You probably missed this news story. Luis Juárez Texis, the director of Campus 01 “El Sabinal” at the College of Bachelors in Mexico, has been accused of breaking the basic human rights of his students. His “crime against humanity” was that he made his high-school students wear cardboard boxes on their heads to block their peripheral vision and prevent them from copying on an exam.
Actually, “tunnel vision” or not being able to see anything except what you want to see that is right in front of you is the new standard of thought in the 21st century. Most commentators have a cardboard box over their heads and this is easily found with the conversation about the “Trade War.”
It is hard to keep track of all the comments from the near unlimited number of geopolitical and geo-economic experts. I am old enough to remember when long months ago China was the most evil manifestation of a nation with its moves for Asian if not global domination because of its actions in the region. Now, apparently China is the oppressed victim of a ruthless plan by President Donald J. Trump to destroy not only China’s economy but the world’s economy, as well.
Of course, as I said before, as this is a “war” of sorts, there will be a winner and a loser when one side “surrenders” except that is not going to happen any time soon as both “armies” have the resources for a long war of attrition.
The world was a better place—or at least easier to figure out—when the Cold War between the United States and the Soviet Union was in full swing and China was not on anyone’s radar. But now the Chinese Dragon has joined the American Eagle and the Russian Bear. While the Eagle and Dragon are going at it, the hidden winner of the trade war may be the Bear.
In order to put balance back to the geopolitical scene, it would be in the best interest of the US to take out one of the others. The Obama administration tried hard to knock Russia out of the picture after the Russian annexation of Crimea.
Unfortunately, terrible foreign policy moves in the Middle East including trying to buy Iran out of the nuclear arms race and regime change in Syria made Russia a big winner.
Obama’s “pivot to Asia” after his Middle East disaster was only talk and allowed China to take over the South China Sea. And, then as now, Russia is the winner from the China-US trade war.
Both the US and Chinese economies are fragile in many ways for many reasons. China still desperately needs the US consumer market, and despite the wide trade imbalance, the US needs to sell agricultural products to China.
While the Russian economy is about the same size as South Korea and smaller than Canada and Brazil, it is one of, if not, the strongest economies on Earth. Russia’s foreign debt is almost nonexistent—lower than Denmark at $484 million. The Philippines’s foreign debt is small at $78 billion.
Russia’s government debt-to-GDP ratio is 13, the same as the Cayman Islands. It has the eighth-highest trade surplus in the world. Even with its low GDP growth rate, it is higher than Singapore and Germany.
While the Dragon and Eagle battle it out, the Bear just keeps moving forward, selling oil to China and Europe, and building its domestic manufacturing industries so it does not have to depend on anyone else. You have to look outside the cardboard box to genuinely understand what is going on in the world.
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.