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As an outgrowth of this situation, the owners of natural resources like petroleum may face a problem of what to do with the difference between revenues from raw materials sales and products they need to buy. What to do with the excess revenues will be a challenge. Resources in the ground could potentially be a more favorable means of preserving wealth than by simply by holding currencies. The situation will be ripe for the formation of international cartels. For Europe this situation holds considerable peril. Despite its current robust exports, in the world, Europe is somewhat marginal. It has little that cannot come from other producers elsewhere in the world. Europe has no raw materials in excess of its consumption needs. Europe has no colonies to exploit. Most important, Europe cannot provide military defense for any state or regime. It can only provide arms. It has a history of frequent bouts of serious inflation. It is a newly formed economic block in search of political unity among diverse cultures. Beyond the ability to engineer technology into high quality products, Europe has nothing truly unique to offer to the world. It has serious vulnerabilities. For example, a shortage of petroleum can be compounded by Russian power–plays with natural gas. These are serious risks as all of them pit the cost of social programs against the cost of maintaining the value of the Euro. By contrast, the United States has military power that the world oligarchies need in order to survive. It has an extremely efficient military with which to perform political surgery. That is a compelling danger to any potential adversary. It has a wealth of technology generated by space, nuclear, and military investments. Any potential adversary of the US must contend with the weakness of their IOUs being in US currency. In general measures of power, based on bulk alone, China is probably the second world power. That kind of power can be useful for holding key resource areas. The Chinese Diaspora offers effective political influence in all of Asia. This amplifies its ‘bulk’ power. It has the lowest cost production of manufactured products. Europe is no match for either the US or China. The only foreseeable scenarios of a weakening of China would be internal strife or the cancer of corruption from within. China has a history of succumbing to both problems. Reversion to a condition of sufficient petroleum and raw materials to meet demand will take a decade or more. But, it will happen. Various materials pricing themselves out of the market will be one factor. Another factor will be the natural reversion to a balance among all products in the market through substitution. Technologies such undersea mining, efficient conversion of heavy oil to light oil, coal to oil, gas to liquid, and other sources of energy reaching technological maturity will eventually bring about reversion to the mean at something like the current quality of life. So too, will international trade deficits. The shift from negative to positive balance of trade will buttress US power while the power of nation shifting into a balance of trade deficit will decline. However the transition through these years will bring a change in the world balance of power and value of many currencies, to include the Euro and Dollar. Putting a decade in to perspective, one must remember that 10 years is only one quarter of the average person's career. It is about as long as many people own their family car. We have a good idea of what the US will be like in ten years. Do we have the same assurance about Europe or China?
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