Olympic Predictions | Bedford Real Estate

Which country will take home the most medals?  That is an easy call because medal count and economic power go hand-in-hand.  China is ascending while Russia is slipping.  Despite sluggish economic growth, the United State maintains an indisputable top economic position.  Therefore, the medal count winners will be, in order

1. United States
2. China
3. Germany

The Soviet Union rivaled the U.S. for top slot in the medal count for many decades as the two economies slugged it out during the Cold War.  Soviet communism failed to produce meaningful economic growth from the 1917 Revolution to the beginning of the Second World War.  Then, after the war, economic growth took off and Russians and satellite countries began to win many Olympic medals.  The first person to orbit the earth was a Russian in 1961.  Economic growth under communism should not have occurred but it did and can largely be explained by the tremendous amount of goodwill and gratitude Russians felt toward their government after defeating Nazi Germany.  But the cost came at an unimaginable high price: the deaths of 20 to 25 million Soviet citizens – an average of more than 100,000 deaths each week.  Such a high death rate explains for a vast number of Russians today never having met one of their grandfathers.  Arbitrary arrests, midnight knocks on the door, and gulags scared the daylights out of people, but many still believed and were proud of their country in defeating Germany.  Russians were willing to work hard for little personal gain in this egalitarian country because emotions and memories ran high.  Workers were doing it for the motherland.  But the inevitable slow decay of the government-run economy began to make its mark over time.  Government involvement naturally leads to massive endemic corruption which saps the life out of innovative ways of doing things.  Slow decay then suddenly turned into a complete collapse of an 80 year experiment in government-controlled collective ownership.

After the disintegration of the Soviet Union, many former Olympic stars and trainers pushed their children into new sports where real riches could be a possibility.  Young girls in particular were given a tennis racket.  As a result, outside of the Williams sisters, East Europeans have come to dominate the top rankings in professional tennis.  Traditional Olympic sports that garner little monetary return have therefore become less attractive in the former Soviet countries.  Therefore, Russia and East European countries will be out of the top medal count in the 2012 Olympics.

While the Soviet Union was undergoing an ascent followed by a descent, China was nowhere to be seen in the medal count.  Chairman Mao had economically ruined and starved the country with his brand of communism.  After the death of Mao, however, Chinese government started to permit small private land ownership.  Private property rights, as have been proven again and again in history, led people to desire to produce a bit more than before.  A farmer produced more than can be consumed on his private plot and sold the surplus in exchange for a bicycle.  A bicycle manufacturer now needed to expand the production facility and hire more people.  In addition, foreign companies were invited into Chinese special economic zones with very low taxes.  The rest is history and China is now the second largest economy in the world, though currently at only half the size of the U.S.  That means in regards to the Olympics, the U.S. will get more medals with China coming in at second.

Japan and Germany are the third and the fourth largest economies, respectively.  The Japanese economy has been stuck in neutral for two decades, quite dispiriting, while Germany has been advancing forward.  So the momentum and edge goes to Germany for the third place medal count.

In future years watch out for Brazil.  Brazilian real estate organizations (SECOVI and COFECI) and NAR have been working together intensively to help develop the Brazilian real estate market.  Brazilians are very much interested in the workings of multiple listing services and statistical data reporting.  There is nothing as motivating as owning real property and then being able to trade-up later in life.  Therefore, the long-term economic growth rates will be quite robust in Brazil.  In this year’s Olympics, Brazil will crack the top 20 for medals.  By 2020, expect Brazil to be in the top 3.