I believe that the times ahead will be radically different from the
times we have experienced so far in our lifetimes, though similar to
many other times in history. I believe this because about 18 months ago I undertook a study of the
rises and declines of empires, their reserve currencies, and their
markets, prompted by my seeing a number of unusual developments that
hadn’t happened before in my lifetime but that I knew had occurred
numerous times in history. Most importantly, I was seeing the confluence
of 1) high levels of indebtedness and extremely low interest rates,
which limits central banks’ powers to stimulate the economy, 2) large
wealth gaps and political divisions within countries, which leads to
increased social and political conflicts, and 3) a rising world power
(China) challenging the overextended existing world power (the US),
which causes external conflict. The most recent analogous time was the
period from 1930 to 1945.
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