1.0 A Critical Juncture in Modern History
Reality is a brutal overlord. Winning the war against the Wuhan Virus will be a long term global challenge. I believe it will take the world anywhere from one year to a year and a half to combat. A global depression alongside asset deflation and near-complete economic collapse is inevitable. This will be followed by hyperinflation to varying degrees in different countries. Meanwhile, there will be a shift in the world order as American decline becomes apparent. In its wake China will ascend.
Historians will look back on 2020 and mark this pandemic as a watershed in global affairs. This a humanitarian, national and financial crisis rolled into one. Most of all, it is a wave of entropy washing over the nations of the world. Whilst nations with high levels of national energy and deep resources will inevitably survive and enhance their relative global positions, systems in the West (America and the EU) that possess low national energy and are in the late phases of decline, will find themselves irrevocably damaged. One of the casualties of this tsunami will be the end of Western capitalism as we know it. In its wake will come a shift towards state ownership. The current official economic forecasts are, in my opinion, vastly underestimating the impact on the global and national economy.
I am hugely aware of the enormous implications discussed below. I offer them with a keen sense of compassion, combined with reality for our collective benefit as fellow humans. However, such forest fires in human affairs also offer opportunities for growth and expansion. This great shift will inevitably do just that. We seek to highlight potential areas of opportunity going forward. In navigating this great shift there are two distinct phases. The first phase features the destruction of the old world. This is where companies and institutions must swiftly adapt to survive. In the second phase a new world will provide growth for young and improved systems to ascend.
2.0 Geopolitical Cycles and the Impact of Entropy Shocks
Based on my theories in Breaking the Code of History (BTCH) describing the Five Phases of an Empire and my more recent Theory of Human Entropy. Events such as wars, pandemics and natural disasters are all high entropy events, that test human societies and national energy. Those possessing the high levels of national energy and deep resources typical of the expanding phases of a system, are most likely to prevail. Those in the declining phases, are most likely to have their decline accelerated. Examining the main entropy events over the past 100 years is very instructive:
- The defeat of Germany. The challenger was a source of entropy that, in a protracted war, could not win due to its limited resource base.
- The weakening of the hegemonic French and British Empires that were already past their peaks (Britain in 1870).
- The arrival of America as a global power.
- The end of the already declining Austro-Hungarian and Ottoman Empires.
- The collapse, reformation and birth of Russia into the USSR.
The Spanish Flu
- A catastrophic event over a duration of two years following WW1.
- There were no geopolitical consequences, as systems at the end of their cycles, such as the Austro-Hungarian Empire, had already collapsed. Thus, only the strong had survived WW1 and they were already inured to major casualties.
1929 Wall Street Crash
- This was an entropy shock, a product of America growing too fast.
- America and the new power structure remained resilient.
- Germany, after America's capital was withdrawn, collapsed. It subsequently re-formed into an expansive system which better manifested the system's growing energy and need to attempt a second expansion.
- The defeat of Germany and Japan, two challengers who were the source of entropy that in a protracted war could not win due to their limited resource base.
- The end of the French and British Empires.
- The rise of the USSR.
- The rise and primacy of America.
3.0 The Conclusion
Based on past examples of the impact of entropy shocks on geopolitics, the Wuhan Virus will accelerate the natural underlying trends in systems energies, by either accelerating expansion or decline.
- The decline of American hegemony and the associated capitalist financial structure we have known.
- The collapse of the EU.
- The expansion of Britain.
- The acceleration of the Chinese hegemonic challenge to a full on arms race
- The fragility of the Russian hydrocarbon economy and leadership
- The rise of India.
- The vulnerability of all hydrocarbon economies.
I am certain the world we have all known will not return to its former state. The younger more vibrant systems like China, are energetic in the way they fight the pandemic and in how they bounce back from its effects. Older systems, such as America and the EU, will be slower to respond effectively and coherently. The lack of CDC funding, thanks to one of Trump's early decisions, coupled with the lack of testing kits, is a good example of poor preparation.
However, all nations will be hard hit by the economic shock of a global shutdown. The relative strength of nations will be most notable in the recovery stage in regard to the relative speed of their recoveries. I suspect China will gain considerable ground on America, when the scores are analysed in the near future. This in turn will embolden China to make a potential military challenge to American hegemony by 2028.