2016: The Beginning of the End of the American Age

Yahoo! Finance has an article saying that by one measure of economic size — purchasing power parity (PPP) — China will surpass the US in 2016. That’s what’s predicted by the IMF, and it’s a lot sooner than the mid-2020s that most people thought. However, America will still be ahead of China by a different measure: that of exchange rates. The problem is that using exchange rates is flawed because China is still the Soviet Union’s rich cousin, and currency is not traded on the free market like the US dollar: it’s controlled by the Chinese state, and severely undervalued.

Purchasing power parity on the other hand, is what’s used by the CIA’s own World Factbook to rank countries in terms of the size of their economies. By that measure, the American economy was three times as big as China’s a decade ago; last year, it was about one and a half times bigger. The US has been the largest economy in the world for well over a century, and therefore the enormity of this milestone cannot be underscored enough. Before taking the reigns as the biggest economy, the only country America ever beat down was Mexico; after, Japan and Germany — at the same time. So what all of this means is that whoever gets (re-)elected in 2012 will be the last President to run the US as the undisputed leader of the world.

We could say that the British — from whom America took the economic lead at the end of the 19th century — did well for themselves… but then again, the US is as close an ally as the UK has. The relationship between China and the US however, is a much different animal — like if early 1900s Imperial Japan took over from Britain — and it will be interesting to see what the world will look like under Chinese economic hegemony. But, hopefully the Illuminati have some craziness up their sleeve to keep the West in power.

From Yahoo! Financial

3 Comments.

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