In the modern era (1896-present), the Olympics have only been cancelled in wartime: 1916 (World War I), 1940 and 1944 (World War II). But world war is not the only circumstance that could derail the Olympics; a global crisis in energy, finance or geopolitics could send the risks and costs of the Olympics beyond the reach of most participants.
The key to understanding the odds of an Olympic cancellation is Liebig’s Law of the Minimum, which states states that “growth is controlled not by the total amount of resources available, but by the scarcest resource.”
As I have outlined elsewhere, the three resources that will become increasingly scarce globally going forward are:
1. Geopolitical stability
2. Energy abundance (i.e. abundant and affordable to the bottom 95%)
3. Financial/currency stability
A global scarcity of any of these three could sink the Olympics in 2020 and 2022. I’ve discussed the geopolitical, financial and resource risks in four recent posts:
The current confidence that everything will remain stable for years to come is based on a misleading extrapolation of current trends. Just because the global status quo has managed to maintain a facade or normalcy for the past eight years does not mean the New Normal (central banks pumping $180 billion a month into the global financial system to keep it afloat) is identical with the pre-crisis Old Normal.
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