These are Interesting Times – A Hegemon Struggle Not a Tradewar

Introduction:

While on vacation I read seven books. My favorite was the book entitled “Safe Passage” by Kori Schake. Ms. Schake researched the history of Hegemons, the one country so dominate at any point in history that it exercises control over the actions of all the other countries in the world at that point in time.

In history there have been a number of Hegemons. Think of the Babylonian Empire, Alexander the Great, The Roman Empire, etc. From her research the transfer of power from one Hegemon country to another occurred via military conquest, except for one instance.

In her book Ms. Schake discusses the single peaceful Hegemonic transfer of power… from Great Britain to the United States of America (USA) over the period of 1823 to 1923. Those dates are derived from two treaties that she feels bookend the transfer that was actually finalized as a result of the ripple effects of World War I.

For over 150 years Great Britain ruled the world because of its empire and its dominate military. Significantly, the shift to the United States of America being the Hegemon ended the age of European Empires as the USA exercised its Hegemonic position to replicate around the world our values of democracy, self-determination, and free trade.

Armed with the information in “Safe Passage”, one realizes the significance of the disagreement over trade that is currently occurring globally between the USA and China, Europe, and NAFTA. This is not a simple “trade war”, this is a Hegemonic Conflict. The outcome is critical to our economic future. We will explore what that means over the next few weeks.

It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.