Today's Global Daily focuses on a German word about the globe: weltanschauung, or "worldview", one's fundamental cognitive orientation, encompassing knowledge, culture, theology, philosophy, politics, economics, morals, and ethics - and even what 'daily' means. For 13 years post-Revolution, France had a 12-month calendar of three 10-day weeks with 10-hour days of 100 minutes of 100 seconds. We are today in 'Duodi' in the second week of 'Fructidor', with five or six Fêtes from September 17-22/23 about to add the days needed to fit it the year into the solar system. Of course, the latter is based on the Copernican weltanschauung which replaced the Ptolemaic, where the sun revolved round the Earth. Everyone in markets has a worldview even if they don't know it or can't articulate it. For most it's a neoliberal belief that free markets work best, as selfishness creates selfless outcomes; except ESG is better; the West is best; except for China; and central banks bail us all out when this all 'mysteriously' fails. It's deeply unserious when you think about it, and an intellectually leaky weltanschauung isn't saved by the odd 'Minsky', 'geopolitics', or 'black swan' as plasters if you haven't actually read them. Worldviews can change - but usually only after a huge shock for those holding them, e.g., "You can't own land." (Native Americans) vs. "Yes, you can." (US Settlers); or monarchs vs. republicans; or republicans vs. theocrats; or pacifists vs. warriors. We've had ample evidence of that of late. Today's changing world is leaving welts on Germany's weltanschauung in particular. First a Global Financial Crisis; then austerity creating a Euro crisis, only solved with un-Germanic monetary policy; then a refugee crisis; Brexit; Trump; Afghanistan; China's policy shift; Russia's invasion of Ukraine; an energy shock; the return of inflation and Germanic monetary policy; Biden's IRA; African coups, EM wanting value-added green jobs rather than selling their minerals to Europe; and China flooding the EU with EVs and solar panels. Germany thought it understood how the world works, but didn't. Yet the real problem is they still don't have a new worldview, and are about to go full circle with a return to fiscal austerity(!) The next iteration of that cycle risks deeper disaster. The market weltanschauung is also showing welts: those managing tens of trillions of assets still "don't do geopolitics," think "inflation has peaked," and hope "rate cuts will solve this." They are likely to be as wrong as the Germans as the world around us does not sit in line with such views. For example, the recent G20 condemned war "In Ukraine," not "against" it despite no Putin, and new Chair Brazil said he can visit despite his international arrest warrant: both show the limits of Western influence. China tried to block the US hosting in 2026, and Bloomberg alleged it would demand access to Western chips as quid pro quo for help with the global green transition. That didn't occur, but what can John Kerry do if China does kick him in the weltanschauung like that? Xi didn't even attend, underlining he isn't interested in this forum, and favors a South-South global system. Let's see if the BRICS11 use more local FX invoicing, i.e., dollar-priced bilateral barter, which West African state has an anti-West coup next, and if the US letting the World Bank lend $25bn more to a Global South needing trillions -costing Washington the pocket change of $2.5bn- makes any realpolitik difference. Ironically, the G7 look more like EM now, another shock to the West's worldview. Canada's Trudeau couldn't fly home because his Air Canada jet broke down on the runway for hours! Yet steel wheels are turning - away from the past low-inflation globalization. A new US-brokered India-Saudi-(Israel?)-EU railway deal will rival China's Belt and Road, reroute global supply chains, and aim to pull Riyadh and the UAE away from the BRICS. The US has signed a Comprehensive Strategic Partnership with Vietnam - followed by reports exports of Vietnamese dragon-fruits and durian to China were halted for "quality checks". We see South Korea-Japan and US (and Australia)-Philippines defence rapprochement. Indonesia declined to join the BRICS for the chance to get into the OECD - and let's see what happens in the Argentinian election re: dollarisation. In short, dividing lines are being drawn, even if where any Potsdam-Yalta curtains may fall, and how permeable they may prove to be remains unsettled. Meanwhile, Russia will be spending 45% of its budget on the military by year-end, and is cooperating with North Korea. So is China, which the Atlantic says 'Prefers Guns to Butter.' Yet while there's money for that, there's not for much else. Our China strategist Teeuwe Mevissen's 'Debt and dilemmas' estimates local government debt alone at CNY106.7tn ($14.6tn), or 87% of GDP, so "those who are waiting for a big bazooka will
Comments
Post a Comment