The passage of the health care law shows that the US empire is declining because it illustrates the fact that people expect the state to take care of them, David Murrin, the co-founder of Emergent Asset Management hedge fund manager, told CNBC.
On Tuesday, US President Barack Obama signed into law health care legislation that expands health coverage for the poor, imposes new taxes on the rich and forbids insurance practices such as refusing coverage to those with pre-existing conditions.
In their expansionary phase, empires force people to go out, seek risks and fend for themselves, Murrin said, reminding of the dismantling of the British empire after the war, when the National Health Service, which ensures universal health coverage in Britain, was created.
"This (empire decline) is actually a dead-set course that societies get into and it will happen very quickly I'm afraid," he told "Squawk Box Europe."
"As you start to build a system it becomes cohesive because of its success… the fractures in the American system I think are more apparent than ever," Murrin added.
China's rise will be much faster than most people anticipate as the country's military prowess increases, he said.
"We all know there's going to be a change, the surprise will be the pace of that change," Murrin said, noting that "all empires when they decline they underestimate their challengers."
The peak for commodities will be reached somewhere between 2020 and 2025 and it's the period before that that must be watched, as China seems much more willing to take risks than Western countries, he predicted.
"You have a lot more males in China then you do in the west," he said, noting that 56 percent of the Chinese society was male, because of the country's policies to control population and because of traditions which value males more than females.
"What that means is that they're far more risk-oriented than a society in the West…if you look at conflict and your ability to risk your males in conflict," Murrin explained.
China has started to innovate and has worked out what the West's weaknesses are so it can overtake developed countries, he added.
The country is investing heavily in Africa, which Murrin calls a "huge opportunity" because it has the best demographics in the world and a big resource pool.
"I think Africa, as a generic theme, is the hottest thing in town," he said.
Wednesday, March 24, 2010
Health Care Law Signals US Empire Decline?