QUESTION: Marty; I remember when the Chinese central bank said they were using capital flow analysis which is your model. You said China should buy US debt directly from the Treasury and not the NY bankers. They did that in a matter of weeks. So when they say they are on the right side of history, are they talking about your model forecasting they will replace the US as the financial capital of the world? – NH
ANSWER: You have to understand that Asians believe in cycles. They are part of their religion. Richard E. Nesbett wrote an interesting book entitled “The Geography of Thought, How Asians and Westerners Think Differently … and why.” He attributed his work to a Chinese student who said, “You know, the difference between you and me is that I think the world is a Circle, and you think it’s a line.” He goes on to quote him:
“The Chinese believe in constant change, but with things always moving back to some prior state. They pay attention to wide range of events; they search for relationships between things; and they think you can’t understand the part without understanding the whole. Westerners live in a simpler, more deterministic world; they focus on salient objects or people instead of the larger picture; and they think they can control events because they know the rules that govern the behavior of objects.”
In my 40 years of dealing with governments, I NEVER had to explain the cyclical theory in Asia – only to Americans & Europeans who do think always on a linear basis. They apply this to analyses like climate change. The temperature has risen say 5 degrees in one year and they project that out and say we will all die in 7 years. NEVER does the West ever forecast cyclically – it is always linearly.
China understands cycles – we do not. They understand the rise and fall of empires, nations, and city-states. They understand that Communism failed for it tried to defeat human nature. They see the future cyclically and that is what they are saying that they will be on the right side of history. They know the West is crumbling from within. The time that the US hands that title to China on its doorstep has arrived. The West has done nothing but tries to force their ideas upon everyone abandoning freedom and they have introduced the cancelation culture. We have lost all the values that made America great. Unfortunately, it is time for Europe and America to die the same way all empires die, by their own hand of suicide. Our Neocons have full control and want war – not peace. They think they can defeat Russia and will then turn on China. They know this, so they are strong backing Russia for their own survival.
China being on the “right side of history” means they know the United States is declining and they will step into the void. They can “feel” it with or without my models. When I met with the central bank of China, they were not bureaucrats – they were traders. When I was asked by people in the US Treasury upon my return what was it like, I responded that they only hired people with experience. They sent everyone to work on trading desks around the world and then they returned to China to run the central bank. We hire 23-year-olds from college who think they know everything.