CitiGroup: The End of Pax Americana, With No Replacement in Sight

 via Disinformation:

Just a few days ago, CitiGroup released a new report that reads like an alarm klaxton sounding the end of the current geopolitical world order, with nothing but chaos to follow. Indeed, the “banksters” are admitting that everything we thought we knew about how the world operates is either wrong, or coming to a jarring end. The report is centered around the idea that “Pax Americana” has either already ended, or is in its final death throes.

“Pax Americana” is the term often used to define the (previously) current geopolitical order. That the general peace and stability of the Post-WWII world is due to America’s dominant economic and political power, backed up by its ridiculously large military. In its analysis, Citi is certain that the Pax Americana era is over, but the main problem for the future is what they’re calling the “Great Power Sclerosis.” In other words, there’s nothing to replace Pax Americana, other than chaos, disorder, and a great many panicking investment bankers.

The full PDF of the report, “Global Political Risk: The New Convergence Between Geopolitical and Vox Populi Risks, and Why It Matters” is available here, and I encourage all to take the time to read its 70+ pages. Because, there are times when the pragmatic warnings, predictions, and fears of those advising investors are very important to we, the skeptical. This is most certainly one of those times.

Some key excerpts follow…

The report begins with:

"2016 has begun, as 2015 ended, amid a significant worsening of the global political climate and along with that, considerable volatility in financial markets. Investors and businesses are increasingly aware of the need to understand the drivers and the implications of a greater level of event risk exacerbated by shifting social patterns.

Well, tell us something we didn’t know.

In the section titled, “Is This the Dawning of a New Era,” with regard to the death of Pax Americana:

"What’s more, we see little sign of this trend of political risk cutting across advanced and emerging economies reversing. We think it’s unlikely that the moderate global growth that Citi’s economists forecast as their central scenario will dampen these risks. If anything, the data we have analyzed for this report, combined with our combined expertise in comparative political science and international relations and security and defense analysis, underscores how, by many measures, these risks are on the rise and indeed could endanger even the already modest prospects for global growth
In other words, translated from investor-speak; put on the air mask and assume crash-landing position.

And invocation of the dreaded, “Black Swan”

"In our view, political and business leaders will need to be more attuned to the new shape of global political risk, a paradigm shift that means that previous policies will fail to keep pace and uncertainty will remain high, with the potential to interact in unexpected ways. Among the key implications of this more fragile and interconnected risk outlook is that so-called Black Swan events — in this case, geopolitical events producing instability spanning several orders of magnitude — may be both more likely and more difficult for leaders and global financial institutions to resolve.

The Black Swan theory was developed by Nassim Nicholas Taleb, as the disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology. The 9/11 attacks are a prime example of a Black Swan.

The report closes with this bit of doom-porn:

"Over the long-term, failure to devise policies to address middle class anxiety and declining living standards increases the likelihood that Vox Populi risk — including mass protests and government collapses — could move from being episodically disruptive to systemic, undermining globalization in the process. And we are deeply concerned that the political capital necessary to stem the refugee crisis and terrorist threat, perhaps best-characterized as the collision between previous foreign policy failures and current governance capacity, exceeds that available to government leaders, who have relied upon central banks to manage the lion’s share of global crises over the past several years. 2016 could be a very political year for markets.
Overall, the report is an excellent analysis of the condition our condition is in, which isn’t good by any measure. It’s very enlightening read, and worth your time.

In All Chaos There is a Cosmos – Carl Jung

“In all chaos there is a cosmos, in all disorder a secret order. Every civilized human being, whatever his conscious development, is still an archaic man at the deeper levels of his psyche. Just as the human body connects us with the mammals and displays numerous relics of earlier evolutionary stages going back to even the reptilian age, so the human psyche is likewise a product of evolution which, when followed up to its origins, show countless archaic traits.

A more or less superficial layer of the unconscious is undoubtedly personal. I call it the “personal unconscious.” But this personal layer rests upon a deeper layer, which does not derive from personal experience and is not a personal acquisition but is inborn. This deeper layer I call the “collective unconscious”. I have chosen the term “collective” because this part of the unconscious is not individual but universal; in contrast to the personal psyche, it has contents and modes of behaviour that are more or less the same everywhere and in all individuals.

The great decisions of human life have as a rule far more to do with the instincts and other mysterious unconscious factors than with conscious will and well-meaning reasonableness. The shoe that fits one person pinches another; there is no recipe for living that suits all cases. Each of us carries his own life-form—an indeterminable form which cannot be superseded by any other.

We are living in what the Greeks called the right time for a “metamorphosis of the gods,” i.e. of the fundamental principles and symbols. This peculiarity of our time, which is certainly not of our conscious choosing, is the expression of the unconscious man within us who is changing. Coming generations will have to take account of this momentous transformation if humanity is not to destroy itself through the might of its own technology and science.

My interests drew me in different directions. On the one hand I was powerfully attracted by science, with its truths based on facts; on the other hand I was fascinated by everything to do with comparative religion… In science I missed the factor of meaning; and in religion, that of empiricism.

Everything that irritates us about others can lead us to an understanding of ourselves… We should not pretend to understand the world only by the intellect; we apprehend it just as much by feeling. Therefore, the judgment of the intellect is, at best, only the half of truth, and must, if it be honest, also come to an understanding of its inadequacy.

Motherlove… is one of the most moving and unforgettable memories of our lives, the mysterious root of all growth and change; the love that means homecoming, shelter, and the long silence from which everything begins and in which everything ends. Intimately known and yet strange like Nature, lovingly tender and yet cruel like fate, joyous and untiring giver of life-mater dolorosa and mute implacable portal that closes upon the dead.

Mother is motherlove, my experience and my secret. Why risk saying too much, too much that is false and inadequate and beside the point, about that human being who was our mother, the accidental carrier of that great experience which includes herself and myself and all mankind, and indeed the whole of created nature, the experience of life whose children we are?

The grasping of the whole is obviously the aim of science… but it is a goal that necessarily lies very far off because science, whenever possible, proceeds experimentally and in all cases statistically. Experiment, however, consists in asking a definite question which excludes as far as possible anything disturbing and irrelevant. It makes conditions, imposes them on Nature, and in this way forces her to give an answer to a question devised by man. She is prevented from answering out of the fullness of her possibilities since these possibilities are restricted as far as practible.

For this purpose there is created in the laboratory a situation which is artificially restricted to the question which compels Nature to give an unequivocal answer. The workings of Nature in her unrestricted wholeness are completely excluded. If we want to know what these workings are, we need a method of inquiry which imposes the fewest possible conditions, or if possible no conditions at all, and then leave Nature to answer out of her fullness.”

~Carl Jung~


https://creativesystemsthinking.wordpress.com/2014/03/06/in-all-chaos-there-is-a-cosmos-carl-jung/