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Thursday, July 7, 2011

CRISIS: Geopolitical Currency

How Fragile We Are...

Rise and Shine; Changing Geopolitical Currency

I believe that we need to wake up to the reality that the "underpinning and foundation of the geopolitical theme has shifted". From a theme of a wealth based on currency. From a theme where technology and media formed part of that currency, To a new theme. To a theme where wealth reverts away from technology back to core necessities. The human condition hit its peak and many suggest is now on the other side of the slippery slope. And unfortunately “exponential gravity" acts to accelerate the downward path.

Current high fashions of Facebook, Twitter and in fact most classic mediums should become increasingly less relevant. While Facebook and social media are new to the scene their value should marginalize in time. Their economic prospects dim. They are largely tools used to continue a celebrity centric culture and grease its final hysteria. Meanwhile the mainstream media is also in peril. Printed newspapers magazines and television no longer garner the litany of advertisers, as audiences fragment and dilute. Their days seem numbered. Their influence watered down significantly from past hey days.

Wealth is shifting back to core necessities and leaving technology behind in its wake. There are many reasons for this, but the driving force is that it has outgrown its utility and it will diminish even further in a world in need of scarcer and scarcer elements. These elements such as water, food, shelter, heat and oil will forge the behaviour of individuals and the behaviour of nations. The behaviour and words of the geopolitical mantra, positions and actions will change.

Look at today's geopolitical chessboard and the US is in untenable position. Oil is now the currency that is truly the key to the survival of their economy, country and world dominance. Yet the emperor’s clothes are slowly becoming invisible. Today the US consumes about 19 billion barrels of oil from the annual global pie of 88 billion. Its own reserves are estimated at 40 billion, enough for just two years. So in other words without the rest of the world's oil to consume, the American system, economy, power, currency and way of life collapses in just two short years. They know this, but so do the others in this tribal dance.

For because of it, the dynamic motivations and currency of geopolitics is reshaping to place greater and greater emphasis on the utility of essential elements that are tied more closely to the core survival needs. And as supply diminishes, more emphasis and value will be given to these elements. Countries relying on technology and industrial capacity will lose their relevance on the geopolitical chessboard where the elements of survival define the currency of the game.

Looking at Maslow's hierarchy of needs, nations treated as individuals are past self-actualization and are returning to the basic needs of existence. Power on the geopolitical chessboard will be held by those with the abundance and control of these elements. The role of technology and media will be less and less important as nations chase the remaining crumbs of the planet's proverbial table of resources.

Power on the geopolitical chessboard is shaped by the underlying nature and supply of the game's currency. As its currency's nature changes, so does its power. So does the game. Rise and shine...

T A McNeil
First Financial Insights Inc
July 7, 2011

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