當今世界上最大的三個潛在性的經濟災難

The most productive questions we asked ourselves were “What could go wrong in 2011 and beyond?” and “What can we do about it?”  Of the many possible disasters that emerged, here are my top three candidates.

Risk #1:  Germany and the euro（德國和歐元）.  Germany is the strongest economy within Europe at the moment.  Ironically, it's also the nation that would suffer the worst from any break-up of either the EU or the euro. 

This is more than just a case of “the bigger they are, the harder they fall.”  We’ve said before that Germany's greatest advantage today is its participation in the euro.  Having its currency tied to many smaller and weaker European nations effectively gives Germany the most undervalued currency among developed nations.  In terms of the German economy, the euro is more undervalued than even the Chinese yuan.  Such a cheap currency gives Germany an edge in selling exports to other nations.

Of course, whenever you take advantage of a situation, you become vulnerable to any change in it.  Germany has certainly taken advantage of the weak euro: Exports now make up 40% of the German economy and virtually all of its growth is export-driven.

If the euro were to break up, Germany would be forced to adopt a new currency that would be valued fairly on the world stage.  Its exports would plunge, sending its economy into a deep recession.  Such an event could provoke disharmony if not separatist movements among the 16 states that make up the German republic.  (Let's recall that economic illness in Germany once led to the rise of Hitler and World War II.)  The risk is that a serious German recession could cause a return of the pre-Bismarck era when competition among states made war commonplace within Europe.

Equally worrying is Germany's trade balance with China.  Before 2009, China was the only significant country with which Germany ran a deficit.  Now that deficit has become a surplus, but the change is not a positive, since it is the result of Germany's decision to sell high-tech goods to China.

As has happened before, China will likely seize upon the opportunity to re-engineer Germany's technology, create its own high-tech product lines, and export them at cheaper prices.  Germany could then lose another big advantage.

Of course, neither of these potential events would be worse for Germany than the break-up of the EU itself.  We doubt this will happen, at least not for some time, because it would take a policy mistake of gigantic proportions.  The member states have a strong motivation to keep the EU together and avoid the depression that would surely follow.  Nonetheless, mistakes have been made before.

Risk #2:  Oil（石油）.  As we pointed out last week, rather than thinking about when the world's oil will run out, we should instead think about when supply/demand pressure forces prices to escalate.  Looking at oil prices as a function of demand, we see a curve that is notably convex.  That is, every small increase in demand or small drop in production leads to a sharply higher oil price.

 For instance, today we have a short-term interruption of the Trans-Alaskan oil pipeline which affects less than 1% of the world's oil supply.  Yet it has resulted in a 1.5% jump in oil prices.

 Any unexpected increase in oil demand from China or the other developing nations, or another unexpected drop in production, could send oil prices to the moon.  It would be a replay of 2008, with an equally disastrous deflationary end.

 We assume you are well enough off to withstand a jump in gasoline prices without a serious decline in your lifestyle.  However, there are millions of Americans with incomes under $60,000 a year who could not tolerate $5 a gallon gasoline without cutting back spending in other areas.  Falling consumer spending could spell curtains for the recovery.

 Risk #3:  Loss of the American Dream（美國夢的破滅）.  Though we talk a lot about China, it’s only because we love America and hate to see other nations taking the right measures while our leaders fall behind in their duty.  Recently, two articles in the New York Times made us aware of yet another area where the U.S. is missing the boat that China is catching.

 The first article discussed how much easier it is for a young person to get into a top U.S. college if one of their parents went there.  In fact, the legacy advantage gives people a 7X greater likelihood of admission. 

 We need not remind you that the American Dream was that anyone, regardless of their background, could achieve success through hard work and/or natural talent.  It was the dream of creating a meritocracy, where the biggest rewards go to the individuals who most deserve them.  By contrast, the legacy advantage rewards people for simply having the right parents.  It is a step towards creating a hereditary upper class, or a plutocracy – exactly the opposite of what America is all about.

 China, on the other hand, doles out opportunities to young people according to how well they score on tests.  The second NYT article, written by Nicholas Kristof, discussed Hou Yifan, a 16-year-old Chinese girl from a poor background who is now the top female chess player in the world.  Hou's talent was supported by training and financing from the Chinese government.  Kristof's point, which we agree with, is that China invests in talent, regardless of its origins.

 China's government may not be democratic, but it is built upon the principles of a meritocracy.  It recruits and nurtures the brightest and the best.  Consequently, Xi Jinping, China's heir apparent to current leader Hu Jintao, started his career as a farm laborer.  His father was a poor tea trader who spent 16 years in prison for his politics. (Offhand, we don't recall the last U.S. President who came from such humble beginnings.  Certainly, there have been very few since Andrew Jackson.)  Suffice it to say that fewer U.S. leaders today have come from poor backgrounds than ever before - which suggests that many highly talented young people are finding the doorway to the American Dream barred against them.

 If the U.S. is to retain its standing in the world, we need to get our act together.  We need to make sure the best talent is nurtured and rewarded, not wasted.  We need to maintain leadership in vital technologies.  We need to rethink political correctness (that is, we need to embrace ideas that are true regardless whether they serve vested interests). 

 As Defense Secretary Gates learned on his recent visit to China, the country has the flexibility to expand its military while the U.S. is now looking at cutbacks.  China is also planning to spend $1.5 trillion on new high-tech industries that will increase its energy supplies and efficiency.  The only solution the U.S. seems willing to consider is more offshore drilling.  We must stop being so complacent.

（from Dr. Stephen Leeb's e-mail）