There are some fallacies with this argument. First of all, this has been mentioned on here before, but still worth repeating:
1) Most of modern GDP is related to electronics as well as the (((service))) sector. Literal intangible bullshit.
Things that matter, like food, still cost the same percent of your salary as before. Living standards in America are hardly different from 1950. The only different is more (((electronics))), more (((human services))), and more Third World freeloaders. A service-based FIRE economy (Finance, Insurance, Real-Estate), is grossly over-valued in official measurements of GDP.
A production-based economy like Russia and China is under-valued. In reality, Russia's real GDP is bigger than Germany, and China's is twice that of the USA.
Add to this:
1. Debt and QE in the US is counted in GDP - so, another few trillion dollars printed by the FED increases the US GDP. But is does nothing for the real economy, other than undermine it further and increase inflation and the size of the pop when the bubble bursts. It's now impossible to increase interest rates in the US and most of the West.
2. GDP is denominated in US$ which is a meaningless metric and only reflects manipulated exchange rates, not the real value of money.
Add to that that the EU, the US and criminal governments of countries striving to join Titanic called the EU in their GDP include profits from illegal activities - anything from prostitution, to child rape snuff movies to illegal drug and human-organ trafficking.
The GDP of a service-based economy can be measured in any arbitrary ways, as the US has constantly been doing, inventing creative ways to inflate the nominal size of its economy. In the US, even if you live in a house that you own, you would still contribute to the size of GDP by the so-called imputed rent, i.e., the rent such a housing would command in a market.
This contributes about 10% of its GDP. Chinese GDP does not count such as GDP, even if it largely follows the UN definition of GDP sanctioned by the West--apparently the Chinese government doesn't feel comfortable to use such arbitrary and fanciful measures in national accounting.
The US GDP is also buffeted by dollar's reserve currency status. Should it lose that status, the nominal GDP will likely lose 20-30% of its value.
In reality, GDP is a meaningless, manipulated metric which the West props up through all kinds of distortion techniques. It has no bearing on the actual situation.
2) The West may have an edge in science and technology, but keep in mind that as the winter approaches and the energy crisis grows bigger and bigger, we are looking at a situation where there can be a science shutdown as institutes that operate energy-hungry supercomputers, accelerators, and laser beamlines will shutter.
3) A lot of their currencies are failing too. The pound is on the deathbed, and with Germany crumbling, the Euro will be all but finished. The “sanctions debate” has been solved by a German and indeed Europe-wide economic crash. To Europe, the next decade will be a disaster. There may be recriminations against the price paid for letting its trade diplomacy be dictated by NATO, but there is nothing that it can do about it. Nobody (yet) expects it to join the Shanghai Cooperation Organization. What is expected is for its living standards to plunge.
Germany’s industrial exports were the major factor supporting the euro’s exchange rate. The great attraction to Germany in moving from the deutsche mark to the euro would avoid its export surplus from pushing up the D-mark’s exchange rate to a point where German products would be priced out of world markets.
Expanding the currency to include Greece, Italy, Portugal, Spain and other countries running balance-of-payments deficit would prevent the currency from soaring. And that would protect the competitiveness of German industry.
After its introduction in 1999 at $1.12, the euro did indeed sink to $0.85 by July 2001, but recovered and indeed rose to $1.58 in April 2008. It has been drifting down steadily since then, and since February of this year the sanctions have driven the euro’s exchange rate below parity with the dollar to $0.97 this week. The major factor has been rising prices for imported gas and oil, and products such as aluminum and fertilizer requiring heavy energy inputs for their production.
And as the euro’s exchange rate declines against the dollar, the cost of carrying its US-dollar debt – the normal condition for affiliates of U.S. multinationals – will rise, squeezing their profits.
This is not the kind of depression that “automatic stabilizers” can work “the magic of the marketplace” to restore economic balance. Energy dependency is structural. And the eurozone’s own economic rules limit its budget deficits to just 3% of GDP.
This prevents its national governments supporting the economic by deficit spending. Higher energy and food prices – and dollar-debt service – will leave much less income to be spent on goods and services.
It seems curious that the U.S. stock market soared – 500 points for the Dow Jones Industrial Average on Wednesday. Maybe it was simply the Plunge Protection Team intervening to try and reassure the world that everything was going to be all right. But economic reality raised its ugly head on Thursday, and the stock market gave back its phantom gains.
It is true that the end of German industrial competition with United States is ended on trade account. But on capital account, depreciation of the euro will reduce the value of U.S. investments in Europe and the dollar-value of any profits that these investments may still earn as the European economy shrinks. So reported earnings by U.S. multinationals will fall.
As a final kicker, Germany is contractually obligated to purchase at least 40 billion cubic meters of Russian gas a year until 2030. Gazprom is legally entitled to get paid even without shipping gas. That’s the spirit of a long-term contract. Berlin does not get all the gas it needs but still needs to pay. It looks like a long court battle before money will change hands – but Germany’s ability to pay will be steadily weakening.
For that matter, the ability of many countries’ ability to pay already is reaching the breaking point.
4) Lastly, let me say that the reason the US thrived so well post WW2 was solely because there was no real rival economic bloc to the West. Russia was a small player, China was an agricultural economy, and what we now call the “developing economies” (Brazil, India, South Africa etc.) were anything but developing. That is no longer the case.
If we calculate GDP by purchasing power parity, then the positions of these countries are even stronger: China is ahead of the United States, India is in 3rd place, and Russia and Brazil are higher in the ranking than Britain and France. India, China, Russia, Brazil and South Africa collectively count amongst the largest economies and the most populous nations of the world.
Just imposing sanctions on Belarus and Russia has all but broken the West's back. If they are foolish enough to cut off their noses to spite their faces and imposes sanctions on us too, the consequences will be far worse for them than it will be for us.
Having said that, I do agree that nuclear war will be completely unnecessary and of no consequence and will harm Russia. Which is why I don't think that will happen, nor do I think Russia is even planning to do that. If anything, it's the West's intransigence on this that is being exposed with each day:
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