The Big Cycle: Reaching the Top

Economic Cycle & Competitiveness - Leading countries' increased wealth leads to higher labor costs, reducing competitiveness compared to countries with lower labor costs [1] - Other countries imitate leading powers' methods and technologies, further diminishing the leading power's competitive edge [1] - Increased wealth leads to decreased work ethic, focus on leisure, and potential decadence [2][3] - Generational shift from wealth creators to inheritors results in less resilience and increased vulnerability [3][4] Financial Vulnerabilities - Prosperity leads to increased risk-taking and borrowing, creating financial bubbles [4] - Reserve currency status encourages excessive borrowing, leading to large debts with foreign lenders [6] - Short-term spending power is boosted, but long-term financial health and currency value are weakened [7] - Borrowing sustains power beyond fundamentals, financing overconsumption and military conflicts [7] Social & Political Implications - Wealth gaps widen due to the rich reinforcing their power through privileges like better education and political influence [5] - Growing wealth inequality leads to resentment and a perception of unfairness, potentially causing conflict if living standards decline [5][6]