Return Of Investment in relationship with the size of the saving, and eigenstates/chaotic attractors Links:

Hypothesis:
The consumption share from the GDP will fall if the Return On Investment for small savers will be significantly lower than for big savers

Past value of the difference between small saver and big saver ROI can be calculated easily.

Best example the consumption share from the GDP decreased dramatically between 2000-2015 in China.
For a long-time Mr Pettis arguing about that the lower than inflation interest rate was a hidden channel to transfer money from the consumers to  the investors.

If someone try to correlate the average wealth of any individual in China with the average yearly interest then I'm 85% sure it will be highly correlated.


Obviously if we want to calculate it for the future then it is a different kind of matter.

At the moment we are in an eigenstate, chaotic attractor or whatever you wean to call it.

The process periodicity falling back to the eigenstate, so to calculate the ROI easy, it simply following a normal distribution in the given eigenstate.


However as soon we will move out from this eigenstate it will change dramatically
Examples:
1917 Great October Revolution - need any expőlanation? Prior of it the Czar was a low risk borrower, after it the ROI became 0 :)
-Collapse of the EU
-Change in the interest rate policy in China
-Policy change toward stronger union and worker's  rights in Japan or Germany
and so on.

All of them or certain partial combination of them will bring the system toward a new eigenstate.

Links:
http://data.worldbank.org/indicator/NE.CON.PETC.ZS

http://en.wikipedia.org/wiki/Attractor

http://en.wikipedia.org/wiki/Eigenvalues_and_eigenvectors

Rising of a world power - how China can be thebiggest military player in the West pacific region.

Due to the military power balance many country can continuous anti-Chinese military and foreign policy in the West-Pacific region,and around the life critical Chinese sea routes.

However as soon China develop a capable Naval force any anti-Chinese  military/foreign policy will have the same effect on Japan, Vietnam ,Malaysia or any other country in the region as the ant -US policy for Cuba or the anti Russian policy for Ukraine.

The US has the advantage of the many friends because they are the dominant naval power in the region.As soon as there is another dominant player in the region everyone there will try to align to him.
How could it happens?
The consumption in China is quite low but the investment is high.
One of the oldest way to increase consumption by government force is the military spending.China has low personal consumption and high investment, so it is fairly easy to increase by a magnitude the military spending , even with increasing consumption and stagnant GDP.

The Wages of Destruction: The Making and Breaking of the Nazi Economy is quite good description fo the possible future evolution of Chinese naval /military force.
Germany was in the same position like China now after the first world war.

However there is a critical difference: Germany had  way smaller economy than the US back then ,but China has roughly the same economical size like the US now.

DATA HERE - WORLD BANK PERSONAL CONSUMPTION
If we dig into the data then we can see that China consumption level is only 34%, compared to the 68% US share.
Military spending is 2.1% (China) vs. 3.8% (USA)

So China can increase the military spending say to 30% without affecting the level of living, even having capability to increase at teh same time the level of living in China .

The US doesn't has this luxury , the upper level without serious restrictions on the "American way of live"
 could be around 6-8%.


If we consider that the Chinese and US economy roughly has the same capacity / capability, then it spells trouble for the US military dominance.