April 07, 2015

More than the decline of individual countries, we are experiencing the decline of the world in general.

Sir, any country that signs up on the idea of allowing banks to hold less equity when lending to what is perceived as safe, than when ending to what is perceived as risky, has ordained a risk aversion that will cause it to decline. It will not longer finance sufficiently the more risky future, but will try to trot along for a while, by refinancing the safer past. Most of the world is currently implementing this type of Basel Committee regulations, China included.

And so any discussion on the decline of any country, like Gideon Rachman’s “Britain’s risky obsession with America’s wane” April 7, needs to be held against the perspective of a general decline.

For a starter no country with this type of regulations can aspire to reach world leadership based on its own efforts. Any increased leadership it could reach would only be based on someone else losing it faster.

Rachman refers to some having complained about Britain’s abandonment of “kith and kin” in the Commonwealth. Be that as it may it is much worse; like most of the world, it is abandoning its children, by refusing to take the risks needed for them to move forward, hiding in the very short-term safety of safe havens… soon to be dangerously overpopulated.

But again, of what importance can such minutia be to FT?