I'm halfway through a book called Wake Up! Survive and Prosper in the Coming Economic Turmoil. Despite surprisingly few (and poor!) reviews on Amazon UK, this book is by two British-based authors, Jim Mellon and Al Chalabi. (The reviews on Amazon US are better, but still few.)
Call me a sucker for doom-mongering, but so far I've found the book both educating and enthralling. The author's central themes, from what I've read, are:
- China will become a world superpower within the coming decade
- Many Western countries, but particularly the US, are severely over-borrowed
- The world economy is heading into a dramatic deflationary period
- An energy crisis looms
- Geopolitics are increasingly unstable
As the authors point out, all of the information in the book can be gleaned from reading newspapters etc. But they put it together in a way that presents a compelling -- and sometimes chilling -- big picture.
The coming crisis will, they hint, bring opportunities (I guess I'll be reading about those in the coming chapters -- so far it's been pretty grim reading). Nevertheless, the authors' accounts of China's rapid economic growth has been fascinating.
Mellon and Chalabi stress that you can get anything you want manufactured cheaply in China, where the average wage is about 40 cents (US) a day. Indeed, a company I've worked with, based in the west of Ireland, has launched its own brand of VOIP phones. The ideas and marketing are generated in Ireland; the phones are built in and shipped from China.
When the authors talk about western countries living beyond their means and individuals not realising that the spending spree will have to end, I look at Ireland 2007. I glance at the newspaper reports of massive consumer debt in Ireland -- fuelled mainly by a property bubble that has recently started to make an ugly popping sound -- and see that the picture the authors paint looks very real.
Indeed, since the book was published, one of its predictions is already coming true: Mellon and argued that the US dollar was inevitably going to fall in value in relation to other currencies. We are seeing this happen, with the euro now worth $1.40 -- but the authors predict the slide will continue for a long time. (This hurts EU countries too, who need the dollar value to remain competitive, so that they can continue to export to the US.)
That this book seems to have gone largely unnoticed makes me curious. Perhaps we only want to hear good news, whether it's true or not?
Read "Wake Up!" along with Karoke Capitalism and your world-view will change. You may even see opportunities where others see crises. I know I do.