Hi Long time China expert pointing out one thing- China is screwed. It cannot deal with the NPL debacle because what the central committee and Xi is aware of is that the only time there has been regime change is when there has been very bad youth unemployment. This is the reason that NPLs are just kicked down the road. Truly unraveling of this situation increases the unemployment by the amount that would lead to regime change. The Central Committee knows its history better than anyone.
I'm confused by the second 3x3 matrix. Looks like the row and column labels are the same as the first 3x3 matrix. Should the row and column labels be updated with the second set of probabilities?
You may already be familiar with Bruce Bueno de Mesquita's predictive modeling techniques for situations just like you describe. Based on Nash equilibrium modeling, he described it for a lay audience in Predictioneer's Game. Years ago he made his model available for public use. It was a blast to play with.
Also hearing idea of possible flooding of cheap LLMs by China during next few years, potentially causing havoc to our hyper scalers and their investments, with rather negative effect on our economy. Something else to chew on I suppose…..
interesting series. why are your only war cases decisive victories? because your bad debt thesis implies anything short of that for china entails total system collapse? blockade makes food and energy impossible for china to source enough of overland? present technology means it will necessarily be decided quickly, or it just comes down to a race for taiwan then all parties say gg? something else?
my base case if there is a full-on kinetic war is both sides lick the battery and don't like the taste. aside from the difficulty of marshalling enthusiasm from the american public for an asian war, both sides are in difficult fiscal situations, both sides' populations are fairly disaffected compared to the era of nationalism, neither side can realistically invade the other's homeland. the gwot could only realistically be prosecuted by insulating the american public from feeling its effects, even with 9/11 to lean on for solidarity and justification. periodic exchanges punctuated by long retrenchments seems a lot more plausible to me than a world war-scale conflict
Hi Long time China expert pointing out one thing- China is screwed. It cannot deal with the NPL debacle because what the central committee and Xi is aware of is that the only time there has been regime change is when there has been very bad youth unemployment. This is the reason that NPLs are just kicked down the road. Truly unraveling of this situation increases the unemployment by the amount that would lead to regime change. The Central Committee knows its history better than anyone.
yup
Great series.
I'm confused by the second 3x3 matrix. Looks like the row and column labels are the same as the first 3x3 matrix. Should the row and column labels be updated with the second set of probabilities?
fixed! thanks, sorry I meant to paste over the format on those headers and pasted over the numbers!!! appreciate it
You may already be familiar with Bruce Bueno de Mesquita's predictive modeling techniques for situations just like you describe. Based on Nash equilibrium modeling, he described it for a lay audience in Predictioneer's Game. Years ago he made his model available for public use. It was a blast to play with.
FWIW my America states are more like:
Decline 60-70%
Muddle 30-40%
Reform ~0%
Nobody is going to want to rock any boats at all while the S&P 500 is doing this ___/
China isn’t the only government with a narrative they dare not puncture.
Also hearing idea of possible flooding of cheap LLMs by China during next few years, potentially causing havoc to our hyper scalers and their investments, with rather negative effect on our economy. Something else to chew on I suppose…..
yes, that's a core tenant of their industrial policy
interesting series. why are your only war cases decisive victories? because your bad debt thesis implies anything short of that for china entails total system collapse? blockade makes food and energy impossible for china to source enough of overland? present technology means it will necessarily be decided quickly, or it just comes down to a race for taiwan then all parties say gg? something else?
my base case if there is a full-on kinetic war is both sides lick the battery and don't like the taste. aside from the difficulty of marshalling enthusiasm from the american public for an asian war, both sides are in difficult fiscal situations, both sides' populations are fairly disaffected compared to the era of nationalism, neither side can realistically invade the other's homeland. the gwot could only realistically be prosecuted by insulating the american public from feeling its effects, even with 9/11 to lean on for solidarity and justification. periodic exchanges punctuated by long retrenchments seems a lot more plausible to me than a world war-scale conflict
just trying to make the math simpler, something in the middle is possible but doesn’t change the calculus much
Are there no more positive sum games left to play between the 2 powers?
sure, every trade is a positive sum game, just the number of negotiations over zero sum games threatens to unleash material negative sum games.
Are you planning to publish this series as a book? I'd buy at least a dozen copies to give to friends and family.
Loved the post.
Just a corollary: how would you hedge?
gold and silver “in China” (aka short rmb)