In my third entry on the forecast for Ren Chen 2012: (read it here ), I wrote:
In 2010 and 2011, the theme was Againstness in both years, with this theme becoming magnified in 2011, after being foreshadowed strongly in 2010. In 2012, I think the theme will be about the divide between Us and Them. A natural in many respects, continuation of Againstness. The issues that pissed people off in 2010 and 2011, now have sub-issues and people are taking sides.
Us vs Them is subtly different from the concept of Againstness. Againstness implies opposition but does not affirm division. Us vs Them is a clear sign of division, the proverbial ‘House Divided’ that Abraham Lincoln aluded to. Us vs Them can be defined on many levels – the magnification of the divide between the Haves and the Have Nots is probably going to be most prominent along with the Empowered and the Disenfranchised. (as determined by the presence of Power and Wealth as the two prominent elements in the chart).
In today’s New York Times Op-Ed section, Paul Krugman, Professor of Economics, opened his article entitled ‘Money and Morals‘ as follows:
Lately inequality has re-entered the national conversation. Occupy Wall Street gave the issue visibility, while the Congressional Budget Office supplied hard data on the widening income gap. And the myth of a classless society has been exposed: Among rich countries, America stands out as the place where economic and social status is most likely to be inherited.”
My interpretation of 2012 also takes the following view:
The Four Pillars of 2012 bi-sect in a sense – Ren on one side, Yi on the other. Extreme Yang on one side, Extreme Yin on the other side. In both instances, you see Power paired with Wealth – Yi Wei sits on Wealth, Ren Yin has Wealth in Growth, Yi You sits on 7 Killings, Ren Chen sits on 7 Killings. However, there is collusion between the Power parties (Yi You and Ren Chen has a combination) whereas the Wealth parties have little connect. This could suggest governments of the world ARE able to get their acts together and figure out what needs to be done or what has to be achieved economically BUT there is no buy in or little cooperation from private enterprise, business or the economic players on a global scale. As an example, governments may be able to conclude FTAs or even find that the World Trade Talks go brilliantly and they are all in agreement about what needs to be done but when governments go home and try to enforce against their individual economic powerhouses, the effects are less consistent.
Former Morgan Stanley economist (and famous China contrarian) Andy Xie published his article entitled ‘A World Flying Blind‘ yesterday. Notable points Xie makes which I thought seemed to connect with the outlook implied by the chart vide my interpretation:
However, the fundamentals for the global economy remain dire. The West is mired in debt troubles, declining competitiveness and unsustainable social overheads. The East is struggling to build up robust consumer demand to balance its manufacturing prowess. So far, world leaders have used liquidity and fiscal measures to prop up demand without addressing structural problems. In essence, they are continuing to treat the global economy as a car with a dead battery rather than a bad engine.
Fourth, the U.S.’s exports will suffer when Europe and Japan are in recession and emerging economies are slowing sharply. One benefit from a loose monetary policy is a weak currency that boosts exports. This trick isn’t likely to work in 2012. But U.S. companies have plenty of cash. If they invest the money, the country’s economy could boom for a year or two. But, anticipating its unsustainability, they won’t do this. There isn’t a second channel for the U.S. economy to boom. (emphasis is mine)