Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

Global economic future news and discussion

Discussions about the economic and financial ramifications of PEAK OIL

Re: Global economic future news and discussion

Unread postby Graeme » Thu 01 Jan 2015, 16:20:19

Global economy on shaky ground

The world economy is on shaky ground entering 2015.

In a sobering pointer, the prices of iron ore, oil and natural gas – commodities that fuel the global economy – have ­collapsed to around five-year lows.

Europe and Japan are struggling to revive their economies and are battling to stave off deflation.

A soaring US ­dollar and anticipated US interest rate rises are pressuring the currencies and funding of emerging market economies.

China’s growth is moderating as it tries the tricky transition from debt-fuelled construction and investment to domestic consumption-driven growth.

Outside of the recovering US and United Kingdom, there are few bright spots on the world economic map.

The world economy was supposed to strengthen in 2014. It failed ­miserably. So after persistent let-downs since the global financial crisis struck six years ago, there is little to be ­optimistic about in the year ahead.

While the potential for China to fall over and hurt Australia is well known, several other macroeconomic risks stand out for the world in 2015.

US FED INTEREST RATE RISES
As the US economy strengthens, the Fed, chaired by Janet Yellen, is almost ­certain to raise rates from near zero in 2015. Yellen has virtually ruled out rate increases at the January and March Fed meetings, but from then on monetary tightening is a live option.

“A tighter monetary policy of the Federal Reserve will potentially be the most important factor affecting the ­global financial markets next year,” Capital Economics chief markets ­economist John Higgins says.

Despite the Fed’s dovish overtures, the best US economic growth in 11 years – a 5 per cent annual rate in the third quarter – means rates may rise sooner and more quickly than anticipated. Anticipation of higher US rates is already sucking US dollar liquidity out of emerging market economies.

Higher rates will pressure leveraged borrowers and investors holding junk bonds. Investors piled into higher-risk securities in search of returns in the low interest rate world.

The unwinding of the Fed’s stimulus will ratchet up repayment pressures and may rattle bond markets. Globally, an offsetting factor to the Fed’s tightening will be the extra stimulus from central banks in Japan, Europe and China.

But the Fed remains the key central bank influence on global capital flows and currency movements.


afr
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Mon 05 Jan 2015, 15:35:40

CEOs are optimistic about 2015 prospects

CEOs see the glass as half-full for the U.S. economy in 2015, but overseas turmoil is still a major concern. WSJ's John Bussey joins the News Hub with the details. Photo: Getty

Work pressures, combined with rising inequality, are driving political changes. Major parties in many countries have lost support. More extreme and populist parties have gained support, complicating political decision-making and increasing uncertainty. And economic difficulties and loss of faith in traditional political parties contributed to the rise of fascism and communism in the 20th Century.

Despite a small group of vocal and well-financed deniers, the effects of environmental change are evident. Extreme weather events, hurricanes, floods, droughts, and fires take an economic and societal toll. But attempts to stabilize and reduce emissions would increase energy costs, and also result in losses for investors in standard traditional fossil-fuel assets.

Geopolitical risks also are rising. Nationalism in Russia, China, India and Japan is resurgent, heightening political tensions. For example, the Islamic State threatens to overturn a Middle East order that dates back almost 100 years. Deep-seated religious and ethnic divisions will be difficult to resolve. The risk is that the region becomes a series of failed states, dominated by various warlords.

Few of the problems that led to the Great Recession of 2008 have been resolved.

Weak economic growth and high-unemployment feed political extremism. They create geopolitical risk-taking, as nationalist leaders seek to divert attention away from domestic economic weakness. Government spending to revive growth increases in sovereign debt. This forces continued loose monetary policies, making eventual normalization ever-more difficult. Low commodity prices can lead to disinflation or deflation, making high-debt levels even more unsustainable. Low growth drives tit-for-tat competitive QE programs and low rates, further affecting global trade and growth.


marketwatch

European, global economy depends on Merkel in 2015

If anything is certain about the new year, it is that much of the world’s stability and economic health will depend, in large part, on German Chancellor Angela Merkel.

Merkel’s leadership in 2014 was a curious mixture of boldness and timidity. It fell to her to confront Russian President Vladimir Putin. And her efforts are what secured the unanimity among the European Union’s 28 fractious nations that was needed to impose meaningful economic sanctions to deter further Russian aggression in Ukraine.

As helpful as Merkel has been with Russia, however, she has so far only harmed efforts to address the faltering European economy. On both fronts, next year will be harder.

Europe’s Russia challenge will get tougher, because the pressure to repeal sanctions will rise. The current measures against Russia begin to expire in March. Yet until there is a more meaningful settlement that ensures Putin can’t continue his semi-covert war in Ukraine, sanctions need to stay.

As for the EU, new forces for disunion will emerge. British Prime Minister David Cameron will be pushing for changes in the way the bloc works that help him persuade Britons to vote against leaving it. Merkel will need to simultaneously rein Cameron in and convince other EU leaders that it would be in their interests, too, to return some powers to national governments.

At the same time, the euro crisis threatens to heat up again. The favorite to win early elections in Greece next month, the neo-Marxist Syriza party, says it will refuse to carry out the further austerity measures required for the country’s remaining bailout funds, and promises to roll back economic reforms put in place under the terms of the country’s 240 billion euro loan program.


theolympian
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby dorlomin » Mon 05 Jan 2015, 17:36:15

Oil price dips below $53 as fears of global economic slowdown intensify

Deflation is sniffing round the outside of the village and looking for a way in to start devouring the villagers.
User avatar
dorlomin
Light Sweet Crude
Light Sweet Crude
 
Posts: 5193
Joined: Sun 05 Aug 2007, 03:00:00

Re: Global economic future news and discussion

Unread postby Graeme » Fri 09 Jan 2015, 19:02:28

The global economy could be on the verge of a once-in-a-generation transformation

Few things illustrate the 35-year boom in Western asset prices better than the cost of a London house. In 1980, according to Nationwide data, you could have bought the average home for little more than £30,000. Today, the same property would set you back £407,000, or more than 13 times as much.

Even adjusting for inflation, the gains are spectacular. Relative to average earnings – which are themselves up by a lot more than ordinary inflation – house prices have doubled.

But it is not just residential property. Equities, bonds, agricultural land, even personalised number plates – virtually all asset prices have sky-rocketed. There have been ups and downs, admittedly, but the direction of travel has been clear. It is as if all the inflation that used to go into consumer prices has been diverted into financial assets and real estate instead.

All this, however, may be about to change – for we could be on the cusp of one of those seminal, once-in-a-generation shifts that completely alters the way we experience, and respond to, the world around us. For the past three and a half decades, the balance of advantage has resided unambiguously with capital. Now, it may be turning back to labour.

Such a change has been predicted many times before, only for those prophecies to be proved wrong. It could be that past trends continue for a while longer yet. But a unique array of unfamiliar factors is fast coming into play. So here are the five primary reasons for believing that the long boom in asset prices – on many measures, the biggest the world has ever seen – may finally be drawing to a close.


telegraph
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Sat 10 Jan 2015, 17:26:28

U.S. Retakes the Helm of the Global Economy

The U.S. is back in the driver’s seat of the global economy after 15 years of watching China and emerging markets take the lead.

The world’s biggest economy will expand by 3.2 percent or more this year, its best performance since at least 2005, as an improving job market leads to stepped-up consumer spending, according to economists at JPMorgan Chase & Co., Deutsche Bank AG and BNP Paribas SA. That outcome would be about what each foresees for the world economy as a whole and would be the first time since 1999 that America hasn’t lagged behind global growth, based on data from the International Monetary Fund.

“The U.S. is again the engine of global growth,” said Allen Sinai, chief executive officer of Decision Economics in New York. “The economy is looking stellar and is in its best shape since the 1990s.”

In the latest sign of America’s resurgence, the Labor Department reported on Jan. 9 that payrolls rose 252,000 in December as the unemployment rate dropped to 5.6 percent, its lowest level since June 2008. Job growth last month was highlighted by the biggest gain in construction employment in almost a year. Factories, health-care providers and business services also kept adding to their payrolls.

About 3 million more Americans found work in 2014, the most in 15 years and a sign companies are optimistic U.S. demand will persist even as overseas markets struggle.


bloomberg
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby vox_mundi » Sat 10 Jan 2015, 20:41:14

The protesters who are trying to upend the ‘fantasy world’ of economics

... Julie Matthaei and Keith Harrington demonstrated in front of the Sheraton Boston on Friday, Jan. 2 for alternative views in economics, as the Annual Economic Association conference kicked off inside.

There were leaflets, a manifesto, and this warning: “On campus after campus, we will chase you old goats out of power. Then, in the months and years that follow, we will begin the work of reprogramming the doomsday machine.”

On Friday, on the eve of the annual meeting of The American Economic Association in Boston, attended by many of the top economists in the United States a small group of students is battling for the soul of economics

... Harrington, a community organizer and videographer, once worked as a climate change activist. But after a few years he came to see that the real fight was elsewhere. “The type of activism we were doing around climate was running into systemic challenges,” he said. “We couldn’t get the types of climate change policies we need without system change, without addressing questions in economics like growth and limits to growth.”

Harrington now runs a campaign called Kick it Over, which aims to combat what it describes as “the fantasy world of neoclassical economics — a faith-based religion of perfect markets, enlightened consumers and infinite growth that shapes the fates of billions.” The project is connected with the anti-consumerist magazine Adbusters, which had gestated the original idea behind the Occupy Wall Street movement. Harrington, who studied alternative economics at The New School, hopes to reform the profession from the inside, starting with the way it’s taught.

“When I was in school, I started realizing how limited was the range of economic ideas that students were exposed to in the classroom,” he said. “Neoclassicism is essentially the standard for 95 percent of the graduate departments in the country.”
User avatar
vox_mundi
Intermediate Crude
Intermediate Crude
 
Posts: 3939
Joined: Wed 27 Sep 2006, 03:00:00

Re: Global economic future news and discussion

Unread postby Graeme » Sun 11 Jan 2015, 16:25:03

VM, Thanks for your post. I always knew that our economic system wasn't perfect so it seems that the younger generation will fix it one way or another sooner or later. I've seen a lot of good ideas but it appears that new legislation is required. Our existing political system (the scandinavian model is good) may be adopting changes anyway:

India bright spot in global economy; caste bias a concern: World Bank

World Bank on Sunday said India can grow at 6.4 per cent in 2015 and accelerate further next year, but cautioned that an enduring "bias" on the basis of caste and other factors can impede prosperity.

The government, however, is well aware of this issue and the World Bank sees India as "a bright spot in an otherwise mediocre global economic outlook," the multilateral lending agency's president Jim Yong Kim said here.

"Indian society has an enduring exclusion that is based, among other things, on caste identities. This bias can impede shared prosperity, serving as a basis for discrimination in many spheres, including in employment and other markets, as well as in public services," he said.

Acknowledging the government's efforts to address such issues, Jim said that Prime Minister Narendra Modi has focused on programmes to promote "broad-sharing of its benefits", in addition to action that will accelerate growth.

"Its (government's) special allocation of a fund for entrepreneurs from among the scheduled castes, and its focus on fixing bottlenecks so that money earmarked for the scheduled tribes reaches them, are both ethically just and economically sound responses," he added.


indiatimes
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby joyfulbozo » Mon 12 Jan 2015, 05:42:30

Global economy will decline for sure... in 2015..!!!
joyfulbozo
Wood
Wood
 
Posts: 45
Joined: Fri 10 Oct 2014, 06:33:12

Re: Global economic future news and discussion

Unread postby radon1 » Wed 14 Jan 2015, 15:27:49

http://www.business-gazeta.ru/article/122867/

Google-translated excerpt. Also quoted other excerpts from this article in other relevant threads.

"2015 - YEAR FALL YUAN"

- What's happening to the world economy?

- Like it or not like it, but the trend of the global economy are set mainly by one factor. In a broad sense, it is the economic policy of the United States of America, which splits in two: is the policy of the US government has a policy the Fed - Federal Reserve System. These two policies are not the same and not really consistent, which also creates problems for the world economy. But in any case, without analyzing this factor, we can not understand what is happening in general.

Let's see. The United States Government has reported in this fiscal year, which they ended October 1 to a record low for the last time the budget deficit of 2.8 percent of GDP to the US. However, keep in mind that due to last year's government shutdown (stopping the government) a significant portion of the costs that should have been made in the past fiscal year, have been made in this, in the current fiscal year. You see, they formally belong to the past year, but in fact from an economic point of view, they have influenced the current year. And significantly affected because it is a real stuffing money. It is this circumstance largely determined the fact that this year has been more or less calm, at least in its first half. He was calm and the United States, it was relatively quiet and emerging markets, and relatively quiet for Europe.

Now the results of budget cuts began to affect, and see what happens. Now all are revising our outlook for the coming year - the IMF, World Bank - all who do it, downward. Because everyone knows: the inflow of fresh money into the economy will not. Accordingly, there is no growth. It will be much smaller than it is.

Reduce costs - it is the policy of the US government. Now about Fed policy. It is this year coincides with the policy of the government, because at the end of last year began to decline program of quantitative easing (QE). In October, the program was halted. And now the big question arose about what will do the Fed, because many expect that it will begin to raise rates. But it should be said at once: the Federal Reserve itself, in my estimation, has not yet developed a strategy for the next year.

- Since the collapse of the system is located in the last 10 years, or not yet?

- They themselves do not believe that they are in collapse. Of course, they realize that they are in a situation in which never were. But nevertheless believe that sooner or later it will cope if they behave correctly. And then economic growth alone will resume all the problems that were somehow solved.

- And what influence the reduction stuffing money that comes with 2008?

- The first is under attack were emerging economies. Currencies of all developing countries in a fever. In February fell even yuan, and from what I understand, now all converge in the forecast for that next year it will fall. So the next year - the year of the fall of the yuan - the strongest emerging currencies. I'm not talking about the other currencies of developing countries, they are very much fell against the dollar. In the same row, and Russia. We somehow forget that the ruble began to weaken at the beginning of the year, along with all other: Indian currency fell and Brazil.

CONCEPT OF KICK

- And what will happen to the world economy?

- The prognosis depends on the strategy of the Federal Reserve System. The Fed is now in a very difficult position. How Come? Expected of them, that the reduction in rate of QE will be raised. Last time this happened in 2007. This means that the dollar will strengthen further, for example, in relation to the euro.

Where will this lead? I have seen data to October, it so happened that one day they published States and Germany. Industrial orders in US significantly lower expectations, while Germany is much higher expectations. Ie industrial orders go from the United States to Germany. Soon it will be expressed in the fall of industry in the US and the possible growth of the industry in Germany. And the Fed knows this, because there is, at its last meeting, the issue has already been discussed.

And here he is, corridor opportunities: Once you got is not very significant - 1.24 - 1.25 of a penny - depreciation of the euro against the dollar, and already there is a significant change flow. Deteriorating foreign trade balance data for the US, in general, everything slows down.

- That is the strengthening of the dollar has on the US economy?

- Even a slight strengthening of the dollar, a slight shift of as if in a few months can destroy all the positive results that they considered to be achieved. I repeat, the Fed sees it, but the market expects that the rate will be increased. And from my point of view, in a good autumn 2015 the Fed to announce a new program of quantitative easing. While here, I do not consider the factor of the global decline in prices for raw materials.

- What accounts for expectations to raise rates?

- It is believed that the zero rate - this is not normal. See, really fell unemployment officially. Data on job creation grow. By the way, in October, assuming Initial jobless claims, they almost reached historic lows. Figure was - 266, and a historic low - 258,000 initial claims for unemployment insurance, which was typical of the period of rapid growth. Then this figure has deteriorated, that is, it was one week in all this well, but it was the same! Now the figure is kept at about 300 thousand, but it is still considered the norm.

- In a word, your point of view, America's economy is recovering or not?

- Let's just say it is temporarily cured. How Come? Because in fact there was a large injection of liquidity. In addition, thanks to shale gas revolution they managed to stabilize the trade deficit. This local growth spurt associated with the influence of local factors existed. But as soon as slightly strengthened on this basis, the dollar, the whole trend went back. The deficit is growing, orders go, and the Federal Reserve will have to decide on a new quantitative easing. And all of them are waiting for a rate hike.

- There is a third solution: Germany oxygen shut ...

- It should be somewhere somehow maneuver. In fact, the solution is clear. It is in a sense comical. Why Bernanke ( Ben Shalom Bernanke - Chairman of the Board of Governors of the US Federal Reserve from February 2006 to February 2014 - approx. ed .) and said that Fed policy and government policy are incompatible. He wrote regularly, after each meeting, "malyavu" government in general to all, but including government: expensive American government that you do nonsense, reduce the budget deficit? Of some abstract considerations? I've been trying to print money, for what? In order to make loans cheaper for you 2 per cent, 2.5 per cent penny. Now less than 2.5 percent of the value of 10-year bonds. Print money, do not worry. Dispersal of the economy as quickly as possible.

From which comes the Fed itself and the current economic theory, the theory of the crisis? That during the crisis the economy need to give a good kick to it from this kick soared well, so that could waved his own wings. And then she earns. Will wave of growth, and due to this "free flight" you recoup the cost of the most kick. And Bernanke wrote: I see that you kick the economy gave a little, although I will create all conditions for this.

Who read my book - will understand that such a representation is false. But, well, it worked before.

- Since 70 years old, huh?

- Yes, 70 years. Just was a time when there are conditions for growth. And how do you interpret the result, that is another matter. Whatever you do, you will still increase anyway will. And you interpret a certain way. The concept of a kick, flying kick and paying for - an interpretation of what was. Bernanke called for: give a kick, and now the Fed reduces its and the government.

- If the Fed did raise rates, then what?

- It will be a general ... 2015 will be very difficult, very antsy. And then they in any case have, in my view, to declare QE.

- Again ?!

- Again. But they sell QE, I do not know. Let's put ourselves in the place of Janet Yellen, Fed chairman. Suppose it is true disciple of Bernanke because America with Bernanke was very lucky. The fact that he was at the head of the Fed in such a critical moment, it's fantastic, because he is a man with a great knowledge and a brilliant intuition, ready to unconventional steps, ready to push them to explain. I do not believe that Yellen could inherit all of these qualities, but also, for example, it still continues the line of Bernanke. But she was trapped. Whatever could she do? She understands that the new QE is inevitable, but does not know how to sell it to the public. Then I went to her place on the way the rate increase, and the sooner the better, and got to the deteriorating situation in the US economy such that the public itself would require a new QE.
- Why is the public against QE ? That is, inflate the money on, what's the problem? Or fear of inflation?

- Including the fear of inflation. Now this period: all that is done, does not correspond to economic theory. But no one is reviewing the economic theory, all of her stick.

- What, a liberal?

- This is a common monetarism.

- Milton Friedman and everyone else?

- Milton Friedman - is one of the options. He, in fact, a lot of practice. This Irving Fisher - all monetary theory. Actually, since Fisher through Knight, Friedman, who else ...

- Friedrich Hayek?

- No, Hayek - it is just an Austrian. There is a theory, she says quite certain things, it makes definite predictions. None of it did not refuse. She continues to make predictions. She says: QE - that means inflation in the future.

- But for some reason it does not happen.

- It somehow does not occur, but the worse ...

- ... What will happen, right?

- Yes, all say the dam will burst. But when the dam burst ...

- And you, it means that such consequences do not believe me? There is even the term "helicopter Bernanke". Do you also believe that a helicopter can dump dollars and all will be well?

- It is necessary to throw as much as you need. This is a separate issue. In my book actually drawn in the last chapter, an innovative framework for the analysis of cash flows of the global economy. Yes, it does not look as innovative, it can be quite boring text, but it is innovative, there are arguments about how we can manage the whole process.

THE CHINESE ECONOMY WILL COLLAPSE WITHIN 5 YEARS

- What is the situation in China? Many people say that this is the next world hegemony after American ...

- China is trying to accelerate due to lending, a completely insane lending its own economy. He is trying to cause inflation in response to deflation. In this case, really nothing is impossible. Producer price deflation for three years.

- That is, there is no demand, right? Produce, and no one needs?

- Nobody needs and you reduce prices.

- But economic growth persists, 7 percent. Ostensibly? Or paint them?

- You know, there are already serious doubts, including in China, that's all it is. But no, of course, will not now in this business and understand specifically to climb. Well, continues to grow, it is supported. This is done by bad debts and so on and so forth. And this deflationary wave goes around the world, and the crisis - this is a deflationary crisis in the first place. And we see it. China, Europe, with its real deflation ... There's 0.5 percent rise in prices in the year somehow squeezed, and now the fall in oil prices, I do not know exactly the price will go negative.

- Explain why deflation - is that bad?

- This is the worst. That's what most always afraid Keynes ( John Maynard Keynes - economist - approx. ed .) and what is always called upon to fight. Because then just keep the money becomes the most profitable strategy. Produce, invest, do nothing, just store. That is tezavrirovat. And this process is self-sustaining. The higher the deflation, the more people hoarded money, so again above deflation ...

- What is the fundamental cause of deflation?

- Let's turn to the book. The fact that we have the wrong, perverted little mind, grafted traditional economic theory. She says that economic growth - is the norm, and the economic crisis - this is some trouble, not the norm. But I got something else. The economic crisis - is the norm, and in fact is required to make a great effort to understand: why in certain periods we see economic growth?

There is an explanation of why we have seen, for example, during the industrial revolution. But it is clear that by the 70s not XX, and the XIX century deflationary crisis has become permanent, which is only occasionally interrupted by ... That is, we have entered a period of permanent crisis, which sometimes takes time.

What are the elements of this crisis? Two world wars, three depression. Depression 1873 - 1914's, then what is called the Great Depression, followed by a big crisis' 70s, and finally, the current depression, one might say, is the fourth. Two world wars, depression and a bunch of four failures in the development of most of the world - Latin America, Africa, a number of countries in South-East. The next anticipated event - a collapse of the Chinese economy.

- Still, you insist on this?

- Continue to insist ...

- Chinese miracle burst?

- I was afraid that in August this year. It seems that in February will be two years since I made such a prediction, it fell on YouTube. I said that the Chinese economy will collapse within five years, but not in the next two years. But in August, I was very worried that my forecasting abilities will be called into question, because, damn it, the Chinese economy can not survive until February. Because everything went bad. In September they announced quantitative easing in Chinese. The Central Bank has supported the system. A couple of weeks ago they lowered the refinancing rate. Well, in general, until February survive, my forecasting abilities, thank God, will not be affected.

But now, rather, the question is, whether the Chinese economy will survive the 15th year, because imbalances accumulate huge way, bad debts are rising rapidly, began to decline in housing prices. $ 4 trillion invested in this very case. Prices began to fall. The government in recent years has tried to carry out administrative measures in order to prevent the formation of a bubble in the housing market, but these measures nor to no avail. Today, the government says, do what you want, buy, just to support the market. Still, prices are falling. Again, this 4 trillion, of which a significant portion of burn, it's become a bad debt ...

- And all this, too, was tied to a mortgage? Just as in America in 2008?

- All for a mortgage! And building on debts tied, and construction companies all heavily in debt, and local budgets, and so on and so forth. Only one this ball is really worth all the gold reserves of China.

- Which is somewhere 2 - 3 trillion?

- 3 trillion. And this is only one ball. We do not believe metallurgy, state-owned enterprises, mainly steel, with pereizbytochnymi capacity, reserves. It depends on many factors. Therefore, the main problem now: whether China will survive 2015.



"Do you think such a unique CHINA?"

- And if you will not survive? What scenario?

- You know, it is difficult to imagine that the economy of a country's economy will collapse ... of this magnitude with such imbalances, of course, collapses the first time in the world.

- This is similar to how the collapse of the USSR?

- It's not like the Soviet Union, it is very unlikely. The Soviet Union was not so unbalanced. And with external economies ties were small. And then the full integration of a giant internal imbalance, with a huge imbalance in the global economy. That is, it is generally the first such event ... In any case, we should have at least some analogues, and I even analogs is difficult to imagine.

- Well, Andrew ninth - Deputy Director of the Institute of Sino-Russian strategic cooperation, said that the crisis is not terrible for China. Will be rice, and this is important. There's just poor people. A 300 million middle class, says jail-shoot, and everything will be fine with them. That is within the country is not terrible, but apparently scared, you think?

- If all goes there quietly, without incident, then to the outside world it would be, of course, a great gift.

- Markets are released?

- All the same, it is necessary to produce and where to translate something? Already transferred to Vietnam, Thailand, Myanmar, Bangladesh, Indonesia. Look, India is ready, it even acquired a new government at this point, which can take advantage of the best of the situation. They have the same problem all the time there is a change in government and a flirtation with socialism. And right now there is a government that is not flirting with socialism. India is ready to start taking investment if they will go.

Something will go to the United States, yes. When people talk about the reindustrialization of America, this is nonsense. In fact, there are some examples, but statistically they are very minor. There are some companies even have a separate industry, but it is very small compared to the total volume. Nevertheless, still leave something to the United States, something will go to Europe ... There is, at least the periphery countries that are ready. Unemployment - 20 percent youth - 50, the cost of labor is reduced, increasing exports. So if China collapses, they have good logistics relative to the market.

- That is the world of themselves, and not notice the collapse of China's economy?

- Peace, on the contrary, breathe a sigh of relief - if all goes "in Dzevyatouski" if the Chinese will decide all their internal problems. Switch to a bowl of rice, for them it does not matter. In this case, indeed, have to solve the problem of 300 million middle class. It is only necessary to understand that there is a middle class - those who from $ 300 a month is obtained. This is a relatively middle class ... China is now struggling to survive. That's why I say that, at least in 2015, they are likely as many expect will be a weakening of the yuan is strong enough.

- But for Chinese exports it's profitable? US accuses China of constantly undervalued!

- No, wait! Until February of this year, the yuan has grown continuously for 12 years. Therefore, and was shocked when he suddenly collapsed and, by the way, many were ruined, because all are betting that the yuan will continue to grow. A number of forex traders fail because it was impossible to imagine that the yuan will fall. The next year, I think it is quite a trend this is. But China will fight. Look, all the data is very bad, getting worse. What grows? Growing surpluses in China, but it does not grow at the expense of export growth, - well, export is growing, but not the 7 percent rate, and due to the reduction or slowdown of import ...

- They are imported mainly raw materials?

- Import raw materials, imported cars. They import and food, among other things, in large quantities. This country - one of the largest buyers of food. So for food there too may be some progress. China - a mystery in 2015. Hold on, maybe, but right now I would have such a solid rates did until February. In any case, you have to watch carefully.

- And if you still Chinese authorities can not cope with the situation and the crisis bowels out? And in China, millions of troops, weapons of mass ... no accident that China began to foreign expansion, captures deposit capture transport corridors, even some non-economic things start to knock down the crisis.

- You, by the way, you know that he has on every side stepped a long time ago? That all these cries, they winter, early spring ... He left the Paracel Islands, ceased to produce oil. What the Chinese can do? Well, they have an army. What will they do? Vietnam will win? What does this have to the dollar? We will win? This is the dollar which is relevant?

A long time ago, American companies are looking for new bases. Vietnam is developing. Myanmar announced a democratic state, almost. Because they say: "You need cheap labor - please, no question, but you really forget about their democracy." And India with a billion population? Do you think China is such a unique? The world is full of those who are ready to take his place, who stands at the ready and already quietly takes this place. And again, not only in Southeast Asia, but also in southern Europe.

- The question is whether China is willing to accept it?

- What do you mean "I do not accept"? Well, you did not take. Here I do not come to you invest, you say: "I do not accept the fact that I did not come to investments that do not build more factories. I do not accept that! "How does it look?

- Expansion impossible from China, do you think? Domestic sources of growth had not? So they made ​​the iPhone, and make their own Chinese phones so that they take over the world, can not? Lenovo and other IT -companies?

- No, of course. You build some alternatives, but I am an economist, I do not fantasize.


DISCARDING THE DOLLAR AS A FORCED TRANSITION TO SURROGATES

- Several of the BRICS countries together all the time there has been talk about moving calculations on bilateral relations without the participation of the dollar. This is seen as a big threat to the dollar ...

- This is ridiculous seen as a threat to the dollar. I would have considered it as a threat to the BRICS, in a sense.

- That is, the dollar can not refuse?

- You see, the dollar BRICS does not get any.

- And this is what threatens us?

- That's imagine that we are payments in dollars and yuan. What happened to us with the ruble during the year? Imagine a Chinese businessman, that's how they behave in rubles calculations? Ruble - is that from their point of view? What was the ruble at the beginning of the year and now. When you have a ruble falls twice or close to it for a year, then how to settlements in rubles? On the other hand, we have the yuan, which grew, grew, grew, and everyone is used to. Then fell slightly, and now, most likely, will fall too. And from our side to settle accounts in RMB unless we understand what the yuan? And what we hedge risks?

By the way, there was also a funny story about the threat dollar. Amazingly, I just laughed and rolled on the floor laughing. That we so describe that here is another threat to the dollar. But in fact, the British and the Germans created at clearing houses for direct payments in euro and yuan, bypassing the dollar. There sit still businessmen who understand to count every penny. And they, of course, understood that fluctuations in the euro and the yuan must somehow insure and hedge. And they watch schemes hedging risks of direct payments euro-yuan. And they made this scheme ... with dollar instruments! Only with dollar instruments they got to hedge risks such trade!

- Why do we need a dollar, if we are to each other very well sell?

- Good question. For us, it sounds like some kind of political action, we struggle with the global hegemony, we are struggling with the dollar, we are at the forefront. But then the question arises, you try to explain it a normal businessmen who count every penny, how to do calculations in currencies that are unstable to each other, are unstable to all other currencies, and how to hedge risks?

Politically, this struggle with the dollar looks very nice, but ...

- ... The dollar is impossible to get away?

- The dollar itself out. What is happening when reduced QE? He leaves, and, of course, there, on the periphery, serious problems begin: the calculated?

- Normally there is no money, we will do what we have ...

- We will do what we have, that's right. This decision, which declared the offensive, but in fact ...



"For abandoning the gold standard humanity paid the two world wars"

- What is the dollar general? Than he is unique, so why all need? Why, in your view, the dollar is at the heart of all? Despite the QE and the Fed, despite the exorbitant debts of America ...

- Again, I will refer to his book. It shows that due to the coincidence of a number of factors - and it does not merit the United States - there has developed the most advanced in the world at that time, the system of division of labor. The book describes in detail what happened in the 80 years of the XIX century. What are the prerequisites, all fast enough ... And actually developed the foundations were laid, perhaps, to the 20th years of the twentieth century already, when more or less complex structure. What does it mean more developed? This means that manufactured goods are produced, a greater variety of industrial products. We can live in peace in their country, yes, we have a low level of division of labor, we are satisfied, but want something like that ... Remember, in the Soviet Union would like to tape, you want the radio, I want something like that to work properly and do not break. So, we need a variety of goods. And to buy it all, you need dollars.

- Prior to the abolition of the gold standard clear, but now a dollar - unsecured piece of paper?

- The gold standard - is absurd, for refusing to which humanity paid the two world wars. Why enter the gold standard, which was introduced in the 44th year, the peg the dollar to gold and now this whole system? Keynes was against as a theoretician, but he was also an Englishman. He realized that if left as is, it will be only one dollar currency for the whole world, and he had to save a pound. Peg the dollar to gold - it was a way to save a pound.

- That is a special operation in Britain? And speaking of gold, Rothschild mean?

- It does not matter. Yet there was no Rothschilds, and gold already. You imagine in 1944. Do you have a German brand, but you know that it will not be fast. Do you have the Italian lira, but it is about will not happen.

- Finance defeated ...

- ... And the world in general there is no currency, which makes sense to speak. Only a dollar. There is still some pathetic pound issued by heavily in debt to the United States.

- Crumbling empire.

- Completely dying empire. And in 1944, the Bretton Woods ( Bretton Woods - a mountain resort in the state of New Hampshire, in the north-eastern United States, where in July 1944 took Monetary and Financial Conference of the United Nations. It laid the foundations of the Bretton Woods monetary system, in which world currencies were tied to the US dollar, and the dollar was pegged to gold. It was also decided to set up the IMF and the World Bank - approx. Ed .) created the conditions to exist in addition to the dollar other currencies. Only thanks to the Bretton Woods system you exist at all other currencies.

- They could not be, could be only one dollar?

- Of Course. And still today the only world currency - the dollar. Eur? Yes, Europe can not even hold QE really ... There economists already clear that the euro - the currency of a dependent, the euro has the same branch of the dollar, as well as all other currencies. And we say: the ruble - a branch of the Federal Reserve, our central bank - a branch of the Fed, and this must be fought.

- So you agree that we are a branch of the Federal Reserve?

- Of course, I agree! In the same way as all other currencies ...

- That is the rejection of the dollar - a world war?

- This is not World War II, it is the collapse of the world economy. And as there will continue to be, a world war, not World War II, a lot of local wars, every man for himself ...

- Still, it turns out that the dollar's dominance came situationally, thanks to the war, so he took a place ...

- No, the dollar was at that time and at the moment in any case still associated with the economy, with the highest level of division of labor. Yes, we can say that right now in the US, maybe not this level of division of labor. But this system has long moved beyond a single country, and it supports itself.

- Let's take a simple example. Here we are sitting here. You as the smartest, most intelligent. We all have different products, something manufactures, markets. You write on paper receipt that you are the smartest, the best. We agree that your receipts accepted as means of payment. And start to communicate. While you're writing a receipt, everything is fine, but as soon as receipts instead of one you start to write two receipts ... went uncontrolled emissions. That is today the main problem of the dollar is that the people who run this system, allow illegal things from the perspective of the global economy.

- Wait here, I told you about the issue of new ads QE. You tell me right now, here acknowledge my whole story. Say, if printing a lot of dollars, there will be inflation. Well, a lot of printed dollars - there is a world of inflation.

- Just accumulate dollars in reserves of China. Japan, Russia. That is generally accepted framework for manipulation occurs dollar. Now there is no division of labor, there is no demand for US goods. There is a demand for Chinese goods.

- But if you buy the iPad, which is made in China, then, generally speaking, you pay money to America, not China. China gets a penny from this iPad, and so you can say, oh, I bought the Chinese. Garbage it, you bought an American iPad. And a big part of what makes China, goes to America, and China gets his commission because the Communist Party explained its working people that the low salary - it is for the good of the revolution and communism. That is, American corporations simply rent from China labor no more.

radon1
Intermediate Crude
Intermediate Crude
 
Posts: 2054
Joined: Thu 27 Jun 2013, 06:09:44

Re: Global economic future news and discussion

Unread postby Graeme » Wed 14 Jan 2015, 16:27:11

Global economy’s future hinges on a triple whammy of assumptions

When I consider the prospects for the global economy and markets, I am taken aback by the extent to which the world has collectively placed a huge bet on three fundamental outcomes: a shift towards materially higher and more inclusive global growth, the avoidance of policy mistakes, and the prevention of market accidents. Though all three outcomes are undoubtedly desirable, the unfortunate reality is that they are far from certain – and bets on them without some hedging could prove exceedingly risky for current and future generations.

The first component of the bet – more inclusive global growth – anticipates continued economic recovery in the US, with a 3% growth rate this year bolstered by robust wage growth. It also assumes China’s annual growth rate will stabilise at 6.5 – 7%, thereby enabling the risks posed by pockets of excessive leverage in the shadow-banking system to be gradually defused, even as the economy’s growth engines continue to shift from exports and public capital spending toward domestic consumption and private investment.

Another, more uncertain, assumption underpinning the bet on more inclusive growth is that the eurozone and Japan will be able to escape the mire of low growth and avoid deflation, which, by impelling households and businesses to postpone purchasing decisions, would undermine already weak economic performance. Finally, the bet assumes that oil-exporting countries like Nigeria, Venezuela, and especially Russia will fend off economic implosion, even as global oil prices plummet.


theguardian

Seven charts that explain what's going on in the global economy right now
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Thu 15 Jan 2015, 17:08:54

Geopolitical Conflict Is World's Top Economic Risk, Report Says

Following a year marked by the conflict in Ukraine and the rise of the Islamic State, geopolitical issues are considered to be the biggest threat to global stability over the coming decade, according to experts polled by the World Economic Forum.

In its 2015 Global Risks Report, published Thursday, the WEF found "interstate conflict with regional consequences" to be the top risk facing the world, ahead of extreme weather, the spread of infectious diseases, climate change and sky-high youth unemployment levels in some parts of the world.

"Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states," said Margareta Drzeniek-Hanouz, WEF's lead economist.

She said the means to wage such conflict are broader than ever, whether through cyberattack, competition for resources or sanctions and other economic tools.

"Addressing all these possible triggers and seeking to return the world to a path of partnership, rather than competition, should be a priority for leaders as we enter 2015," she said.

The report, now in its 10th year, helps set the tone for discussions at the annual WEF gathering in the Swiss ski resort of Davos, which starts next week.


huffingtonpost

IMF Chief Says Global Economy Faces ‘Very Strong’ Headwinds

Strong headwinds from weak investment, substantial debt burdens and high unemployment are preventing a pickup in global economic growth despite a strengthening U.S. recovery and tumbling oil prices, International Monetary Fund Managing Director Christine Lagarde said.

A healthier U.S. and cheaper energy “won't suffice to actually accelerate the growth or the potential for growth in the rest of the world,” the head of the emergency lender to nations said in a speech Thursday at the Council on Foreign Relations in Washington.

“If the global economy is weak, on its knees, it’s not going to help,” said Ms. Lagarde in remarks previewing the IMF’s latest forecasts for the global economy due out on Monday.


wsj
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Mon 19 Jan 2015, 16:45:32

Davos 2015: 9 ways to pull our planet back from the brink

Last week, two research papers unambiguously identify the key priorities to reduce global systemic risk and ensure long-term prosperity. The first tracks the “Great Acceleration” in human growth and activity largely since the 1950s. The other, by myself and 17 international colleagues, identifies nine planetary boundaries and calculates that Earth has now transgressed four. Our global civilization is now in a danger zone. It would be prudent to pull back from the brink.

The best science indicates that we can do just that, and political momentum is growing at an astonishing rate. A year ago it was easier to imagine a global catastrophe than it was to imagine the level of cooperation required to seal an ambitious climate deal in 2015. But recent US and China leadership has changed all that. And business leaders, from Unilever’s Paul Polman and IKEA’s Peter Agnefjäll, accept that companies must share a new responsibility for finding solutions for a planet under pressure.

This is the new global context.

Climate change – deep decarbonisation
Respecting the planet’s climate boundary translates to limiting carbon emissions. This remaining carbon budget needs to be shared fairly. Decarbonising the global economy in a matter of decades is the number one priority. This will require a global price on carbon. Sweden’s carbon tax of about $100 per tonne, introduced in 1991, has made polluting expensive, leading to lower emissions while the economy flourished. We need $1,5 trillion in capital investment for renewables and everyone will benefit from energy efficiency measures.

If all this seems like a distant dream, Copenhagen has pledged to become the first carbon neutral capital by 2025. The spin off is happier, healthier citizens. And looking eastward, China’s massive investment in renewables is set to drive a transformation in energy supply.

Stratospheric Ozone depletion – a reason to be cheerful
Biodiversity – planet-smart education
Forest protection – leadership from business
Fertilizers – too much of a good thing
Water – waste not, want not
Ocean acidification – two birds with one stone
Air pollution


weforum
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Tue 20 Jan 2015, 16:13:43

Why 2015 Is a Make-or-Break Year for the Global Economy

As 2015 begins, policymakers around the world are faced with three fundamental choices: to strive for economic growth or accept stagnation; to work to improve stability or risk succumbing to fragility; and to cooperate or go it alone. The stakes could not be higher; 2015 promises to be a make-or-break year for the global community.

For starters, growth and jobs are needed to support prosperity and social cohesion in the wake of the Great Recession that began in 2008. Six years after the eruption of the financial crisis, the recovery remains weak and uneven. Global growth is projected at just 3.3 percent in 2014 and 3.8 percent in 2015. Some important economies are still fighting deflation. More than 200 million people are unemployed. The global economy risks getting stuck in a "new mediocre" -- a prolonged period of slow growth and feeble job creation.

To break free from stagnation, we need renewed policy momentum. If the measures agreed by the leaders assembled at the G-20 in November are implemented, they will lift world GDP by more than 2 percent by 2018 -- the equivalent of adding $2 trillion in global income. Furthermore, by 2025, if the laudable -- yet not overly ambitious -- goal of closing the gender gap by 25 percent is achieved, 100 million women could have jobs that they didn't have before. Global leaders have asked the International Monetary Fund to monitor the implementation of these growth strategies. We will do so, country by country, reform by reform.

Besides structural reforms, building new momentum will require pulling all possible levers that can support global demand. Accommodative monetary policy will remain essential for as long as growth remains anemic -- though we must pay careful attention to potential spillovers. Fiscal policy should be focused on promoting growth and creating jobs, while maintaining medium-term credibility. And labor-market policies should continue to emphasize training, affordable childcare, and workplace flexibility.


huffingtonpost
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Wed 21 Jan 2015, 18:17:25

Davos 2015: climate change makes a comeback

The financial crisis pushed climate down the Davos agenda. This year, there are clear signs that it has made a comeback. Al Gore gave the first big presentation in the main conference hall and, against a backdrop of pictures of flooding, death and destruction, warned that the world was in denial about the risks it was taking.

A bit later, Lord Stern said decisions taken at the intergovernmental conference in Paris in late 2015 will shape the next 20 years.

In some ways, Stern’s message to business was more important than Gore’s tub-thumping. For most of those in the audience listening to the former US vice-president it was probably a case of in one ear and out the other. It is unlikely that many of them will be that interested in the series of Live Aid-style concerts planned for June.

But Stern is important because as a respected economist he talks a language that business understands. The message he delivered is pretty simple: burning fossil fuels may seem like the cheapest-cost option, but it isn’t. For a start, the cost of renewable energy is coming down fast, by a factor of 10 since Stern produced his seminal report on climate change in 2006. That same period has seen oil prices yo-yo between almost $150 (£99) a barrel and below $40 a barrel. Renewable energy prices are heading in only one direction: downwards. Oil and gas prices are volatile, making it hard for businesses to plan.

Stern’s broader point is that tackling climate change will lead to better growth. Not necessarily higher growth (although it might) but better growth, with less stress from sitting in traffic jams and cleaner air means fewer deaths from respiratory diseases.

The commonly held belief is that this is a bad time to be making the case for a different sort of energy policy since falling oil prices make renewables relatively more expensive. Stern doesn’t agree. He says this is a good time to think about carbon taxes and removing energy subsidies, because the higher costs that will result for consumers and businesses will be offset by the falling price of crude.


theguardian
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Thu 22 Jan 2015, 16:35:51

The Global Cities That Power the World Economy Now

It’s often said that cities and metros power both national economies and the world economy. But which ones play the most dynamic roles, and which the least?

The Brookings Institution’s Global MetroMonitor is a great place to start. Developed by researchers at Brookings’ Metropolitan Policy Program with data from Oxford Economics, Moody’s Analytics and the U.S. Census Bureau, the fourth annual edition, released today, provides detailed data on economic activity for 300 metros worldwide. These 300 metros accounted for nearly half (47 percent) of all global economic output in 2014 and nearly 40 percent of global economic growth, while housing just 20 percent of the global population.

(A note: The report lacks numbers on some of the poorest metros in the world, particularly those in sub-Saharan Africa, because of the small size of these cities and the limited data available on them).

The table below from the report shows the gap between the richest and poorest metros in the world based on per capita economic output or GDP for 2014. The gap between the richest—Zurich, Switzerland, which generates $82,410 per person—and the poorest—Kolkata, India, which produces $1,110 per person—is staggering. Of the 20 richest metros, all but two of them are in North America or Europe and average just over $69,300 in economic output per person. The poorest 20, all in developing nations in Asia, the Middle East, Africa and Latin America, average just over $4,100 in GPD per capita. The richest places include Oslo, Geneva, Paris, Munich, Dublin and Luxembourg-Trier in Western Europe; and San Jose and San Francisco in the Bay Area, Hartford and Bridgeport, Connecticut, Boston, D.C., Seattle, New York, Calgary, Portland and Houston in North America.


citylab
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Sat 24 Jan 2015, 16:45:51

Global economy hopes raised after European stimulus

The global economic outlook just got brighter after this week's big stimulus from the European Central Bank, leading policymakers from around the world said Saturday.

In a panel at the World Economic Forum in Davos, they said a perkier Europe, coupled with a prolonged period of low oil prices, could help shore up the global economy following a period of underperformance that has prompted many forecasters to reduce their growth forecasts.

"Lower oil prices and the big decision by ECB could further improve world economic outlook," said Haruhiko Kuroda, governor of the Bank of Japan.

The ECB's planned 1.1 trillion-euro ($1.2 trillion) stimulus has been one of the main talking points at Davos and has helped counter some of the pessimism that has enveloped the global economy in the past few weeks. Stock markets around the world have surged amid hopes the ECB move could help boost the ailing economy of the 19-country eurozone.

However, Benoit Coeure, an executive board member at the ECB, insisted that on its own, it won't be enough. He said governments across the region have to enact a raft of structural reforms to their economies, such as making their labor markets more flexible and encouraging businesses to invest.


nzherald
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Mon 26 Jan 2015, 16:18:48

How China views the state of the global economy

China isn't the only one facing a "new normal", according to the head of China's sovereign wealth fund, who tips a period of weak growth, divergence and instability for the global economy.

"China says its economy has entered a 'new normal'. I think the same can be applied to the world economy," Ding Xuedong, chairman and CEO of China Investment Corporation, the world's fourth-largest sovereign wealth fund, told CNBC on the sidelines of the annual World Economic Forum in Davos, Switzerland.

"Weak growth refers to the weak momentum we have in global economic recovery. Divergence is about the widening differences in economic performance and policies around the world," he said. "[And] instability refers to geopolitical events, such as the conflicts between Russia and Ukraine, as well as terrorists attacks and environmental disasters that happen quite frequently these days."

Economic forecasters have been paring back expectations for global growth in 2015, reflecting multiple headwinds.

Earlier this month, the World Bank lowered its global growth forecast to 3 percent from the 3.4 percent forecast made in June, warning that the world economy is overly dependent on the single engine of the U.S. recovery.


cnbc

Tackling Climate Change -- For Real, This Time

As usual, climate change was front and centre at this year's World Economic Forum in Davos. Sadly, however, the vast majority of the discussion proceeded on two fundamentally flawed assumptions:

1. That the real action was at the inter-governmental level, and that actual outcomes on the ground would be largely determined by the success or failure of the mega-negotiations at the Paris COP 21 in December.

2. That , even if "non-state actors " like institutional investors did have a material role to play, the apotheosis of their contribution would be investing in "clean tech" --- finance and build a few solar and wind farms, and all will be well.

Puhleese, folks: let's get real! The first fallacy essentially ignores the massive potential impact -- for good or for ill -- of redirecting the $150+ trillion in stocks and bonds owned by public and corporate pension funds, insurance companies, endowments and foundations, family offices, and high net worth individuals. The second assumes that, even if there were a substantial role for these investors to play, it could be fulfilled simply through clean tech investing. Hey: I'm as big a fan of clean tech as the next guy, but let's pause a moment and reflect: for even the most climate-savvy, committed institutional investors in the world that I know, clean tech accounts for less than 1 percent of their overall investment portfolio -- what about the other 99 percent of their assets -- equities, bonds, real estate, infrastructure? And remember: these are the leaders we're talking about; don't get me started on the rest! In terms of climate change, those assets are not so much stranded as -- well, inert, and under-utilized.


huffingtonpost
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby dinopello » Tue 10 Feb 2015, 10:49:33

I didn't know where to put this or start a new thread, but am very interested in people's opinions on what the heck is going on here...

Apple and Microsoft with a combined $300 Billion dollars in case are selling bonds to generate more cash $$$

In the last ten days two of the most liquid companies in the history of the earth have raised about $20 billion in debt.

Microsoft (MSFT), with about $90 billion on its balance sheet, sold $10.8 billion yesterday. The 10-year portion of that offering yields 2.7%. That's less than the dividend yield on Microsoft shares.

Apple (AAPL) is pricing Swiss bonds today. Since Swiss franc denominated debt has a negative yield Apple is expected to pay buyers of its corporate bond less than .5 percentage points a year for 10 or 15 year paper. This is astonishingly low.

Two takeaways. First, if you can get personal financing at these low rates the folks at Apple and Microsoft think you should. Of course, they have a total of nearly $300 billion in cash sitting on their balance sheets so that may not apply to you.

The real message from Apple and Microsoft is that artificially low rates have perverted the markets in weird ways that will take generations to unlock. Issuing debt to buy back equity doesn't actually create value. It's just restructuring. It's like moving your wallet from your right pocket to your left. You feel heavier on one side and lighter on the other, but on the whole you weigh the same.

It's not stimulative to make it easier for the rich to stock pile cash, but that's what we're continuing to do six years into the financial crisis. The bankers are getting paid, and you can too, as long as you're willing to take .4% a year denominated in Swiss francs.
User avatar
dinopello
Light Sweet Crude
Light Sweet Crude
 
Posts: 6088
Joined: Fri 13 May 2005, 03:00:00
Location: The Urban Village

Re: Global economic future news and discussion

Unread postby Graeme » Thu 11 Jun 2015, 19:20:05

World Bank: Developing Countries Face 'Tough Challenges,' Global Economy Will Grow 2.8% This Year

The World Bank stated in its latest Global Economic Prospects (GEP) report on Wednesday that 2015 is gearing up to be the fourth consecutive year of disappointing economic growth, particularly for emerging economies.

"Developing countries were an engine of global growth following the financial crisis, but now they face a more difficult economic environment," said World Bank Group President Jim Yong Kim. "We'll do all we can to help low- and middle-income countries become more resilient so that they can manage this transition as securely as possible."

The World Bank cited a series of "touch challenges" for emerging economies, such as the looming prospect of higher borrowing costs and the new era of low prices for oil and other key commodities that countries are dependent on for export.

As a result, emerging economies are now projected to experience 4.4 percent growth this year, with a likely rise to 5.2 percent in 2016, and 5.4 percent in 2017.

China has "avoided the potholes skillfully for now" and is easing to a growth rate of 7.1 percent, the Bank's Chief Economist Kaushik Basu added. Brazil has been "less lucky" due to various corruption scandals and is expected to contract by 1.3 percent. On the other hand, India is leading the World Bank's growth chart of major economies with a 7.5 percent expected growth.


benzinga
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Global economic future news and discussion

Unread postby Graeme » Fri 26 Jun 2015, 17:47:38

With $21 Trillion, China’s Savers Are Set to Change the World

Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.

With China’s leadership aiming to scale back the role of investment in the domestic economy, the nation’s surfeit of savings -- deposits currently stand at $21 trillion -- will increasingly need to be deployed overseas. That’s also becoming easier, as Premier Li Keqiang relaxes capital-flow regulations.
The consequences ultimately could rival the transformation wrought by the Communist nation’s fusion with the global trading system, capped by its 2001 World Trade Organization entry. That stage saw goods made cheaper across the world, boosting the purchasing power of low-income families at the cost of hollowed-out industries.

Some changes are easy to envision: watch out for Mao Zedong’s visage on banknotes as the yuan makes its way into more corners of the globe. China’s giant banks will increasingly dot New York, London and Tokyo skylines, joining U.S., European and Japanese names. Property prices from California to Sydney to Southeast Asia already have seen the influence of Chinese buying.

Other shifts are tougher to gauge. International investors including pension funds, which have had limited entry to China to date, will pour in, clouding how big a net money exporter China will be. Deutsche Bank AG is among those foreseeing mass net outflows, which could go to fund large-scale infrastructure, or stoke asset prices by depressing long-term borrowing costs.


bloomberg
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

PreviousNext

Return to Economics & Finance

Who is online

Users browsing this forum: No registered users and 42 guests