World War III

I think we shouldn't dismiss this probability of war. I first heard this idea from Barton Biggs, when he published his book in 2007 or 2008.

There seems to be trends showing some signals of an increasing probability. This may become the next non-financial Black Swan event.

A particular signal is the rapid deglobalisation occurring in the world. After decades of globalisation, where everyone depends on each other for growth, a war is a disincentive. However, signals such as the increase in political stances to the left wing are rapidly revealed in the news. One, such as Malaysia cutting work permits by 70% may be a small issue. But massive indicators such as "Buy America" could lead to serious protectionism between nations.

The political tensions between USA and China is increasing becaue of their borrower-lender relationship. The US has been attacking China on their currency valuations. Meanwhile, the US is borrowing more money from China. The US cannot borrow forever but it has to. I do not believe that they can head back to decrease their total debts.

If China stops lending to US, the US can have a massive devaluation of their currency, thus decrease their worth of liability, or, be officially insolvent. This will spark tensions unseen for decades.

Other than these countries, all other countries are also heading to protectionism.

Beware.

Silk - Ryuichi Sakamoto