The Plan
Page 79
As the year end approached, Fitzwilliams, for the first time in three years, felt more optimistic. Little by little, step by step, the sub-prime crisis had been attenuated, and the question of sovereign debt seemed to have been settled. In all, the crisis seemed to have run its course and things would slowly right themselves. As for his bank the road had been rough, but the changes brought about by the crisis had benefited what was now the INI Banking Corporation.
The Chancellor promised a growth of almost two percent for 2011, recovery was on the books and businesses were again functioning normally. On the continent Germany was again in the black, its exports booming. The IMF forecast world growth at around four percent for the year to come, though it was not optimistic for the Club Med members of the EU.
John Francis saw things differently. His problem was not to interpret the events of the past three and a half years, his was to try to predict what the next three and a half years would bring. The crisis was looking less dangerous, though perhaps they were simply in the eye of the storm and when its force struck again the destruction would be even worse. There was the risk that the storm would return in the form of a more severe sovereign debt crisis, more specifically centred on the euro.
There were many theories and explanations bandied about by the experts, amongst them was the notion of super cycles. According to United Nations’ economists, these were composed of upswings of ten to thirty years, with full cycles ranging from twenty to seventy years. This vision was based on the observation of commodities, and more notably the demand for metals.
They concluded that the relationship between metal prices and world GDP followed a similar pattern. This explained the ongoing super-cycle conformed to type, driven almost entirely by industrial expansion in China and emerging markets, which in turn drove the boom in commodity prices. This cycle could only last if China was capable of disconnecting from the long period of slow growth forecast in developed economies, which seemed highly unlikely given China’s dependence on exports, which meant the world was looking at a long period of stagnation, if the theory proved to be correct.
After his recent visit to China, Francis was less concerned about China’s specific case, or its tug of war with the West. What troubled him was the changes man was making on his natural environment and how they would affect the West’s economy, and more precisely Fitzwilliams’ bank in the coming years.
In an even larger picture, his eminent colleague at Stanford University, Ian Morris had just published his book entitled Why the West Rules…for now. As an archaeologist, classicist and historian, Morris had set himself the ambitious goal of trying to understanding the future through the past.
The historian’s conclusions were less complacent than the Imperial Chinese encyclopaedists who had produced the Complete Collection of Illustrations and Writings From the Earliest to Current Times, published in 1726 during the Qing dynasty, who attempted to document ‘everything under heaven’ in over five thousand volumes, eight hundred thousand pages, and one hundred million Chinese characters.
Morris’ conclusion went beyond specific cases and focused on the problems facing humanity as a whole. Which seemed to Francis more important than the result of the race between the West and its competitors. Whether the Chinese economy overtook the West did not change much for Fitzwilliams' bank, which could continue to function and make money. On the other hand the appearance of Morris’ Five Horsemen of the Apocalypse: climate change, migration, famine, epidemic and state failure spelled chaos, threatening the entire planet’s economic well-being.
Francis could only agree with the idea that man would end up being punished by the gods, as had Prometheus, for stealing fire from the heavens for men. He feared that mankind in its unsustainable race for growth and development was in effect playing with fire.
Nuclear proliferation, population growth, energy consumption, food demand and climate change were in the process of fundamentally changing old historical patterns. A watershed separating the past from the present had been reached and what happened next was unpredictable.
Francis feared that the historian’s conclusions were prophetic: a choice between ‘Singularity’, salvation through collective governance, and ‘Nightfall’, a world of Mad Max.
Mankind was perhaps facing a turning point, one that was totally different to historical choices and where geography and civilization were totally irrelevant, where one false move, by a mad dictator, could lead to Götterdämmerung. The question was where and when?
Chapter 79 THE CRISIS HITS EUROPE