"The chart below shows 2050 years of relative global GDP, during which there
was a surprisingly flat distribution of the major economic powers: China, India,
and the "West", at least until the mid-1800s, when the "Western" Golden Age
began primarily courtesy of the industrial revolution, followed by the arrival
of the Fed and virtually endless leverage (i.e., borrowing from the future until
such time as no more debt capacity remains at either the public or private
sectors), only to end in the late 1900s when the marginal balance of power
shifted back to Asia, which became the next nexus of debt accumulation (see our
earlier post on
The Great Recoupling
for some additional perspectives).
And while the chart, from Deutsche Bank and PWC, attempts to predict the next
40 years of relative GDP distribution by eventually regressing back to the the
long-term trendline, we feel that this is quite an optimistic assumption for a
world in which virtually every "developed" country is insolvent, begs for China
to ease whenever western inflation sends gas prices soaring making reelection of
the incumbent impossible, and is reliant on the indefinite continuation of the
USD's reserve status to preserve the last traces of western superiority (not to
mention cheap funding of $-trillion deficits as far as the eye can see)."
at
http://www.zerohedge.com/news/2050-years-global-gdp-history
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