Gloomy predictions for 2009

Khyber Pass will be ultimately cut off by insurgents on both ends, making Afghanistan an even bigger debacle.

India

India will continue to suffer from business flight, as demand continues to crash. It's geographical isolation from the main centers of commerce will further hamper the situation, as fewer maritime transports are plying the sea lanes. Continued tensions with Pakistan and continued Pakistani and Maoist terrorism and violence will further damage the business environment.

Over all, India will suffer like any primarily exporter nation, but she will come through relatively sound, with fewer internal divisions than many nations. Look for a broad border war to start by late spring, with Pakistan. After initial gains, India will bog down into a prolonged series of battles. Under massive external pressure and internal pressure and the cracking of Pakistan, both sides will make peace. India will claim all out victory, though most of its objectives will not be met and Pakistan will claim victory because it averted total defeat.

China

China is in for an era of major instability. The 100,000+ factories that closed in 2008 will be followed by as many in 2009. The Chinese domestic consumption market is just to small to suck up more than 20% of the production it presently has. China will be further weakened by the hyper inflating dollar. Friction will come between China and America in late summer, when it will become obvious to China that the US is hyper inflating its way out of the US debt that China holds, making its investments worthless. In response, China will nationalize all US factories on the main land.

This act will at once bankrupt dozens of US companies and further crash the already chronically ill American economy and it will force a trade war on the US that may force it to bring some production back in, once the equipment can be replaced.

Either way, look for US/Chinese relations to be down right hostile by the end of 2009. Internally, China will suffer much instability and rioting, as hundreds of millions of unneeded factory workers are forced back into their dirt poor farming villages. Luckily for the Chinese authorities and no so luckily for the citizens, extreme violence is always a top option for China's authorities ad will be used often and to effect.

Japan

While Japan's export base economy will suffer for the same reason the rest of the world is suffering, Japan still retains a strong, well educated and affluent society. Along with strict cultural cohesion and a high rate of savings, Japan will maintain much of its wealth. Protectionist measures have secured most of Japan's industry inside of Japan.

This, coupled with the weak US, will prompt Japan to recreate, albeit without war this time, a new Asian Co-Prosperity Sphere, drawing into it's orbit various other local nations. Through 2009 there will be polite friction, as Japan pushes US influence out of central Pacific rim and south east Asia. As the dollar falls to hyper inflation, the Yen will be seen, by the second half of 2009, as the standard barer of Asian stability and success and will come to replace the dollar as the dominant power in that portion of the world.

Japan will see Russia as, at once, both a key energy supplier and trade partner and as a competitor to Asian domination, though a minor competitor. With China ripped by strife, Japan will have a free hand in Asia.

Stanislav Mishin

The article has been reprinted with the kind permission from Stanislav Mishin and originally appears on his blog, Mat Rodina