Entry 5 – War (second phase)

Today I am going to change the usual structure of the entries I have been writing. I am doing so because I believe that data have appeared that clarify the situation.

Therefore, before my particular press review, I am going to make my most likely prediction of what may happen in this war. Of course, with the risk that future events may change my mind.

What encourages me to do so is that China has finally come out, which was essential to know where we are going, but had been delayed.

I think what is going to happen will be something very similar to what I called “alternative A3” in Entry 5 of my previous string of entries. There I said:

“Alternative A-3 – China does not get involved, and Russia and the West end up devastated in a long War:

….
The logical thing would be to look for a botched exit. Something like a ceasefire (not an armistice), even a long one, …

The West would be damaged economically.
And China was delighted, without having done anything.
Today it seems to me the most likely option.

I believe that we are on the way to this provisional peace agreement. I believe this on the basis of news and opinions that I have written in previous entries, as well as others that I will quote below (and that I do not insert here to avoid a lengthy text). The fact is that, for the time being, it seems that the conditions to encourage this peace are in place:

Throughout the West, due to its economic problems (which are beginning to turn into social ones), there are many forces, both political and economic, that are asking to lower the support to Ukraine, and force it to negotiate peace. This issue is going to increase after the missile in Poland, which is being sold as a Zelenski’s trick (and it does not matter much if this is true or not, the fact is that they are going to use it as such).

At the G20 it has become clear that China does not support the West unconditionally; and that it does help Russia a little (not too much). And China has also asked them to negotiate a peace.

In this whole process China is acting in an equidistant, or perhaps equi-proximate, manner.

It seems that the risk of nuclear escalation (outside Ukraine) is ruled out, because China has made it clear that it does not want it. And it is understood that China has the capacity to convince Russia of that.

Russia is weakening on the military issue of occupation, as well as on the support of its population. It cannot conventionally attack countries other than Ukraine, and China will not let it do so in those countries with nuclear weapons.

The only thing Russia can do to improve its negotiating position is to bomb Ukraine more (including nuclear).

Ukraine’s morale is high today. But the loss of some Western support, the cold weather, and the Russian bombardment will lower its morale a bit.

On the other hand, China has made it clear that it continues to claim Taiwan, as well as that it continues to aspire to a position of global relevance (the two blocs of countries). But China has also made it clear that it is in no hurry, that it is good for it to wait while the West bleeds and is further divided by economic and supply problems.

With all that, we are likely to go to a scenario of military peace, maintaining some energy and food warfare, but with trade between blocs not entirely eliminated.

It will be a transitory period. Countries, companies and individuals will have that time to implement their strategies for the next phase, which will be one of very closed borders between blocs of countries, and in which the gradual degradation of the West will manifest itself.

Meanwhile, in the West, stock markets and analysts believe that this peace is almost definitive, and believe that normality will return. That is why they have good medium-term forecasts. It seems to me that they are wrong.

……

After this prediction, I will continue with my press summary, which I will try to make telegraphic, but providing the links that have most interested me.

We have all seen about the missiles in Poland. It was a moment of great risk at the beginning of WWIII.

However, it seems that they have chosen to transform it into an incentive for peace. To this end, they have “decided” that the missile was launched by Ukraine (probably without much analysis, but for reasons of convenience).

I don’t think it was by chance that it coincided with the leaders’ meeting at the G20.

It should also be no coincidence that the Russian Foreign Minister left the G20 shortly before the impact.

What has been very helpful is the calmness of Poland, and the Chinese attitude.

The fact is that, in the joint statement of the G20 on these missiles, it is said that the majority condemns Russia, but it is also said that “there have been other points of view“, which happen to be those of China and India (more than 3 billion inhabitants of the world, which is no small thing, but more inhabitants than those of the countries that claim to be the “majority”). The news is developed in detail here.

There is also no need to explain the news about Ukrainian victories in some areas. That gives encouragement, and takes it away from Russia (news here).

Nor is it necessary to explain the victory, very relative, but better than expected, of the Democrats in the American midterm elections. As well as Trump’s defeat, although he has announced his candidacy, …

That makes Biden rethink his strategy.

Biden and Xi Jinping met on the occasion of the G20 (news here).

Following this, the Chinese leader has stated, “the two sides should work with all countries to bring greater hope to world peace, more confidence in the stability of the world and a stronger impetus to common development.”

Both have condemned the use of atomic weapons.

In addition, Jake Sullivan, on behalf of the US government, has met with Zelenski to ask him to try to negotiate peace.

In Ukraine, nationalizations are starting due to the needs of the war (news here). It is normal that it is necessary for them, but this will make it difficult for them to get the support of the oligarchs, which is something they also need.

In Russia, Alexander Dugin, who is a very famous nationalist thinker there (whom I already talked about in previous entries), has called for someone to overthrow and kill Putin after the Kherson defeat (news here). He says that Russia cannot sink that low.

This does not suit Putin at all.

In the USA, from the financial world, Ray Dalio has written again. He comes to say that he believes that the escalation of military war will be avoided, but that what he calls the “great cycle” continues, which is the fall of one empire and the consolidation of another (news here).

He thinks China needs two to three years to fix its real estate problems, i.e., that’s how long before the next few rounds, which fits with what Kondratiev’s followers say about the next big cycle change being in 2025.

And, although it is not a matter of this War, it must be said that the world has reached 8 billion inhabitants, and that India is about to surpass China (in population). Also, this may indeed have some bearing on the War, because demographics is at the base of almost everything.

After this general prediction, and my press summary, I comment below on other things that I find interesting. And, I suggest you take a close look at what I say, at the end of the entry, about the “lettuce negotiation”. It gives me a lot to think about.

McKinsey has understood us.

McKinsey, which is a very relevant consulting firm, and highly respected by all political and financial leaders, has published in October a new report (you can see it here).

I find it curious to see that it comes to say something similar to what Pedro and I have been saying in these entries since 2020 (I am the one who writes, but Pedro is something like my tutor in this work).

The probability that McKinsey has read us is very small, but the fact that such relevant people reach similar conclusions is gratifying. Especially when we have said it much earlier and having infinitely less means than theirs.

Since the leaders will almost certainly heed McKinsey, that leads me to change my objectives for these entries. I no longer have to try to convince anyone of what I think will happen (they will).

From now on, I am going to focus more on what we can each do to adapt to the changes.

In his report, McKinsey comes to say that the world order since WWII has come to an end. Without citing it, he makes a division of epochs, since then, which is very similar to that of Kondratiev, although he divides it into three seasons, and Kondratiev divides it into 4 (we will have to think if the fourth has not yet begun, or if they use a different “calendar”).

Evidently, they see the power battle between China and the USA (democracies vs. autocracies).

What raises their doubts is whether this will lead to an iron curtain between blocs, or to some communication and trade between them.

In any case, they believe that the separation of the blocs will be slow, because China chooses to wait.

They speak of the “Century of Asia“.

…….

Now, once I have commented on the probable military evolution, making a culinary simile and to change the flavor, I will deal with social issues, …, and finish with lettuce, which may be the main dish (perhaps this is a culinary innovation).

Today’s governments act like unions.

One issue that has been catching my attention, as I follow all kinds of news to write these entries, is what many governments are doing in communicating with their people.

It turns out that we are in a war, with risks of becoming global; in addition to a major economic crisis, with serious doubts about the reliability of the currencies; and in a situation of major changes in geopolitics; …

And, despite this, governments seek to make most of the debates and news about minor issues, not irrelevant issues (always depending on the opinion of each person), but of ridiculous size compared to losing your life in war, or losing all your money and job…,

For example, in Spain we are focused on laws on sexual matters, in the USA on the possession of weapons, …

Why do they avoid the main debates? One answer would be that they consider us manipulable (we are) and want to divert our attention so that they have a free hand in the big decisions.

But, another possible answer is: because they can’t do anything about those main issues. They have no attributions. All that is decided in bodies superior to governments (United Nations, Central Banks, NATO, …).

I believe that both answers have an influence, but I think that the second one has more weight. Governments have long been puppets manipulated from above, with little real decision-making capacity.

The only function of governments today is to keep the population under control, and to avoid major revolts. To do so, their best way out is to keep people entertained with minor debates, and to unleash their anger with it (not with what is important). It’s like Rome with the “bread and circuses”.

That is why I think that today’s governments are like the trade unions, which try to negotiate with the “bosses” (the great powers above the governments) in order to be able to offer their inhabitants something they like.

Its objective is that more than 50% of the population (those who elect governments) have the feeling of having obtained some conquest, and it does not matter if it is small, if it sells well.

Thus, the leaders are guaranteed to continue in government, to rub elbows with the bosses, to obtain some personal gain, and to feed their big ego. But it does not affect at all what it is to decide and rule over the important matters, where they simply apply what is decided above, trying not to let the inhabitants notice it too much.

Metamodernism

A friend of mine (thank you, Jose Manuel) told me that he found the concept of “metamodernism” interesting.

It states that,

the vision of the absence of truth and validity of any opinion has left us without certainties, and without a past of reference, nor a hopeful future.

This puts us in a situation of vital anguish.

Hence, perhaps, the rise of populism, with its clear and simplistic messages, and political and social polarization.

it seems that people need some kind of truth that is not questioned, and perhaps a body that mediates between their aspirations and the organs of decision and power.

Of course, that gives a lot of food for thought (very much related to the “government-unions” I mentioned above).

It is a fact that obtaining freedom of thought and judgment is laudable. But it is another fact that this freedom is a burden for many people, who prefer to follow the leader’s doctrine rather than be responsible for choosing their own and assuming the consequences.

Most people have always preferred an instruction manual (complaining privately about bad instructions), rather than living life without a manual.

Before, the manual was written by religions or dictators. Now it is done by populisms. They do it in the West, because in other places it is still done by religions and dictators.

It seems like that’s the world we’re going to.

Lettuce bargaining. For decades.

A long time ago a great salesman explained to me his theory of what he called the “lettuce negotiation”. He gave the silly but easy to understand example of a person who wants to sell a lettuce and finds a buyer who is a good negotiator and quite cheeky.

First, the buyer says that one leaf of the lettuce is moldy, and removes it. Then he says another leaf is broken and ugly, and removes it. Then he finds more problems with other leaves, and removes them. Then he says that, since he is a big customer, they have to give him a discount, which makes it equivalent to three leaves, and he removes them. And so on and so forth.

After the whole process, he tells the seller that he has thought about it, and that he doesn’t want to buy.

The result is that the “non-buyer” has kept all the leaves of the lettuce, and the “non-seller” has kept the leafless tail.

That salesman, after explaining the example, said that, as soon as you detect that you are facing such a negotiation, the best strategy is to abandon the conversation as soon as possible, before you run out of lettuce leaves.

I say this because, extrapolating to higher levels, this is how things have been done in terms of accessing technological knowledge (without stealing it, but without paying for it). That has been the case in China, hosting the factories in their country, and being necessary for the workers to know the product. And this is how many other things are and will be done.

It is clear that we are in a geopolitical proxy war between the US and China, and we have seen that the slow decline of US power is likely, as well as the rise of China. This with an intermediate step of balance between the two powers, which may last for decades. This intermediate step may be followed by the clear global power of China, or the recovery of the USA, or the emergence of another player (which does not have to be a country).

It seems to me that we are going to witness a lettuce negotiation for decades. One of the lettuce leaves was production capacity (that has already been taken by China); another is the supply of raw materials (it almost has it, and is certainly in a better situation than the USA); another will be the control of international transport routes (in this China has already done a lot, but it has to continue); …

Other lettuce leaves that they will be working on in the future are:

The control of science (universities, in a different format).

Energy and its raw materials.

Currency (its digital yuan, accepted in the future for international commodities trade).

The friendship and trust of most of the countries and inhabitants of the world (it has already made much progress in Asia, Africa, and South America).

Even the army, but slowly, so as not to be too scary.

On the other hand, and even if I get a little bit into puddles, I think that the loss of the culture of effort, and the acquired rights to almost everything (in the West, not in China), make us live much more comfortable, but also much more vulnerable to an opponent who is not in that situation. We will be swept away.

This culture and these rights are very good for buying internal social peace, but not for defending against attacks.

There is always much more to tell, but as it gets long, I will leave it for the next entries, in which I will discuss, among other things, what happened with cryptocurrencies due to the fall of FTX, as well as energy and shipping route issues.

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