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SOVEREIGN MAN

It’s the motto for the whole region

dbs-asia

October 18, 2012,
Bangkok, Thailand

“Wherever you may be in the world, you will feel the unstoppable force of a new Asia.”

So goes the advertising platform for DBS, the largest bank in Southeast Asia. These people know -exactly- what’s happening right now: wealth and power are shifting East.

This is something that has occurred frequently throughout history. In the Dark Ages, back when Europe was festering in the Bubonic plague and silly wars of succession, the Ming dynasty was the most advanced civilization on the planet; China led the world in science, literature, technology, medicine, etc.

At the time, the Ming economy was the world’s largest and most prosperous. They used silver as a medium of exchange, and the typical Ming household was worth more than a European village. Correspondingly, the Ming Dynasty also had one of the lowest tax rates in the world, in the neighborhood of 1.5% to 2%.

Eventually it all faded. Ming society sat on its laurels and began running empire-sized deficits. In time, the system failed and power shifted west to the Ottoman Empire (which gave the world its first coffee house in the 1500s), then to Spain, France, Great Britain, the German Empire, and finally to the United States.

Along the way, one of the most important factors that drove these transitions of power was economic prosperity.

The Ming dynasty was powerful because it was wealthy. Great Britain became the world’s leading power because it grew wealthy from the Industrial Revolution. The United States became the world’s superpower because it was the wealthiest nation.

Wealth drives everything. Military might, scientific achievement, medical breakthroughs, and technological advancement are all possible in wealthy societies.

Of course, nations don’t just become wealthy by accident. National prosperity is built on a foundation of savings, economic freedom, ingenuity, and hard work… all factors that are in terminal decline in the west today.

Western governments are already technically insolvent, devoid of any net savings whatsoever. And with each passing day, they create new regulations, new taxes, and new controls to destroy any remaining economic freedom in their economies.

Yet Asia has mastered all of these fundamentals. Hong Kong and Singapore routinely set the standard for economic freedom. China leads the world in foreign reserves. And these cultures are all about hard work.

The average Korean, for example, works 1,000 hours per year more than the average German. Here in Thailand, people who don’t have a job simply create one for themselves– selling fruit on the streets, fixing flat tires, whatever they can do to trade their skills and labor for income.

On the flip side of reason, France’s new socialist president Francois Hollande recently announced that students in his country would no longer have homework because some disadvantaged children don’t have parents at home to assist them.

Hollande’s solution to this social injustice? Make everyone the same. Eliminate parental responsibility for education, increase the state’s role in childhood development, and make sure the kids know that they don’t have to work hard in life… that the government will be there to support them.

Incredible. And indicative of how far the West has lost its way.

Asia’s rise is inevitable. The West’s decline is terminal. Again, this has happened so many times throughout history, it’s nothing to be anxious about. It’s an exciting time to be alive and witness first hand.

As acclaimed investor Jim Rogers has said before, “If you were smart in the 18th century, you moved to France. If you were smart in the 19th century, you moved to England. If you were smart in the 20th century, you moved to the US. And if you’re smart in the 21st century, you move to Asia.”

Moving may be a radical idea… but it’s at least worth considering business, investment, and financial opportunities here.

One easy proxy is to hold a portion of your long-term savings in Asian currencies; the Philippine peso (easy to open a bank account there) and the Singapore dollar (both available at everbank.com) have particularly attractive long-term fundamentals.

More on those soon.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • http://www.facebook.com/alexmills1976 Alex Mills

    thanks, so true about what is happening in the west

  • http://www.facebook.com/sefton.hanley Sefton Hanley

    When I first came to asia, I didnt really know what it was about the place that was exciting, the vibrancy, the 24h cities, the vibe.. Over time I have realised it is driven by economic advancement the societies struggling to develop and advance at rates that are just mind boggling compared to old world Europe.

    Thats not without its teething troubles and problems, corruption and greed as they race to acquire wealth and come out of a feudal social model.. Environmental issues rooted in the same causes.

    But theres an excitement, an energy, a feeling of a better tomorrow and that the best is to come. I hope they are right.

  • http://www.facebook.com/kevinrwells Kevin Wells

    I’m living in Thailand right now and what you’ve written Simon corresponds pretty much with what I’ve experienced.

    Everywhere in Asia you see economic bustle seven days a week and into the night. Europe where I used to live by contrast everything is closed most of the time.

    Other than that Europe is about welfare. Millions of people are paid welfare to do nothing: unemployment, pensions, “disability”.
    Try and create your own job in Europe by selling something on the street in Germany – (or England) or opening a workshop on the spot on a saturday.
    Impossible. You’d be cleared away in an instant, prosecuted and fined.
    Most trades (let alone professions) are effectively closed to most people in Germany because of the need for lengthy elaborate apprenticeships.
    You aren’t allowed to start or run a business from a garage in Germany. Apple or Microsoft wouldn’t have survived in Germany beyond 6 months. Enterprise is discouraged in France – entrepreneurs are considered hostile to the social welfare order, people to punish by taxing to the hilt.
    I think that the problem with Europe is that it’s still living in the illusion that it’s the centre of the world and that everywhere else (other than the US) is backward.
    Europe is effectively just living off the fat that it accumulated in the good times from 1945 up until the start of globalization and the Internet from around 1990. It hasn’t yet fully grasped and accepted the urgent need to change. As a result the region is now broke.
    I agree the future is with Asia – and South East Asia especially. Just been to Kuala Lumpur and it’s the same there: full speed ahead with economic growth and business. Same also in Taipei, Hong Kong and Singapore. “Austerity” and “cutbacks” – what’s that?

  • Thomas W

    I couldn’t agree more. Asia is where it’s at for the 21st century. Demographics alone would support this, as it’s the prevalence of younger (and highly educated) populations that drive consumer spending as well as economic change in any country. The aging populations of North America and much of Europe will no longer be driving economic expansion. Well, other than in the fields of geriatric healthcare and retirement homes.

    All kidding aside, Jim Rogers said it all. The 21st century belongs to Asia.

  • John Pitt-Rivers

    “The conduct of international affairs resembles the Mafia. The Godfather does not tolerate defiance, even from some small storekeeper.”
    — Noam Chomsky

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