The New Economic Environment Without The United States

The imperial wolf is going home.

This is the situation the world is going to find itself in. For decades, the United States was despised by many in the world for its imperialistic nature. Never was there an affair that country did not seem to involve itself in. It seemed that, at every turn, the U.S. was sticking its nose into something. Ultimately, this was in the form of military action, something that really caused resentment around the world.

People just wished the Americans, with their arrogance, would simply leave.

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Well, be careful what you wish for it just might come true. The Americans are going home and it is going to completely change the economic order in the world.

Rapidly Changing World

What will things look like in a decade? This is going to be an interesting question because things are going to change very rapidly. The situation in Afghanistan shows how quickly things can turn when the U.S. simply decides to leave.

Make no mistake, this was building over the last decade. The endless wars finally did the Americans in. They are taking their ball and going home. No longer does it have the desire to police the entire planet. This worked from the end of WW2 until the fall of the Soviet Union. Since that time, the world order was not to its advantage.

The Biden Administration is now the third straight one to adopt this position. Troop deployment has been decreasing, something that is being accelerated. Trump pushed our allies, the few remaining, to pull more of the load. This means that U.S. involvement is waning.

Many make a big deal about the decline in the number of allies the U.S. has. This is a mistake. The fact that there were over 100 during the cold war, a number that is single digits, is by design. In short, the U.S. does not care.

Trump enacted and got ratified 5 trade agreements on the heels of zero done by the Obama Administration. Of these agreements, the only one that was truly negotiated was with Mexico. The rest were basically forced upon the others, including the replacement for NAFTA (USMCA) which was just handed to the Canadians to sign.

Japan, Australia, and the UK were not given much choice. They had absolutely no bargaining position. The other, China, is now presently engaged in a game of chicken.

The United States is now to the point it only cares about those three allies along with the North American Union. Everything else is of little interest.

There Goes American Money (Bribery)

Since the end of World War 2, the U.S. paid its allies. Basically, it bribed everyone to play nice. The United States could take the lead in return for money, access to its economy, and naval protection on international waters. This was crucial during the Cold War period. Unfortunately, since the fall of the Soviet Union, it no longer served the Americans.

Of course, the rest of the world benefited from the fact that they were a bit slow to realize this. The agreements that were in effect were no longer necessary. Instead of drawing up a new one for the global needs, the U.S. just went along with it. This did not work out so well.

While they might be slow, eventually the reality was driven home and now the U.S. isn't quite sure what to do. Therefore, the conclusion is to just go home. As evidenced by Afghanistan, it isn't even going to bring its toys back with them. It is simply walking away.

Many will cheer this and rightly so. However, also leaving is American money and their protection. Sure, at times it could feel like dealing with the Mafia but it was effective.

For example, the European Union only survived because Germany was neutralized. It is important to remember there was no greater bloodshed throughout history than on that continent. At the core of a lot of it, at least in the last 150 years, was Germany. The U.S. got everyone to play nice by keeping the Germans at bay while also providing a market for most of the countries' goods.

Germany is a net exporter. Who are they going to export to if their access to the U.S. market is reduced? Plus they need a lot of resources that have to come from elsewhere. Germany always got them by taking what it needed. Without another option, is this what it will resort back to?

The UK, after leaving the EU, was quick to get in bed with the US. Getting a trade agreement will give them access to the largest consumer economy. That should more than offset what was lost from the EU, especially as that disintegrates.

Mexico Will Be The Grand Winner

There is a reason why the US actually negotiated with Mexico. The Mexicans have the demographics they need and it is a situation where the "next China" is arising closer to home.

As was shown in Mexico is the next China, the demographic situation in that country is exactly what the US is searching for. It is one of the most target rich areas in the world in terms of future consumerism.

At the same time, as the US drifts away from China, it will need another low cost producer. For the moment, automation can only take things so far. Here is where the Mexicans enter. They can provide a great deal of that while also reducing the shipping costs a great deal. This is where a great deal of American foreign policy will be focused.

It is also where a lot of that money that was directed elsewhere will be relocated.

In short, the Mexicans are about to benefit greatly from the United States exiting vast portions of the world.

We have to keep in mind that, other than cheap goods, the global situation did not favor the US economically. The key is that it was never meant to. Instead, it was a security and peace issue. Therefore, the US exiting the global stage will not harm it as long as there is an alternative to low cost production.

There is a reason why Mexico is now the #1 trading partner with the US.

what does get affected are those countries that benefited from this period of relative peace, especially in shipping. Few vessels were overtaken and boarded. Commerce was allowed to flow. This might not be the situation any longer.

Those who benefitted the most could be the worst hit. At the top of the list is China. That country is lashing out at the US, the hand that fed it for the last 4 decades. Now it is likely going to find out what it is like when the alliance that is physically around it does not have the Americans holding it back.

There will be economic fall out all over the world. Some countries will benefit of course while others will suffer. It remains to be seen where some nations will end up. India, for example, could be a huge winner if it could get its act together. Thus far, that has been tough to do.

We will see a number of situations like that. Brazil is another one that could end up coming out ahead and being the regional power in Central and South America. Or it could trip all over itself.

Either way, the US made clear who it is concerning itself with. Outside of that, it will be a free-for-all. Things will get very messy in some areas.


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This is a whole new world you are talking about. Right now South Korea is leaning on the China side but next year is elections. More than half the country wants to keep the US presence, but a strong minority wants the US out.


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I somewhat get it when the election comes every one does the thing they say they won't

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That will be an interesting scenario.

The problem for South Korea is they are also a major exporter so the odds of them siding with another exporter over the larger consumer market is a tough one to see.

Plus that would also mean going against the Japanese. I am not sure that is a wise move in that region.

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The South Korean government has been doing some unwise things recently.

https://www.scmp.com/week-asia/politics/article/3118152/moon-jae-says-south-korea-will-not-take-sides-us-china-rivalry

https://www.reuters.com/world/asia-pacific/japans-suga-skoreas-moon-hold-first-summit-meeting-friday-yomiuri-2021-07-18/

However this past week the welcoming of political refugees has gained the President some favor. It's hard to tell, but I think South Korea could go either way. I feel the clam before the storm.


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The economic change = being able to fund infrastructure in their own country

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Germany is a net exporter. Who are they going to export to if their access to the U.S. market is reduced?

Theoretically, China.

But Chinese debt levels are much worse than they’d care to admit.

So Germany might have to fall back on Russian trade. If nothing else, barter for raw materials?

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China's economy is already contracting. Plus their per capita GDP is rather poor. The Chinese have a lot of headwinds.

So Germany might have to fall back on Russian trade.

That is true although I wonder how much power the Russian actually have. They have major demographic issues, worse than Germany, along with a very weak economy. They are in worse shape than Putin cares to admit.

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I feel United State is like the end period of Qing Dynasty. Day dream on the past glory; unwilling to adopt changes; population do not know the real outside world, etc.

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The difference is the US doesnt need the outside world. It did not benefit as much economically from what took place the last 50 or 60 years like other countries.

Now we will see what happens when the US decides to head home. The North American Union will only get stronger.

How will other regions fare? We shall see. I guess it depends upon who steps in.

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I'm a bit skeptical about how India would manage to climb up the charts. However, very less of my attention has been given to Mexico, it's gonna be a free world, free market ara, are we moving in a world of very limited or no rules?

Two things are involved;

  • freedom to be productive.

  • Loopholes to crimes as securities become limited

It's a fingers crossed and hoping for the best typa situation.


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India has the ideal blend of high and low tech workers. They can be the US and Mexico in terms of serving each others needs but in one country. Of course, they have to figure out their internal problems first which is no easy feat.

They do have the advantage of having a large population that is not going to decline along with enough might to control all the traffic that floats by them.

The question is whether they will set aside their internal differences to take advantage of the situation or will they sabotage it with their fighting?

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It would be really interesting to see the development of Mexico as the replacement to China. I agree that if it emerge as the low cost producers, no country would want to go to China, which has branded itself as the producer of cheap products.


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I agree Afghanistan is a perfect example of it and I also don't like USD for poking its nose in every country fair and doing military action to suppress it. it not that I heat USA people but gov

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Well you are going to see over the 15 years or so what it is like with the US not sticking its nose into things.

Iran just grab a vessel a few weeks back and the US didnt even bat an eye. Expect more stuff like that.

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This is the most wonderful news I have read this week.thank you for giving me and the community update


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