CitiGroup: The End of Pax Americana, With No Replacement in Sight.

Just a few days ago, CitiGroup released a new report that reads like an alarm klaxton sounding the end of the current geopolitical world order, with nothing but chaos to follow. Indeed, the “banksters” are admitting that everything we thought we knew about how the world operates is either wrong, or coming to a jarring end. The report is centered around the idea that “Pax Americana” has either already ended, or is in its final death throes.

“Pax Americana” is the term often used to define the (previously) current geopolitical order. That the general peace and stability of the Post-WWII world is due to America’s dominant economic and political power, backed up by its ridiculously large military. In its analysis, Citi is certain that the Pax Americana era is over, but the main problem for the future is what they’re calling the “Great Power Sclerosis.” In other words, there’s nothing to replace Pax Americana, other than chaos, disorder, and a great many panicking investment bankers.

The full PDF of the report, “Global Political Risk: The New Convergence Between Geopolitical and Vox Populi Risks, and Why It Matters” is available here, and I encourage all to take the time to read its 70+ pages. Because, there are times when the pragmatic warnings, predictions, and fears of those advising investors are very important to we, the skeptical. This is most certainly one of those times.

Some key excerpts follow…


The report begins with:

2016 has begun, as 2015 ended, amid a significant worsening of the global political climate and along with that, considerable volatility in financial markets. Investors and businesses are increasingly aware of the need to understand the drivers and the implications of a greater level of event risk exacerbated by shifting social patterns.

Well, tell us something we didn’t know.


In the section titled, “Is This the Dawning of a New Era,” with regard to the death of Pax Americana:

What’s more, we see little sign of this trend of political risk cutting across advanced and emerging economies reversing. We think it’s unlikely that the moderate global growth that Citi’s economists forecast as their central scenario will dampen these risks. If anything, the data we have analyzed for this report, combined with our combined expertise in comparative political science and international relations and security and defense analysis, underscores how, by many measures, these risks are on the rise and indeed could endanger even the already modest prospects for global growth

In other words, translated from investor-speak; put on the air mask and assume crash-landing position.


And invocation of the dreaded, “Black Swan”

In our view, political and business leaders will need to be more attuned to the new shape of global political risk, a paradigm shift that means that previous policies will fail to keep pace and uncertainty will remain high, with the potential to interact in unexpected ways. Among the key implications of this more fragile and interconnected risk outlook is that so-called Black Swan events — in this case, geopolitical events producing instability spanning several orders of magnitude — may be both more likely and more difficult for leaders and global financial institutions to resolve.

The Black Swan theory was developed by Nassim Nicholas Taleb, as the disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology. The 9/11 attacks are a prime example of a Black Swan.


The report closes with this bit of doom-porn:

Over the long-term, failure to devise policies to address middle class anxiety and declining living standards increases the likelihood that Vox Populi risk — including mass protests and government collapses — could move from being episodically disruptive to systemic, undermining globalization in the process. And we are deeply concerned that the political capital necessary to stem the refugee crisis and terrorist threat, perhaps best-characterized as the collision between previous foreign policy failures and current governance capacity, exceeds that available to government leaders, who have relied upon central banks to manage the lion’s share of global crises over the past several years. 2016 could be a very political year for markets.

Overall, the report is an excellent analysis of the condition our condition is in, which isn’t good by any measure. It’s very enlightening read, and worth your time.

a reply to: SkepticOverlord

Is the author suggesting that fiscal policy and central banking has "lessened" the effects of Black Swan-events in the past, but that this is now unable to handle the stresses incurred from current global issues?

This is very important news - I think this is a "cornerstone" of the many other types of issues we are seeing in the world today. The leaders in power have been playing with fire and finding justifications to keep the current system running - our leaders and Wall Street/Big Banks /Gov. Contract Recipients have been profiting off of it for so long but now it's about to bite everyone in the arse

I agree the era of America being the biggest kid on the playground is over.

It will be interesting to see how to power shifts and what effects that has on the world. I have a feeling one day people will look back on this article and talk about how right the author was.

Obama's foreign policy approach is driven by the leftist idea that at the base of every problem in the world is America.

If this report is to be believed, then it was America that held the world stable, and our withdrawal to allow the world to be free of America and let the world sort itself out is directly to blame.

So was it evil for America's influence to have kept the world more or less stable and thus more peaceful or is it better to have the chaos we see?

I guess we're going to find out.

Soo what all that means in lame words? that we are heading for another global collapse? didn't US markets caused the last one?

Well I guess we will be heading for another roller coasted ride.

Bailout anyone?

Order out of Chaos (I know, I sound like a broken record). Pax Americana was designed to transfer money, disarm and subjugate while giving the illusion that everyone had an equal opportunity. Once the collapse occurs, we'll be begging for them to bring order and the final blow to our sovereignty will take place. You'll just have to ask yourself when the time comes if your going to follow the herd or go against the grain.

Everything is fine Skeptic. Nothing to see here.

Now back to reality...

Is it true that Citi owns 30% of the federal reserve?

originally posted by: FamCore
a reply to: SkepticOverlord

Is the author suggesting that fiscal policy and central banking has "lessened" the effects of Black Swan-events in the past, but that this is now unable to handle the stresses incurred from current global issues?

Yes.

The United States, through diplomatic activism backed up by unrivaled military power, kept many regional conflicts under control (or pacified them), such as between Pakistan and India, North and South Korea, Israel and its neighbors, and the states of the former Yugoslavia. It did not dominate world affairs in a hegemonic way (which would have been impossible even for the US), but it served as the arbiter of last resort and the world’s reserve power. After 1989, most nations buying into the post-Cold-War surge of economic globalization consumed US stability services around the world, even those who openly or clandestinely opposed America’s relative dominance.

But this fortunate power structure has changed significantly over at least the last decade. The US position in global affairs has weakened. Other powers have gotten stronger. Some military interventions, such as the Iraq war, have eroded both US credibility and resources, an outcome supported by a host of global public opinion data. Less political capital is available in Washington to underpin America’s global role, leading to a “leadership from behind” culture that is considered to be ineffective and widely perceived as US weakness. Inward-looking, isolationist leanings have gained political traction in America’s political mainstream. The threshold of what constitutes US national interest has narrowed markedly in comparison to previous decades.

And they also site this from the Pew Research Center: PDF: Global Publics Back U.S. on Fighting ISIS, but Are Critical of Post-9/11 Torture

originally posted by: onequestion
Is it true that Citi owns 30% of the federal reserve?

No.

They have a seat on the Board of Governors, but no person or entity "owns" the Federal Reserve.

a reply to: SkepticOverlord

Right, right. Board of governors!

Well, duh, who would have guessed that by offshoring millions of jobs to China (thanks Lima Declaration of 1975), that eventually there would be no more jobs left to offshore, that the Chinese population would also want to move onto "service industry" jobs just like Singapore, Japan and Korea (ie. global stock trading, international finance and tech R&D).

I guess those bankers are just going to have to get used to being treated like little people in the same way they treated everyone else.

a reply to: onequestion

That is a good question taking into consideration that behind the scenes Goldman Sach seems to be behind Citigroup. But the biggest share holder is Manuel Medina-Mora, Citigroup's co-president, he oversees Citi's franchise in Mexico.

While Goldman Sach and Morgan have ties to Federal Reserve Bank of New York , in 2009 the Federal reserve stop granting citi group credits, so I don't think they are liked to the Federal reserve.

originally posted by: onequestion

Is it true that Citi owns 30% of the federal reserve?

Goldman Sachs might own 30% of our politicians though

good bye America

a reply to: marg6043

wow, you are ON it great info

originally posted by: ketsuko
Obama's foreign policy approach is driven by the leftist idea that at the base of every problem in the world is America.

If this report is to be believed, then it was America that held the world stable, and our withdrawal to allow the world to be free of America and let the world sort itself out is directly to blame.

So was it evil for America's influence to have kept the world more or less stable and thus more peaceful or is it better to have the chaos we see?

I guess we're going to find out.

Meanwhile, back in reality, the Federal Reserve and all the banks that have perpetrated this are CAPITALIST in nature.

The most successful capitalists in the world.

America has been the great power of the world for all of 70 years or so.


A piddling time in comparison to past great powers.


America only became top dog after WWII


America, to quote big Clint, is a legend in its own mind.

And if it keeps it up will be kicked in the Hind


And keep supporting the Banksters and the other swine


Although it acts as if it is on bear and Wine


All of this points to the fact America is out of time

a reply to: SkepticOverlord

It seems to me that Western Civ, as most specifically exemplified by the rise and dominance of the US as an outgrowth of 16th century European expansionism has relied for to long on the simple meme of 'here is order and everything that does not come from or adhere to that order is chaos." This 'meme' was not created by those who follow it now but indeed from much earlier times.

By following this 'meme, indeed by it being infused within the minds of western culture for over 2000 years, that culture, having so consistently rejected and ignored Black Swans in order to maintain the stability of this 'linear progression' we now call the histroy of western civilization, has now become so calcified, so ridged that it has little to no ability to recognize the mote in it's own eye.

The established order has only accepted Black Swans that it can immediately consume or over a period of time, swing back into it's embrace. Scientific, technological, religious, philosophic memes have fallen by the way for no reason other than that those in charge of controlling the dominant meme could not comprehend them, or did, and would be forced into lesser positions of power in light of them.

For me, the way I see it, our only hope for any kind of smooth, and I accent 'any kind' transition into a peaceful world of tomorrow is for the establishment to let loose the Black Swans it may be hiding in it's vaults and let us see our possibilities beyond the control structure that has run things for so long.

I think what they are trying to say is; because of the countless geopolitical blunders, the rising defiance to banksters coupled with an emerging counterbalance that although attempts were made to undermine, appear to be gaining in strength.

No PaxAmerica? My heart bleeds for you. Does that make me self loathing? :p