And we could have seen it coming a lot sooner, says Teer. “We must not forget that extreme poverty has dropped from 40% to less than 10% since 1990,” he underlines. “And that has everything to do with the intertwining of the world economy.”
“Extreme poverty has fallen from 40% to less than 10% since 1990”
He also says this has allowed companies to move production capacities to more convenient locations. “And that included the losers, which is the working population in the West,” she continues. “You have to take that into account, but the macro is very supportive of a lot of that trend. And now you see that the tensions between the superpowers are so high that we can no longer separate the economy from the harsh geopolitical reality.’
Signals
If one had looked more closely at the signs, it might have been possible to fix them. As an example, he cites the number of active sanctions countries have imposed on each other, which has nearly doubled. And most of it has been imposed by major powers since 2012. denotes Tar. “So underneath the surface things have been pretty choppy since then.”
But that the situation above the same surface should not be trivialized. Even in the field of globalization there are many moving parts. “The United States has been the champion of rare earths, largely for defense reasons, too,” says Teer. “Then the boundaries blurred, into a sort of philosophy that the world would grow together.”
China
But when China “opened up” and rare-earth metal production moved east, it stayed that way. Teer: ‘Today, 60 percent of mining takes place there and 90 percent of refined earth metals go to China. Exactly what vital sectors need.’
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According to Teer, Americans have been scratching their heads since 2012 wondering if that relationship is sustainable going forward. ‘Especially considering that China is becoming increasingly ambitious. (…). So you see people are starting to worry about whether fighter planes can be built without any Chinese influence on them.’