re: #6 Bob Levin

Third, the next election might be a huge disappointment for anyone expecting a rise in Tea Party sentiment, as these guys could easily get clobbered.

No doubt, the next American election can be seen now, 10 months prior, as turning either way, and the Tea Party-ing GOP may very well fall on its face.

But Posen is addressing how the world economy is changing in the long term, and increased volatility between and inside of nations can play out in many, many ways and the actual path taken may be finely tuned to many parameters. What Posen presents is that such changes, without describing their end state, increase in magnitude and frequency (hence increased “volatility”). Thus the Tea Party folk gaining power one election (2010, sort of in the House) and then losing devastatingly in the next is indeed volatility.

More to Posen’s point - it’s all about geopolitics, and how the US will be more constrained in the number of options available to us on the world stage. We already see that with the current administration. Indeed the current GOP candidates like to beat their chests (save for the isolationist Paul) as if they could be the next GWB and start wars here and there. But Obama is acting exactly as one would expect of a national leader whose actual options (strategic - we’re not talking tactics here) are increasingly limited.

This is particularly true when it comes to monetary matters, which is why our leaders so willingly support bank bailouts, even outside of the US, and don’t want to start anything serious with China over the Renminbi valuation.

Of course Posen could be in error. One possibility is that the international order could freeze up (sort of like melted chocolate freezing-up when a cold liquid is poured into it.) Nations could all become too afraid to do anything, and some extra effort is put towards maintaining the status quo. However, I don’t see that happening for the very reason I outlined - resource competition will drive certain nations, and certain regions of the world, into hyper-competition.