President Obama's Vision

In China, Liu Junluo (Chinese: 刘军洛) is well known on his extraordinary analysis on the global and Chinese economics. Several months ago, I posted his prediction on who the winner of the financial crisis would be. With time, more and more likely his prediction is indeed sound, again!

Recently, Junluo had another insightful posts titled President Obama's Vision and Mr. Bernanke's Regional War. The thought in the post is very sharp and farsighted. I cannot help myself from sharing the mind to the Thinking Space readers. However, I only translated the first part of his post. The full article in Chinese can be found here.

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President Obama's Vision

The Bogeyman of thinking is to tell that the earth is round when everybody else says it is flat. This is called vision.

If Mr. Obama had agreed to spend 200 billion U.S. dollars on saving the largest U.S. automobile manufacturer, the world might not have thought that the U.S. industry was decaying indefinitely. In fact, the 200 billion U.S. dollars is totally incomparable to the speed of money-burning in Iraq and Afghanistan. The problem is, however, why Mr. Obama chose to let the whole world think that the American industry is dying.

In October 1999, the entire human population global wide exceeded six billion. By 2020 the number will exceed 8 billion. 8 billion, however, is about the maximum number of people our Earth may safely sustain.

In two years, i.e. 2011, in United States the baby boom generation will start to retire. In the next 20 years, this 78 million American baby boomers will retire completely. They are the world's richest generation ever and they are the generation the most willing to spend. What will the world be when all of them are retired?

By 2030 the proportion of the aging population in United States and Germany will rise rapidly to around 26%. In Japan it will reach more than 30%. What will these senior people demand after the retirement? Medical care, nursing, recreation, pets, religion, and blue sky! At the meantime, they will consume less on many of the industrial products including particularly such as automobile, and they will save more money in bank.

Now in United States a senior over 65 is supported by 3.9 members in the young labor force. By 2030 the ratio will become 2.4:1. The same average ratio in all of the world's developed countries at the time will be 2.5:1. In the next five years, the tax burden of the ordinary labor force in all of the developed countries will substantially increase. If the total demand within the emerging countries especially such as China and India could not substantially increase, (i.e., the average wage of their main labor force is not increased substantially), in the next five years, by 2010 at least 50% of the automotive business and the iron and steel manufacturers will be eradicated by the sharp fall of the global demand in general.

Therefore, Mr. Obama chooses to force the largest U.S. automobile manufacturer to enter the age of small batch production. At the same time, the saved labor force will be redistributed to produce America the bluest sky, the clearest water, the best health care system, and the most superior legal system in the world. Since 2010, in every developed country all over the world a greater and greater force of the rich and retried people are looking for the best living environment, the best medical care services, and the best legal protection for their retirement life. This is a trend irresistible.

Now China has exclaimed to invest 900 billion U.S. dollars in the auto industry, boating industry, iron and steel industry, and cement manufacturing industry during the first half of 2009. Moreover, there are ongoing government projects in such as the road, bridge, and railway construction in no less than one trillion U.S. dollars. In southern China, a bridge-construction project leader excitedly announced to the people around that the 10-billion U.S. dollar new bridge will be completed in 2015, and it will shorten the time of cargo transportation in the region from the current 4 hours to about 40 minutes. The same excitement was also among the people surrounding him.

In 2015 the tax burden of the ordinary workforce in all the developed countries will be increased, which inevitably will lead to the substantially reduced rate of consumption among this workforce.

In 2015 a large percentage of the baby boomers in United States have already retired at home; and they will reduce the rate of consumption.

In 2015 the labor cost in India and Vietnam will be more competitive than in China.

In 2020 the most popular job in the world will be pension agents, who restlessly run among the richest generation of the retired people and sell them where the bluest sky is, where the cleanest environment is, where the clearest water is, where the best medical services are, and where the most superior legal protection is.

If an elder couple generates in average five million U.S. dollars in consumption after the retirement, and in the next two decades the United States attracts three million couples global wide to consume its best environment, best medical care, and best legal systems, it is a 15 trillion U.S. dollars business!

In 2010, the poor sells automobile; the rich sells medical care and law protection; and the wealthy sells clean air and water.

Mr. Obama is among the few first ones who know how to act properly when our earth is OLD, and when the 78 million U.S. baby boomers are also OLD.

In summary, the greatness of mind is that the monopoly of wealth stands opposite to the mass thinking.