Britain must abandon its "obsession" with the eurozone crisis to look to the true deciders of its future, said Jim O'Neill, the economist who defined the "BRIC" economies, as he voiced doubts over official UK growth figures. − UK Telegraph
Dominant Social Theme: The BRICs are just great.
Free-Market Analysis: Jim O'Neill, the Goldman Sachs creator of the term "BRICs," wants to convince us that the BRICs are not only magnificent engines of growth and prosperity but also the future of finance and investment.
To this end, he attended the Telegraph's Festival of Business and spoke to reporters there. Telegraph journo Emma Rowley posted an article (excerpted above) on his views.
O'Neill wants to remind us that the future belongs to Brazil, China, Russia and India. These are the world's new and stronger powers. Here's more from the article:
The UK's economic potential depends far more on how businesses ride the growth coming from China and the rest of the world's newer economic powers, argued Mr O'Neill, chairman of Goldman Sachs Asset Management.
"People should not be as obsessed about this [eurozone] issue as they seem to be in this country – and certainly our political leaders should not be blaming all of our problems on them [the euro members]," he told The Telegraph's Festival of Business.
"It's not really 'what about the [US] fiscal cliff', or whether Greece will survive in the eurozone or not. It's what is going on in China, Brazil, Russia, India, and some of these other nations that are becoming so important to us as well."
Last year China's growing economy created the equivalent of a new Greece every three months, he said. Together the BRICs – Brazil, Russia India and China – created the equivalent of a new Italy, the world's eighth biggest economy, in just 12 months.
"This is the big opportunity for Britain's post crisis future in terms of raising our exports to these nations," Mr O'Neill argued. He pointed to Germany, which he said now exports more to BRIC countries than it does to France, insulating it from the effects of the eurozone crisis in other euro countries. In the next 18 months, it is "quite possible" that Germany will export more to China than it will to any other country in the world.
All this is persuasive, of course, and yet there are other arguments to be made. In fact, one could argue this perspective is a kind of dominant social theme. It is the elites, in our view, that wish to impress upon people that the BRICs are the world's future financial powerhouses.
Are they part of a larger globalist exercise? Perhaps the idea is to reduce the prosperity of Europe and the US, while raising up parts of the rest of the world. It is not feasible to create world government when only certain regions are prosperous. There must be balance, apparently.
What's odd about this analysis initially is that all four of these countries have a history of Western interference and control. India was virtually run by the British. China was drugged on British-supplied opium. According to G. Edward Griffin, big Wall Street traders came down on the side of Red Russia and funded the Revolution via Red Cross channels. Brazil, of course, has existed within the ambit and influence of the USA.
So to maintain that somehow the BRICs have broken out and are doing magnificently well on their own is at least an exaggeration. The very economic system that O'Neill lauds is a Western one. All four countries have provided their economies with a central bank sugar rush. This is exactly the same kind of "economic development" that has taken place in the US and Europe. And it must surely end the same way, with a terrible bust and some sort of rolling economic ruin.
O'Neill wants us to believe that the inevitable tide of history has lifted up the BRICs and carried them to the fore. But it seems more to us like determined manipulation.
We figure this is more economic history of the directed kind. Is it so difficult for a handful of elites who apparently control central banking around the world to create an upswell in one region and a downswell in another?
Our children will doubtless be taught that as the West declined, the developing world rose up and became prosperous. But it doesn't make any sense that exactly the same economic formulas are being used around the world.
O'Neill is purveying a promotional meme, in our view. Of course, it is a useful one for certain individuals and groups. And such a promotion properly analyzed and acted on can even be used as an investment opportunity.
One can take positions in the BRICs, confident that the power elite intends to raise them up. On the other hand, one can remain hesitant based on the idea that the Internet Reformation is going to interfere with these plans and that the 21st century will not prove so easily controlled as the 20th.
Conclusion: No matter your view, we distrust O'Neill's narrative. The idea that the BRICs are surging to the fore is a bit too pat for our tastes. There's more going on than that which meets the eye. As there usually is ...