John Mauldin's best prediction ever.

John Mauldin is a well known economist who I have been reading for quite some time now.  I have generally observed him to be shooting behind the duck a bit but he recovers more quickly than most of his peers and gets back on point pretty quickly.  His latest FreeMail was written by someone named Patrick Watson who John calls his associate.  So even though Mauldin didn't write the following, he allowed it to be written in his FreeMail so I assume he agrees with it.  In any case, Patrick writes,

"Globalization ramped up slowly for a century or so before entering a new phase in the 1960s. I was born in 1964, so the explosion of the global economy roughly spans my lifetime. Mine is the first globalized generation. But if I reach 100, I suspect I will see children of a de-globalized generation.

That’s my theory: We are going full circle.

Humanity spent the last 50 years globalizing. Now, thanks to certain technologies, that whole process is going in reverse. I think historians will mark the 2008 financial crisis as the turning point:  Peak Globalization.

 I don’t say this because I want a de-globalized world. What any of us want or don’t want is irrelevant. I believe the transition will happen whether any of us want it or not.

It will not happen in a linear fashion, though. The process that brought us to this point had starts, stops, and slowdowns. Reverse globalization will have ups and downs, too, but a new set of technologies will keep pushing it forward.".

Ding ding ding.  We have a winner.  This is exactly how I have been describing things as well.  The run up of global debt make everyone want to work together but as the credit peaks there will be dis-unification and a trend toward nationization.  At a lower fractal level, states will take back more and more power from the federal government.  I suspect that there will even come a time when some state, perhaps my home state of Texas or maybe conservative Utah, will announce a state currency that competes with the greenback.  I know, I know, sounds insane.  But how many times have my insanities eventually turned into common sense in the fullness of time? More than my fair share I reckon.  And the reason for that is simple: I understand how fake money works; how it changes the behavior of the herd.  As the hold of fake money weakens upon the herd, the herd will go back to the old ways of us vs them.  Trust will no longer be given out easily for the con men to take advantage of.  Once bitten will again result in twice shy.

As Watson says, it doesn't matter if you want it or not.  The writing is on the wall for those with the eyes to see it.