News David McWilliams

Saturday 3 December 2016

EU forcing us to take bite out of Apple could be core issue for next government

Published 03/02/2016 | 02:30

Taoiseach Enda Kenny greeted by German Chancellor Angela Merkel at a summit in Berlin: “The EU wants Apple to pay the Irish exchequer more money, and Ireland is actively arguing against this...”
Taoiseach Enda Kenny greeted by German Chancellor Angela Merkel at a summit in Berlin: “The EU wants Apple to pay the Irish exchequer more money, and Ireland is actively arguing against this...”

In global economics and finance there is a phenomenon called a "super cycle". This is a large structural shift in the world economy that can go on for a long time. Unlike normal business cycles, which last approximately seven or eight years, super cycles can last decades. A good example of these super cycles is what is happening in world markets right now.

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The emergence of China in the 1990s as an economic powerhouse is one super cycle because it is a one-off event that prompted a shift in global production from West to East. China's ferocious demand for raw materials drove up the prices of commodities all over the world, enriching countries like Russia, Brazil and Chile that supply raw material to China.

This super cycle has now come to an end and the collapse in commodity prices from oil to copper is the result of the end of the super cycle, which has been signaled by China's economy - eventually after 35 years of growth - slowing down. It's not likely that the world will experience such a huge shift again for another generation.

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