Tuesday, 16 September 2008

Manic Monday and the size of the US economy

I was lucky enough today to listen to the Underground Philosopher on my way home on the district line. For those who have not had the chance to listen to him, a District line driver is nicknamed "The philosopher" because he often makes comments or dishes out advice while making his "mind the gap" announcement. Hilarious, yet surprisingly today, he made no comment on the financial crisis. It seems people really don't get the magnitude of the crisis. I tried to pickup a copy of the Financial Times this morning, but it was obviously sold out. I didn't want it for the information, I got a big information terminal at my disposal, but I really wanted for sentimental value. I had to settle for a copy of The Guardian, but, being a leftist - a social capitalist to be exact - it wasn't a big loss. Although, what also struck me, is the lady at the counter, who, when she told me it was sold out, she asked : "what does it have? Jobs?" and I said "No, loosing jobs." This is supposedly "Manic Monday" , although I was disappointed that no one jumped from the Lehman building in Canary Wharf. Maybe they should throw Richard Fuld , in a "thrown out of a strip club" manner. Would make my best friend happy...
Anyway, people seem to be missing the point. Not long ago, I was discussing the idea that the balance of power is shifting East. True, although, it won't be happening as fast, nor will it be a smooth transition. That lady at the news stand, works in a shop next to Burger King, one of the symbols of America, the hamburger.

I'll cut to the chase.

Three hundred million US citizens, still consume more than 1.3 billion Chinese people. The world economy , is overall, revolving around consumption. i.e. Oil (I hate using this word, because it is the least of our worries) , heavy industries, transport, etc... all these are working towards the same goal : the burger eater. I say burger eater in reference to two things : 1. Burger eater as in the consumer, who, to eat his burger, will need to wear clothes, drive a car, live in a house, before he could get to his burger. 2. I specifically call him burger eater, because, although we are all "eaters" or consumers, Burger eaters - Americans - are the biggest consumers. Again, I may be using the KISS principle loosely, but, as long as that "burger eater" is still the focal point of the world economy, the balance won't shift, and it won't be even starting to shift, for the next 5-10 years. I can't imagine what will happen, but the idea of having "Curry King" and "Rice Man" at every corner, scares me. ( I have bad aptitude to spicy food - except when drunk). More on mass consumerism soon - hey, it's directly related to the Middle Easy - booya!

I got bad news for Europe though. The balance will shift, but it won't be shifting gradually, but rather it will jump right over the old continent to Asia. Keep out alcoholism out of the equation, the Europeans simply don't have the numbers nor the consuming capacity to compete with the Americans, and they are more likely to shrink in numbers than get anywhere near the nine digit number of people. Anyway, I believe in history, and they had their turn in the rota.

But why the financial crisis will bite us in the ass hard for the few coming years? Well, the economy of the United States is , if not already there, at the verge of recession. If the Americans stop being able to pay for those burgers, well, imagine every McDonalds and Burger King in the world closed down. That's how its going to affect the common man, everywhere in the world. Think of it this way, you are coming home, drunk and hungry, and there is no McDonalds open to service you. Until those Curry Kings start springing up and staying open 24 hours, we all going to have really bad hangovers.

If you're a Londoner or a New Yorker, you'll get what I am saying....and those are the world's financial centres (at least for now).

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