The New Silk Road?

Ben Simpfendorfer has a recently released book titled “The New Silk Road.” The subtitle reads: "How a Rising Arab World is Turning Away from the West and Rediscovering China". Forbes.com has posted an excerpt on their website:

The Arab world was always rich. But it has recently leapt into the ranks of the super rich and its status as a player in the world's financial markets had grown. What happened? Three events had converged to change dramatically the fortunes of the Arab world. First, a surge in oil prices. Second, the rise of China. And third, a decision by Western households to embark on a historic, and largely debt-fuelled, consumption binge. … America's financial crisis might yet act as a partial circuit breaker. American households, burdened by their large debts and forced to save more of their monthly income, will struggle to purchase as many consumer goods from China. However, it's a change that will play out over years, rather than months. Moreover, American consumers aren't likely to stop shopping altogether, so Arab investors will continue to play an important, if reduced, role in financing an American trade deficit. Alternatively, investors may find the American government increasingly in need of funds, as was the American consumer during the past decade. After all, bailing out the country's financial sector isn't going to be cheap. The result? The Arab world will remain an important creditor to the American economy for the foreseeable future.

That is true especially in the Obama age of deficits, deficits, deficits. President Obama’s first budget as US President has America going between $1 to $10 Trillion in debt (the estimates vary). If the West insists on going socialist, then yes China and India will overtake the west. If, on the other hand, the west wakes up (yes you Europe and leftist/high tax America) then Simpfendorfer’s thesis will be dead. A road has a Point A and a Point B. The original Silk Road connected east and west, with the Middle East and Central Asia at the center. Any Silk Road in today’s day in age will have the same characteristics. It cannot be all one way traffic. The west and the east and everywhere in between will have to be involved or it is not much of a road - but more like a Cul-De-Sac.