The recession is over… or is it? – Wars and Conflicts
In the fractal-lattice-nodes theory for the world economy we do have abilities to explain and predict specific political actions. I am not going to follow a naïve approach to politics where people say that politicians, parties, etc. decide the way the world is developing politically. To make thinks clear – economy defines politics, the “shadow government” is not a group of conspiring individuals but actually the whole structure of the global economy. But it is also clustered, remember? Therefore if we do think that the governments and financial institutions form the highest cluster, then some of the governments and financial institutions go above that and form “superhigh” cluster. We do consider cluster to have about 10% deviation in number of viable connections, but pure math is not going to be presented in this study.
At the beginning with all this derivatives and inflated property prices the extra connections were created based on the artificial pricing model. Further you go, more price increase is needed to support more connections. But there is a stage when initial saturation is reached and price can not go any further. Meanwhile connections in the top clusters are multiplying.
First serious signals that further increase in price (by the way, real estate is just part of the whole system and I am referring to it to simplify the situation. In fact in includes all main wealth-generating systems e.g. natural resources, commodities, land, etc.) is not supported from inside the system was received at the beginning of the century. Please note, this happened many times before in the similar way but we are applying our theory on the recent events.
Now let’s see where the real new wealth-generating areas are: Middle East (oil), Far East (manufacturing, resources). Now, the generated wealth should be drawn out of the region to support price increase. To achieve this goal the instability should be created somewhere in the region. This instability would redirect the wealth flow to the most stable regions “supernodes” and therefore apply an extra demand on the market naturally increasing prices. In simple words – if you have a war at your doorstep you would not, most probably, buy a house in the area but go and buy it in stable prosperous region. To make this flow constant the conflict should ideally be long-lasting without any feasible solution. Now watch the news and see for yourself.
But the theory wouldn’t be a theory if it’s not predicting something. There is another high node on the way – South America. This node can start drawing wealth streams away from supernodes and create extra connections. Therefore demand would drop; prices would go down and number of connections and everything would go in circles. Based on the above, the instability in the region would be required rather sooner than later.
About wars: war is a redistribution of assets, wealth and influence. War destroys assets in one area therefore making assets in other areas more valuable.
I am writing all this and thinking, human tragedy our days is being reduced to an inevitable set of economic rules. And this is one of the saddest things around. But this concept was working from the beginning of the humankind.
But at least theory gives another prediction, which is slightly reduces the impact of the above. It is not going to be a WW III. The complete destruction of the clusters, including the top cluster and breakage of all links it’s not the tendency of the system. Politicians may tell you anything, praise public, themselves, society – it’s not as important as the system is not allowing self-destruction. After the global economy became reality, number of connections broken as a result of global conflict would destroy all clusters. Local instability is part of the system, but global destruction is not what the system needs.
…to be continued
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