G. 20 and the Balance of Power
It is clear from the reports of goings on at the G.20 that the balance of economic power has shifted away from the United States. The condition of its own economy, the fact that it was at the heart of the global financial crisis and the fact that the Asian economies are doing so much better (and have all the cash) has ended an era. It is not likely to return.
Britain has always had a trader’s instinct, this is how and why it built its Empire. It now has a monetarist government, busy slashing government spending and size. It is following a different fiscal path to the U.S., which unusually is led by a left of centre administration, so the U.K. is much closer to understanding China’s position. Germany has emerged from the crisis as the economic power of Europe, which it will progressively dominate financially, not least because it has spotted that the balance has shifted to Asia. This is why its factories are on overtime exporting cars to China.
How this is going to pan out for America remains to be seen. It is a country of unmatched potential and resilience, but is politically not only divided and divided within the divisions, but suffering from a lack of confidence driven by uncertainty. At the moment it is not calling the shots. That is a new experience for all Americans alive today.