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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Personal Finance / Macroeconomic Trends & Risks
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Author: ajm101 ✭  😊 😞
Number: of 4581 
Subject: 10 Sep 2026 - "Bessent and the Bonds", p
Date: 09/10/26 2:59 PM
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Separately, but around the same time in the 1960s, René Thom laid the foundations of en.wikipedia.org - Catastrophe theory. It is a subfield of dynamical systems. Consider it a younger sibling of the more trendy en.wikipedia.org - Chaos theory. This is a bit less undergrad fodder unless it's a pure math program (or in its applied form of engineering).

Summarizing that, if you model a system as differential equations, it seeks to model what a catastrophic change is and what different types of catastrophes - in a mathematical sense - exist and categorize them. There are 7 fundamental types, to my knowledge (I'm not a practitioner), and they are cusp, swallowtail, butterfly, and umbilic (elliptic, hyperbolic, and parabolic).

I'm leaning on AI a bit, since it's not my area, but my thesis writing this is that what Krugman is describing is topologically very similar to the punctuated equilibrium model of evolution, which would be a cusp type catastrophe: en.wikipedia.org - Catastrophe theory.

I would characterize the steady states as a US led world order with the USD being the primary basis for trade and either a multipolar world or China / CNY world order. When you see the US led global order following a catastrophe theory archetype, which is proven by real world systems like phenotypic evolution, it is not a good thing.

What would you want to watch if you believed this? Some earlier candidates would be differences in financial settlement volumes (SWIFT vs CIPS), oil settlement for Dubai crude switching from USD, rapid strategic/diplomatic alignment by Malaysia, Indonesia, India, Nigeria, Kenya, or the UAE towards a friendlier China alignment ; other commodity prices increasing in USD; or capital flight out of the USD.

to be continued...
Most of these are happening already.

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