Symbiosis
During
the 1980's and 90's a key word that punctuated the marketing of the financial
markets was "globalization", the integration of diverse
geographies into one giant global commercial infrastructure. Amongst the chief players was to be the
United States; Russia (then the Soviet Union); Latin and South America; China;
and Europe, pre EU. What we had expected, and what has occurred, differ somewhat from the grand
idea.
While
the hype of riches and synergies was mostly talk, we are, in fact, much more
interconnected today than decades ago due mostly to changes in technology, for
example the introduction of the internet.
Today, cultural and commercial interests can be linked by a keystroke....or
deleted with the same alacrity. I
believe that even though a superlink might have the power to engineer dialogue
and commerce, its immediacy also
heightens tensions and raises suspicions about the sustainability of compatible
themes and interests. What can be created in an instant can also be
ripped apart just as quickly.
Therefore
when conceiving of the global melting pot as one big marketplace, one must also
appreciate the diversity and vulnerability of its members in order to
understand and magnify profit potential.
No one should be surprised, as the old saying goes, that "when China sneezes, the US catches a
cold".
Because
of, or perhaps as a result of, escalating global political and military
tensions currently, the sum of the global market is not always equal to or
greater than the simple addition of its individual parts. In fact, specific concentrations of
wealth, in the form of money and natural
resources, heightens the inequality amongst these "partners". The difference between "mighty" and
"not so mighty" is not diminished
by globalization, only made worse.
The
goal of equalizing the playing field for its members by integrating systems,
currency, and objectives has strikingly diminished the hoped-for result, that
of neutralizing any geographic or political advantage one member might have
over another. The larger, well
capitalized nation-states have a great deal more leverage over their smaller
competitors; they know it and utilize that advantage.
Those
with the most resources, as is true in most capitalist scripture, have less
exposure to risk, are less vulnerable to events that might otherwise knock the
weak off course more quickly. Put
another way, the stability of today's common global market is about as secure
as
a puff of wind or change of leadership can make it go away. Unfortunately in business, someone is always
looking for a competitive, or cheater's, advantage over someone else.
Scar
tissue
We
can now see that economic risk and volatility are being transferred from the
largest market baskets to emerging, smaller capitalized regions. While the mature Westernized nations are
deleveraging in the face of overwhelming austerity requirements, leverage is
exactly the tool that will sustain nascent market's new profit and product
potential. Once again, however, as the
gap between rich and poor increases,
countries caught in the middle
become marginalized and forced to migrate into a "box" not
necessarily of their choosing. This is
the present dilemma in Ukraine and many other countries caught "in
between" cultural, military, and economic conflagration.
For
many, what matters most in the marketplace is profit and future growth. Whereas the buyer once had all the
advantages of negotiation, today's sellers
are more selective and better equipped
to meet the challenges of an unleveraged contracting cash-only economy. The expectation that globalization would broaden sales for everybody is somewhat offset by
nationalism and local infrastructure that places limitations upon the ability
of some to participate profitably in intramural commerce.
Tactically,
this heightens the challenge of selling into this diverse network of nations
and cultures. Isn't it odd that we feel more connected because of
the advent of technology, and yet it seems that the ills which afflict various
populations worldwide often provide us with an instantaneous reason to
ostracize and discriminate against any member state that fails to pass muster.
It
is no surprise that what originated as a chance to conceive worldwide profit
and opportunism has become an agent of speculator's bullying.
As
in high school, you're either in with the "in crowd" or you're out
with the losers and has-beens.
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