world market.
Well, China and Russia don’t like that, for obvious reasons. Recently, they made the largest energy agreement in history, allowing them to sell and purchase oil and other natural resources using the ruble, yuan, and gold… and not the US Dollar.
This is huge. If the US loses the petrodollar, some very bad things will happen to the US economicly, and some very good things will happen to China.
3. A new, motivated competitor to IMF
The International Monetary Fund is one of the largest banks in the world, controlled by the elites and mostly the US. The five BRICS nations have recently combined forces to create their own IMF, called the NDB, or New Development Bank that they are now using to circumvent the IMF and US/Europe powers.
I actually visited the NDB headquarters in Shanghai earlier this year. Trust me, these guys are serious. They’ve dumped $100 billion into this thing. The IMF has about $660 billion, six times the size, which sounds like a lot, but not when you consider that the IMF comprises almost every country on Earth and the NDB is just five countries.
4. The new silk road
This one is the most exciting to me personally, since I think there’s huge opportunities for international entrepreneurs willing to do business outside of the Western world. If you thought $100 billion was a lot of money, China has dropped $900 billion into a new silk road, called “One Belt, One Road” that is a land-based and maritime-based trade route that will literally link all of Asia, all the Middle East, and much of Europe into one gigantic trading zone.
Once this thing is done, economic activity will explode all over the East. 68 countries are ready to spend $8 trillion or more to make this happen. You can read more about it here. It’s super exciting… and the USA has pretty much nothing to do with it.
5. Domination of Africa and Oceania
I’ve talked about this many times already over the last several years. While the USA is dicking around in the Middle East to service a handful of American oil and military contractor elites, China has quietly taken over the economics of many nations in both Africa and Oceania. Africa alone is loaded with natural gas, oil, gold, diamonds, and various other valuable commodities… and China controls it, not the West. I also see China’s influence all over the place in Oceanic nations such as Australia, Indonesia, and even places like Fiji.
6. Far superior work ethic
Due in large part to America’s shift to the political left, Americans have grown lazy. Many European nations are even worse. But Asian nations bust their asses like no other culture I’ve ever seen. Read this latest example of what I saw last time I was in China. Absolutely mind-blowing. The West doesn’t stand a chance against this kind of focus, drive, and motivation. It just doesn’t.
7. Not nearly as much debt
As I just talked about recently, the on-books debt of the USA just surpassed $20 trillion, which is over 100% of our annual GDP. Europe is even worse. China has a lot of debt too, don’t get me wrong. But it’s nothing compared to the debt of the West. While we’re over 100% of our GDP in debt, China is only 20-60% of their GDP depending on how you run the numbers.
The USA’s gross savings rate as a share of GDP is 18%. China’s is 50%.[*] That’s almost triple, folks. The Chinese are savers and think long term. Westerners are addicted to debt and government handouts, and don’t think past next week.
7. Buying up all the gold
This one is really interesting and actually a little creepy. Over the last few years, China has been purchasing literally truckloads of gold and hording it away. You can see how much they’re buying as compared to other nations here, outstripping all other nations by far. (India is doing this too, though not as crazy as China.) At this rate, if China keeps this up, they may own most of the gold on the planet. Crazy!
Why is China doing this? What do they know that you don’t? (Good thing I own a lot of gold.)
China Rises
China will rule the world in your lifetime, folks. Yes, China has a demographics problem with not enough women being born, and they’re on the verge of a huge real estate bubble, some of their cities have horrible air quality, and they have a few other problems. All true. China will have it’s share of problems on its way to world supremacy, just as the US did on its way to theirs. We had depressions, civil wars, world wars, assassinations, etc, and we still became number one eventually. Doesn’t matter.
China will win in the end. It’s very hard at work taking over the world, as always.
What is Europe doing? Going bankrupt.
What is America doing? Bitching about football players not standing for the national anthem.
You can either profit from China’s rise, or get angry, get defensive, and lose. The choice is yours.
I’ve already made mine.
Want over 35 hours of how-to podcasts on how to improve your woman life and financial life? Want to be able to coach with me twice a month? Want access to hours of technique-based video and audio? The SMIC Program is a monthly podcast and coaching program where you get access to massive amounts of exclusive, members-only Alpha 2.0 content as soon as you sign up, and you can cancel whenever you want. Click here for the details.
Leave your comment below, but be sure to follow the Five Simple Rules.
justin
Posted at 05:53 am, 4th October 2017Completely agree with you. What are your top 3 investment options to profit from the rise of China?
Joanna
Posted at 06:34 am, 4th October 2017Correct China does basically own Africa’s mineral resources. Just down the road from me in my tiny seaside village a Chinese company has pumped billions into a new manufacturing plant at the IDZ. I have friends who entire livelihoods depend solely on trading with the Chinese.
Growing up I could never understand why Africa could not rule the world until I worked for Samsung Electronics. Damn those guys are next level efficient! They don’t work 8/5 they work 24 hour shifts so at any time you could receive an email with an instruction that had to be carried out. No excuses.
I remember sitting in a huge board room at our Head Office in Johannesburg and everyone shitting themselves because the CEO was about to enter the room and blast us for allowing Blackberry to maintain majority market share, this was still when Blackberry was cool. He was always eerily calm and everyone was terribly frightened of him because if you as much as even hesitated when he issued an order you were goners.
Brandon
Posted at 07:34 am, 4th October 2017What year/decade do you think China will surpass America? And what will happen/signs will there be when this occurs?
CrabRangoon
Posted at 08:27 am, 4th October 2017I tend to agree but as you stated, it won’t be in the near term. Who can guess these things but I’d say within 50-100 years time they will be a more dominate power. Much of it depends on how quickly western civ declines. The speed of decline does seem to be ramping up though given our debt levels, waves of immigration, etc..
Caleb ever read John Glubb’s book “Fate of Empires”? It’s a short read that described the cycle each empire goes through from start to collapse. It’s happened many times over in history and based on his info, we are most certainly in the end phase which he calls the age of decadence:
Decadence is marked by:
Defensiveness
Pessimism
Materialism
Frivolity
Influx of foreigners
Welfare State
A weakening of religion
eric
Posted at 10:44 am, 4th October 2017inspiring.
blueguitar
Posted at 11:06 am, 4th October 2017Interesting and thought-provoking. Thanks!
China just started relaxing the one-child rule in 2015. The ratio of men to women at certain age levels seems to be higher than most places (https://en.wikipedia.org/wiki/List_of_countries_by_sex_ratio). I’m curious to see how this plays out in China. I think it will temporarily create more economic growth due to internal competition. More high-achieving men will go overseas to find a wife. In about 20 years, the ratio will probably return closer to normal.
Of course, it also has the potential to increase instability if not handled correctly.
Caleb Jones
Posted at 11:09 am, 4th October 2017No one knows for sure, including me. My best guesses would be anything in heath care, pollution control, and commodities.
Yep. Great examples!
There is no way to know that. My wild guess would be sometime in the 2030’s-40’s, but it could be sooner.
You’re already seeing the signs. It’s something that is already guaranteed to happen. (Again, beyond a crazy and unexpected tech revolution that changes everything.)
It will not take that long. They’re already a dominant power right now.
Correct on both counts.
Absolutely. Great book. I may write an article about it.
Caleb Jones
Posted at 11:21 am, 4th October 2017Yes, that’s going to be super interesting to watch. I agree with you that short-term it may actually help China in terms of economic activity. Maybe.
The other part of this is that the herbivore men of Japan are now “infecting” China, and many young Chinese men are opting out of dating and sex altogether, focusing on Japanese anime and computer porn. If this happens at levels anywhere close to what’s going on in Japan, this shortage of women may not pose a problem for China at all. There will be less women available but less men who are interested, balancing it out. Kinda funny.
joelsuf
Posted at 02:09 pm, 4th October 2017This makes me wonder if China is trying to bring back the gold standard that the US replaced with Fiat Currency?
Caleb Jones
Posted at 02:27 pm, 4th October 2017No. The elites in China likely hate the concept of a gold standard as much as the elites in the US.
They just know that if the dollar collapses, gold will skyrocket. And the guys who run China are well aware of the future of the US Dollar…
He with the gold, makes the rules…
John C
Posted at 10:15 pm, 4th October 2017The problem for the West is not just the rise of China and the four tigers over taking the US but that of Asia in general over taking the West. The question is what happens to Europe and the US if things like Korea (I know one of the tigers but it would be much more powerful) becoming one nation, if India solves some of their corruption and Japan solves their population declines?
China is just one factor but if Japan and Korea get their problems solve (and perhaps India) then there is little reason not to invest in Asia. It will be even easier than today for countries like Russia and Iran to continue to move their trade to Asia not just due to economy but the fact that they don’t care about human rights.
Also Asia (or just China) over taking will change both the higher education worldwide and state education in the west. Students will look to study in Tokyo, Beijing or Seoul over Oxford, Yale and Harvard.
A lot of Nations worldwide will also start to model their government to the Asian powers than the Western Democracy. It happens throughout history that everyone wants to model success.
There is two bright things the west can look forward to though when Asia and/or China over taking the west is one it will led to the end of the welfare state and two no to little reason to care about political correct with the minorities and feminist.
It is interesting times we live in.
thomas osgoode
Posted at 05:10 am, 5th October 2017Who knows, if per your post that China has the brain and will power to overcome, maybe they will figure out a way to make babies without humans (e.g. ectogenesis).
Ted
Posted at 06:18 am, 5th October 2017Like always you see the extreme 5%s online, both news and bloggers, to get clicks, while truth is somewhere inbetween. Is the situation in USA really that bad? I mean if you spoke Chinese and followed Chinese news you may feel just as pessimistic about China
Throughfare
Posted at 09:43 am, 5th October 2017Hey Caleb, Could I recommend another book: The Silk Roads, 2015, by Peter Frankopan, Bloomsbury
https://www.bloomsbury.com/uk/the-silk-roads-9781408839973/
https://www.economist.com/news/books-and-arts/21661564-ambitious-work-pushes-world-historys-focus-eastward-brilliant-threads
The bottom line (that the Economist reviewer doesn’t “get”) is that for thousands of years, great powers that could dominate the trade routes of Eurasia formed the most prosperous empires.
The world is reverting to this standard after the relatively short (in gepolitical terms) 500-year dominance of the western European countries, due to their development of superior weapons technologies, and navies.
That is the larger trend on top of the current trend of the US to follow the route of decline followed by Spain, right up until the US took over much of the Spanish Empire’s territory in the late 1800s.
Caleb Jones
Posted at 12:07 pm, 5th October 2017Utterly incorrect. Survey after survey shows that China’s people like and trust their government far, far more than people in the US:
https://www.theguardian.com/news/datablog/2012/jan/24/trust-in-government-country-edelman
I strongly advise you to actually do research before forming opinions.
Yes, very possible, which I don’t think will be a good thing.
I more or less agree with your other points.
Absolutely.
joelsuf
Posted at 12:31 pm, 5th October 2017Oh, that makes a bit more sense. I don’t usually go all collectivist, but if there were marches to end fiat currency and replace it with the gold standard, I would totally go to one haha.
How did you start investing in gold and other precious metals, Caleb? I’ve been meaning to ask because I am quite interested in it.
Caleb Jones
Posted at 12:41 pm, 5th October 2017I read a lot about gold likely going up in the early 2000’s because of the bubble in real estate and stocks back then, so I bought a bunch. And I was right. 🙂
All the other metals extended from there.
blueguitar
Posted at 02:54 pm, 5th October 2017I agree that China’s future looks bright.
But China’s success doesn’t equal the West’s downfall. Both the West and the East can nuture robust economic powerhouses.
Most Western problems exist due to internal issues. China’s success may exacerbate issues, but China doesn’t force the US and Europe to make doubtful financial decisions and increase its debt levels, etc.
Am I missing something with this train of thought?
The New Yorker
Posted at 08:16 pm, 5th October 2017So Caleb,
This article reminds me about your older post on China getting a new billionare every week. It got me thinking: How the hell did those people achieve that level of wealth?
Do you think being the millionare owner of a company, MJ Demarco style, is compatible with the Alpha Male 2.0 lifestyle? What I mean is, is it possible to become a billionare while still maintaining the Alpha 2.0 level of freedom? If so, then how?
Do you generally agree with the ideas in the book the Millionare Fastlane by MJ Demarco, specifically his get rich fast and young theme?
Caleb Jones
Posted at 10:52 am, 6th October 2017Correct. It’s the West that is ensuring that.
The West will collapse regardless of China because of those very internal issues. China gaining power would simply hasten it (or could).
Haha yes!
Millions upon millions of people moving from the countryside to the cities, just like what happend in the US in the early 20th century. Massive, massive opportunity for business owners.
During your rise to billionaire, no. That requires long hours for years on end, paperwork, legal entanglements, shitloads of employees to manage, etc, etc.
Once you became a billionaire (or whatever), yes, but only if you completely retire from the income that made you a billionaire and you focused on something completely different with minimal or no employees.
More or less, yes. But some of the stuff he teaches isn’t Alpha 2.0 compatible.
Investor
Posted at 02:22 pm, 7th October 2017There is now a lot of news about successful nuclear fusion experiments. If this really works it could be a major game changer. Would this be one of those crazy tech advances that could change the fate of the world?
Gil Galad
Posted at 03:43 am, 8th October 2017@Investor: even if it works it would take time to implement. And when/if we break even (get more out of a fusion reactor than we put into it), we’ll still have to figure out how to harness it and connect it to a grid. Fusion *will* change everything, but probably on a timeline of many decades, not years. I think that AI and nanotechnology are better candidates for a more explosive revolution. They could also cause huge economic trouble by making a fuckton of people useless.
Caleb Jones
Posted at 11:32 am, 8th October 2017Agree on both counts.
The New Yorker
Posted at 07:05 pm, 8th October 2017Hey Caleb,
You mentioned in one of your books that when one creates a location independent business, one should charge as high as desired. However, you also explained that some industries prevent you from doing so, but you didn’t go on to explain what you meant by that.
Which industries would those be? Like what types of characteristics would those industries usually have? And do you know how prevalent those types of limiting industries are in the Chinese market?
kevin
Posted at 08:42 pm, 9th October 2017The king of Saudi Arabia meeting Putin in Moscow to talk about oil sounds like the decline of the Petro dollar
Any scheduled world events in the near future we should pay attention to?
Caleb Jones
Posted at 12:11 am, 10th October 2017Too many to list. Selling bubble gum for example.
Selling an easily commoditized product to a low-income customer base.
Just as prevalent as any other market.
I don’t pay quite that close attention.
POB
Posted at 12:35 pm, 10th October 2017I have a friend who’s in his early 50’s and already filthy rich. His line of work?
Importing shit loads of delicate and exclusive fabric from China and reselling it with a huge margin of profit to the national fashion market.
You’re absolutely right when you say people in the west are more concerned with loud BS than working hard to improve. And right again when you say we should not care about it and profit from the collapse.
I personally love when a crisis comes because if you do your homework your investments will skyrocket really fast.
John C
Posted at 12:02 am, 11th October 2017Hey Caleb do you think you will ever write an article on what the world will look like after the Chinese Civilization becomes number 1?
I just finishing listerning to Vox Day Periscope and he mention while talking about the culture war the changes in Hollywood that the Chinese are coming in. One of the efforts will be the Chinese will not care about the Jewish Holocaust since they killed 50 million of their own people in a more recent history. But from what he say it will come with it’s own problems.
For one I think we will see more movies like Warcraft and Star Wars 7 over then a E.T. the Extra-Terrestrial, Lords of the Ring or Star Wars (1977).
https://www.theverge.com/2016/6/13/11924774/warcraft-movie-box-office-record-debut-china-sequel-hollywood-future
https://en.wikipedia.org/wiki/List_of_highest-grossing_films_in_Canada_and_the_United_States
John
Posted at 09:43 pm, 12th October 2017Working with China could be difficult for a Westerners. They usually like to only do business with each other.
Caleb Jones
Posted at 01:17 pm, 13th October 2017Depends on what you’re selling. If you’re selling products, then I agree. If you’re selling business services, my experience is that many Chinese actually want Westerners since many perceive (correctly or incorrectly) that they bring an extra level of business expertise or connections.
Such a thing would be pure speculation on my part, essentially fiction.
As always, if you live an Alpha 2.0 life, it won’t matter.
Throughfare
Posted at 10:30 am, 21st October 2017This article lays out why China will be the next superpower. China has gone public with its 30-year plan. What was left out of Xi’s speech was the fact that China also has a 100-year and a 300-year plan.
These people are not farting around (unlike the USA, and other airheaded western countries.)
Historically, successive Chinese governments have always had plans on these kinds of timelines. For example when emperor Wen started construction of the grand canal in it’s present general course around 590 AD or so, he knew it wouldn’t be finished in his lifetime, and a massive corps of engineers and bureaucrats was appointed to maintain long-term project continuity, overseeing an army of workers that varied from 2-5 million.
Now that the insane regime of Mao is gone, and China has reverted to its traditional form of government, they are going to achieve things that will shock people who don’t pay attention to history.
http://www.news.com.au/finance/work/leaders/chinas-30year-deadline-to-rule-the-world/news-story/70f62a5bc0e4580b83d5ca89a2479e94
BTW- ignore the BS from the academic fool later in the article. This guy has no clue, but the info at the start of the article is good.
Anyone who’s interested in an English-language book about China’s seriously long term planning might enjoy this book: The Hundred-Year Marathon, by Michael Pillsbury, 2015
Gordan Dan
Posted at 06:54 am, 26th September 2018True, yes.
But keep in mind to who is that debt owned?
To the central bankers and their money out of thin air.
Russia, CHina and some other nations will produce their own money, or they have a thught control over central bankers, while west is OWNED by those insane yet smart individuals.
West cant wake up because its population is so heavily addicted to life in debt…
Anon
Posted at 08:14 am, 26th September 2018The average Russian has debt equal to about 5 months worth of income. Russian banks’ interest rates are in the double digits, mind you.
Zaty Maty
Posted at 06:42 pm, 20th November 2018Yes That is correct , China is the factory of the world , the biggest market in the world , the highest IQ levels in the world according to western resources , the richest country in the world , the highest economic growth in the world , what else they need to rule the world ?