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The Expert Who Predicted Financial Crisis | Economic Crisis | Recession  | Med Jones, The Expert Who Predicted Financial Crisis | Economic Crisis | Recession
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The New World Order

An exclusive interview with Med Jones.
 the expert who predicted the financial crisis

The Expert Who Predicted Financial Crisis | Economic Crisis | Recession

CEO Q > During your keynote speech in Geneva, you spoke about the New World Order and the decline of the US empire. What does this mean to American and global investors?

Med Jones > The crisis challenged the existing global economic and geopolitical landscapes. In the next decade or two we will see a major shift of wealth and political power from the West to the East. A few years ago, most analysts would have said that the US is the world’s sole superpower and will remain so for the next century. Some US think tanks were planning global domination.

Power follows money. The US is buried deep in debt. Most of the current economic growth and GDP figures are debt-driven.

The decline of the US Empire has begun. However, unlike the doom prophets who exaggerate with their predictions of a total collapse and civil war, I do not see that happening anytime soon. The decline does not mean the total collapse of the US. The US will remain an influential player on the world stage but will not control it -- just like the UK is still a key player on the world stage, but it is not an empire anymore.

Currently each of Asia and the US have a share of the world’s economy estimated at 28%. If the trend remains the same, in about 20 years, the US’ share could be reduced to as low as 20% while Asia will increase its share to as high as 40%.

CEO Q > Isn’t that a very grim view of the future of the US and a bit out of the mainstream?

Med Jones > When I predicted the crisis, I was not in the mainstream, when I predicted the recovery I was not in the mainstream, so I'm used to it. Truth tellers do not usually win popularity contests. The duration of the interview does not allow for a detailed analysis of why I believe so, but I can share with you a few anecdotal evidences:

  • The move after the crisis from G7 to G20, thus expanding the member countries for setting the global economic agenda and influencing IMF monetary policies.
  • China, Brazil, and Russia started calling for a new global currency to replace the US dollar for international trade.
  • Some might argue that the US debt is not an issue. Italy and Japan have ratios of 110 and 217 respectively. My answer is that they are not superpowers! Japan’s economy has been suffering for 10 years trying to get out of the 1990s; they call it the lost decade.

There is a new world order taking shape
 

 

CEO Q > But the US still has the most powerful military in the world?

Med Jones > Military power is important, but money matters more. Remember the USSR! Their military power did not prevent their socioeconomic and political collapse. The US cannot financially sustain its current economic and foreign policies, military bases, and wars, they are too expensive and will bankrupt the treasury.

History teaches us that all empires fall first from within. The wrong policies of the ruling elites led to the bankruptcy of their central banks and eventual decline. That is what happened to the USSR, and before them, the Great British Empire, the Ottomans and so on. The best way to preserve your power is by not using it. The best way to grow your money is not by spending it, but by investing it. Unfortunately, the government is not investing in growth industries enough. The US government still thinks and acts as if it were a rich nation. The ruling elite were blind sighted by this crisis and if they remain in self-denial, they will be blind sighted by the next one. 

CEO Q > So, are you saying it is over for the USA?

Med Jones > Not at all. There is a way out of this crisis and that is through the emergence of a new production industry, such as nanotechnology, alternative energy, and biotech. A new industry will generate enough tax revenues to pay the debt and attract more capital. The auto industry led the recovery after World War II. The IT industry led the recovery after the financial crisis of the Seventies.

There are also other alternative growth strategies, such as the formation of a new North American Union similar to the EU or opening the doors to more productive immigrants. However, these controversial policies are difficult to pass, at least not in the next 5 years.

When the economy recovers, it will not be because of Bush’s and Obama’s bailout plans, it will be despite of them. It will be due to the hard work and genius of American entrepreneurs, engineers and scientists, who will rebuild the real engine of the economic growth. As global investors and world citizens, we are going through historical times. Those who do not learn from history are doomed to repeat it.

CEO Q > What about the EU’s economy?

Med Jones > I’m still undecided on the EU yet. I see a shift in its socioeconomic polices from left to right. If the leadership keeps focusing on the big picture, continues to invest in innovation, and expansion of member countries, decouples from the US, and moves toward more economic integration, then they will see more growth. If they follow the same US economic policies, or they become more conservative in their expansion and integration, then they will lag behind Asia.

CEO Q > If the future of US and the EU economies are so uncertain, where do you see growth?

Med Jones > There are several global investment opportunities; you can take a look at other economies like Australia with Debt-to-GDP of 11%, Russia’s 7%, and  China’s  20%.  Short-term, I  especially  like  investments  in Russia’s basic industries including mining, iron and gas, but you just have to be careful with the lack of corporate governance. These countries have more room to invest in developing their economies and their currency will be stronger going forward. There are many opportunities involving smaller countries with higher growth rate. Qatar, for example, has an astounding growth rate close to 14% Unfortunately few investors have access to the "global market intelligence" needed to profit from these opportunities.

Continue the Interview at:

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About Med Jones

Med Jones is the president of International Institute of Management. He is recognized as one of the few experts who predicted the US financial and economic crises of 2008. In January 2007, he challenged the US President's State of the Union Address, Federal Reserve Chairman and mainstream economists. The original warnings and predictions can be found at:

Jones is a non-partisan technocrat. He can be reached at medjones.com

 

 

 

 

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