Game of (economic) Thrones

Suzhou, Jiangsu Province, China 2017.

Did any of you have the chance to watch the series “Empires of Silver” yet? I have been watching the first few episodes on my recent Singapore Airlines flights. Overall I thought the tv-series/documentary was pretty well done, with very pertinent content considering the trade ‘wars’ that are currently being waged.

What caught my attention about the show:

  • Sponsored by Eastern entities. Why would they?
  • Made for Western audiences. Again, why?
  • Discusses trade imbalances during last days of the Qing dynasty, a global silver shortage (due to imbalanced trade flows to China) and how the west used opium to try and balance the deficit.
  • Touches on what happened when China decided to stop the importation of opium.
  • Makes mention of China’s deep ties with global economies back then, and influence on the west by having deep personal/business relations between chinese businessmen and prominent figures from the west.
  • Goes in detail about how much the Chinese actually align with a hard currency as a culture (which happened to be silver back then)

What I found interesting were the number of analogs to the present day we find ourselves in:

  • Global shortage in trade currency (It was silver back then, USD today), albeit for different reasons compared to the present day.
  • Western powers balancing trade by forcing non productive exports upon surplus countries (US treasuries today, opium back then).
  • Surplus countries stopping importation of useless goods (Opium then, US treasuries now) and the subsequent instability that follows.Luke Gromen from Forest For The Trees has been calling this well for ages.Foreigners are saying No to US monetary opium
  • Guess what? China is hoarding hard international trade currency again. This time it is Gold. See below:
The trend is pretty strong here.

I wonder how the recent launch of Shanghai gold futures by the CME group plays into all of this. Gold futures denominated in yuan, traded on the shores of the US of A! Internationalisation of the yuan has been repeatedly called for by figures on both sides of the aisle. Looks like it might finally be accelerating.

Went live 3 days ago!

This time, maybe, when China starts to become THE centre of global trade as they were before, they might be able to sidestep their previous problems.

China will have stronger networks with foreigners via the belt and road initiative (OBOR). They will probably have the ability to build trade surpluses without gumming up world trade (Gold in China stays in China by law, while foreigners can swap CNH (offshore yuan) for Gold offshore or for other Chinese goods and services). Also, China will navigate the coming period with caution rather than hubris.

So what is the next move that global players might be moving towards?

I know that not everyone is a big fan of Mr Keynes, but maybe his ‘Bancor’ idea from 1940 might have caught the imagination of a few powerful figures? See PBOC comments from 2009 and other interesting developments:

  • PBOC’s Yi Gang joins trade talks in US? When was the last time the Fed’s Jay Powell went to China for trade talks? 😉

In any case, this TV series is another sign that they are not going into this new phase without having thought it all through. They might not pull it off, but it all seems at least calculated.

They wouldn’t want to be like a bull in a china shop would they?

JN

Why. 为什么。

The word ‘Why’ usually ends with a question mark.

In Mandarin, the translation for ‘Why’ is actually made up of 3 characters, Wèi shé me. It literally means ‘for what’.  In other words, ‘what are you doing this for?’.  It brings a sharper focus doesn’t it? The perspective to the question asked becomes starker.

What if we tried something different?  What if we started using the word only with a full stop at the end. Just as Simon Sinek says, always start with why.  In other words, have the answers to all your whys before you set sail. Whatever you do, the attitudes you take, the relationships you build, try and start with that powerful word.  What are we doing this for? What are we sacrificing to attain this?

Not knowing our whys mean we have to navigate through our path of life without a compass, unsure and afraid. Knowing them brings direction, motivation and inspiration.

The Paradox That Is Time

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Time has to be one of the most paradoxical things that we all have an intimate relationship with.  On one hand, it has tremendous value as nothing can be done or achieved without it.  Yet, we struggle to truly understand and leverage its value as we do not consider it scarce.  The two minutes we kill by watching a cat video is soon replaced by two more.  How do we harness this resource? 

We all know that we get more value from the hour before a deadline than the hour after it. But! Not so simple!  Much like other commodities such as gold and oil, time is truly fungible.  A minute spent waiting for your final grade at the university of Shanghai, China lasts exactly as long as 60 seconds spent gazing at the Teletower on Alexanderplatz in Berlin, Germany.  So why the difference?  And how do we ensure that we make the most out of our time?

The interesting thing is that we almost always initially and erroneously feel that we have infinite time (and therefore do not value it), until we are faced with the reality that we don’t.

Managing Our Relationship With Time

I am convinced that the formula to a life worth living is dependent on our relationship with time.  If we distill our thoughts and actions down to their rawest of motivations, we see how each moment was viewed either as a precious resource, or a painful reminder of our potential that we need to escape from.  How we consistently treat these little packages of time over our years lead to drastically different outcomes. 

Oscar Wilde doesn’t think we can kill time without injuring eternity.  I hope we heed his advice.