Authored by GoldFix,
Housekeeping: A long form side-by-side commentary was completed on this. However it increased watch time to 3.5 hours with too many interruptions. It will be broken into smaller chunks later for premium subscribers. For now, only framing comments are included.
- Intro
- Video
- Differences of Opinion
- Dollar or De-Dollar?
- Shield and Spear Paradox
- Who "Won” The Debate?
- Participant contact info
1- Intro:
Part of the IGWT 2024 report included a lively recorded discussion on the Global East-West Divorce currently underway and its effect on Dollar dominance World Wide. Here is that discussion with timestamped topics.
3- Differences of Opinion
Brent, in our opinion, is looking at the situation as it currently is (and protective moats that will keep it that way). He is emphasizing the current position of things.
Louis, on the other hand, is looking at the movement (and drivers of potential movement) of the current position.
In any good analysis— be it equity, geopolitical, or economic— both these approaches are necessary. By example, in fundamental Equity analysis, you look at where things are (i.e. Price to earnings) as well as where things are moving (i.e.- Price to Growth.)1 when looking at prospects.
Either gentleman uses both measures. One puts more emphasis on where things are, the other puts more emphasis on where things are seemingly going.
4- Dollar or De-Dollar?
Differences in empirical data and interpretive logic aside (there are plenty of those2 ); if you agree with Brent, you think Louis overestimates the ability of China/EM economies to continue moving the needle diluting dollar dominance further. If, on the other hand you agree with Louis; then you think Brent is giving too much credit to the US incumbent position to keep the needles where it currently is pointing.
Everything else (to GoldFix) is a matter of if logic used to make an argument. That, and knowledge of market economics and geopolitical realpolitik .
5- Shield and Spear Paradox
We can boil this discussion down even further without hopefully losing its essence using a physics paradox:
The irresistible force paradox (also unstoppable force paradox or shield and spear paradox), is a classic paradox that asks: What happens when an unstoppable force meets an immovable object? The immovable object and the unstoppable force are both implicitly assumed to be indestructible, or else the question would have a trivial resolution. Furthermore, it is assumed that they are two entities.
The paradox arises because it rests on two incompatible premises—that there can exist simultaneously such things as unstoppable forces and immovable objects. That cannot be true in the same universe.
Therefore: What happens when an unstoppable force (China/EM growth) meets an immovable object? (USD Dominance)?
This is possibly the whole dilemma. Either one is stoppable, or the other is movable.
How unstoppable is the China/EM force?
How immovable is The US object?
Answer that, and you may know who you agree with more.
The ultimate answer to the Paradox here lies in the people actually holding the shield and spear. Therefore one person (nation) will blink first, or there will eventually be war to test these two participants’ commitment.
6- Who "Won” The Debate?
As to who “won” the actual debate on merits even though it was *not* framed as one remains subjective. Or upgrade to Goldfix premium and we will share our rather lengthy thoughts (pictured below) soon enough.
Commentary and Analysis coming soon….
Social Media Participant Links:
- Ronni Stoeferle of IGWT/Incrementum
- Niko Jilch- Journalist, IGWT Contributor
- Louis-Vincent Gave - of Gavekal Research
- Brent Johnson- Of Santiago Fund
More here
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