Global Economy

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
svinayak
BRF Oldie
Posts: 14223
Joined: 09 Feb 1999 12:31

Re: Global Economy

Post by svinayak »

Image


http://www.economist.com/node/21538700
Migration and business
Weaving the world together
Mass migration in the internet age is changing the way that people do business
Nov 19th 2011 | DELHI, ENUGU AND JAKARTA | from the print edition


IN THE flat world of maps, sharp lines show where one country ends and another begins. The real world is more fluid. Peoples do not have borders the way that parcels of land do. They seep from place to place; they wander; they migrate.

Consider the difference between China and the Chinese people. One is an enormous country in Asia. The other is a nation that spans the planet. More Chinese people live outside mainland China than French people live in France, with some to be found in almost every country. Then there are some 22m ethnic Indians scattered across every continent (the third Indian base in Antarctica will open next year). Hundreds of smaller diasporas knit together far-flung lands: the Lebanese in west Africa and Latin America, the Japanese in Brazil and Peru, the smiling Mormons who knock on your door wherever you live.

Diasporas have been a part of the world for millennia. Today two changes are making them matter much more. First, they are far bigger than they were. The world has some 215m first-generation migrants, 40% more than in 1990. If migrants were a nation, they would be the world’s fifth-largest, a bit more numerous than Brazilians, a little less so than Indonesians.

Second, thanks to cheap flights and communications, people can now stay in touch with the places they came from. A century ago, a migrant might board a ship, sail to America and never see his friends or family again. Today, he texts his mother while still waiting to clear customs. He can wire her money in minutes. He can follow news from his hometown on his laptop. He can fly home regularly to visit relatives or invest his earnings in a new business.

Such migrants do not merely benefit from all the new channels for communication that technology provides; they allow this technology to come into its own, fulfilling its potential to link the world together in a way that it never could if everyone stayed put behind the lines on maps. No other social networks offer the same global reach—or commercial opportunity.

The immigrant song

This is because the diaspora networks have three lucrative virtues. First, they speed the flow of information across borders: a Chinese businessman in South Africa who sees a demand for plastic vuvuzelas will quickly inform his cousin who runs a factory in China.

Second, they foster trust. That Chinese factory-owner will believe what his cousin tells him, and act on it fast, perhaps sealing a deal worth millions with a single conversation on Skype.

Third, and most important, diasporas create connections that help people with good ideas collaborate with each other, both within and across ethnicities.

In countries where the rule of law is uncertain—which includes most emerging markets—it is hard to do business with strangers. When courts cannot be trusted to enforce contracts, people prefer to deal with those they have confidence in. Personal ties make this easier.

Chike Obidigbo, for example, runs a factory in Enugu, Nigeria, making soap and other household goods. He needs machines to churn palm oil and chemicals into soap, stamp it into bars and package it in plastic. He buys Chinese equipment, he says, because although it is not as good as European stuff, it is much cheaper. But it is difficult for a Nigerian firm to do business in China. Mr Obidigbo does not speak Chinese, and he cannot fly halfway around the world every time he wants to buy a new soap machine. Worse, if something goes wrong neither the Chinese government nor the Nigerian one is likely to be much help.

Yet Mr Obidigbo’s firm, Hardis and Dromedas, manages quite well with the help of middlemen in the African diaspora. When he wants to inspect a machine he has seen on the internet, he asks an agent from his tribe, the Igbo, who lives in China to go and look at it. He has met several such people at trade fairs. “When you hear people speaking Igbo outside Nigeria, you must go and greet them,” he laughs.
devesh
BRF Oldie
Posts: 5129
Joined: 17 Feb 2011 03:27

Re: Global Economy

Post by devesh »

look at how Chinese migration is so heavy in SEAsia. didn't the Indian presence used to be proportionate to Chinese presence in SEAsia until the 1930's? in Malaysia there is still a sizable presence. but Indian flow has been to the West. the Gulf countries, Europe, and US. in future years, we should encourage selective migration of SEAsians to India.
svinayak
BRF Oldie
Posts: 14223
Joined: 09 Feb 1999 12:31

Re: Global Economy

Post by svinayak »

Islamization of the sub continent has created this trend in the last 100 years.
India needs to change it for connections to east asia.
Airavat
BRF Oldie
Posts: 2326
Joined: 29 Jul 2003 11:31
Location: dishum-bishum
Contact:

Re: Global Economy

Post by Airavat »

Iceland outlook raised from negative to stable:

S&P affirmed the ‘BBB-/A-3’ sovereign ratings on Iceland. “Iceland’s economy is recovering from the systemic failure of its three largest banks, and has returned to positive economic growth after two years of severe contraction,” S&P said in the statement.

Iceland’s economy will grow 2.5 percent this year and next, versus 1.6 percent in the euro area this year and 1.1 percent in 2012, the IMF said Sept. 20. Next year, Iceland’s current account surplus will widen to 3.2 percent of the economy and unemployment will be 6 percent, versus 9.9 percent in the euro area, the fund said. The recovery has allowed the central bank to press ahead with capital liberalizations that the government estimates will be completed in 2013. The approach allows foreign investors eager to offload krona holdings to transfer them to foreign or local investors willing to commit long-term to the island, according to the central bank.
abhischekcc
BRF Oldie
Posts: 4277
Joined: 12 Jul 1999 11:31
Location: If I can’t move the gods, I’ll stir up hell
Contact:

Re: Global Economy

Post by abhischekcc »

shaardula wrote:oh one of the things about houses that banks hold is that most them are thrashed. people who's houses are foreclosed gut the house from inside. hum to doobe ge sanam, tum ko bhi ...

anyways saving face thingie is true. and i logged in to ask a question related to that.

immediately north of downtown is area M, full of mexican, middle eastern and african migrants, north of area M, is area T transitional area working class whites and blacks, north of that is area W, chichi whites.

Area M has small shops, used cars, tires, handymen, mac-d,taco ghanta, mexican, middle eastern food marts, etc...
Area W no such thing, only cafes, high end steak houses, whole foods and starbucks and Audi/Benz showroom such.
Area T had mall, new japanese cars, ameerkhan groceries, pharmacy etc.

over the last two years nothing has changed in area W, and area M is thriving. but area T is taking a major hit. house prices are falling and businesses are closing. i discovered today that an entire mall has closed. ads on tv suggest that furniture dealerships are closing too.

malls are non-essential. but i was wondering what happens if the grocery store closes? in real terms, given the choices only the food marts of area M seem robust to such shocks. am i wrong?

Interesting. I remember reading a study by some US government agency while writing a report. It outlined the impact of the economic crisis on the financial assets of Americans, according to income levels. A lot of it was on expected lines - the ones on top lost the least, and the amount of losses went on increasing as one went down the income level until the middle class ran out. After that, losses started to shrink again. Why? Because the poor did not hold much stocks,bonds, insurance to begin with. So, the rich and poor lost the least, while the middle class lost the shirt of its back.

Your anecdote also says something similar (even though the transitional class cannot be said to be middle class) - that the middle is getting squeezed.
g.sarkar
BRF Oldie
Posts: 4382
Joined: 09 Jul 2005 12:22
Location: MERCED, California

Re: Global Economy

Post by g.sarkar »

http://www.spiegel.de/international/eur ... 23,00.html
12/09/2011
'Cameron Is a Coward'
European Politicians Slam British EU Veto
By Veit Medick and Annett Meiritz
"Following David Cameron's veto of EU treaty reform, there is plenty of frustration in Europe over Britain's stubborn attitude in the battle against the debt crisis. Prominent members of the European Parliament have strongly criticized the British prime minister and sent him a clear message: Europe doesn't need you.
.....
Cameron's use of his veto has provided for much discontent within the European Parliament. "It was a mistake to admit the British into the European Union," said Alexander Graf Lambsdorff, a prominent German MEP with the business-friendly Free Democrats, and vice chair of ALDE, the liberal block in the European Parliament. The UK must now renegotiate its relationship with the EU, he said. "Either they do it by themselves, or the EU will be founded anew -- without Great Britain," Lambsdorff said. "Switzerland is also a possible role model for the British," he added, refering to the fiercely independent stance of the Alpine country, which is not an EU member.
Harsh Attacks and Clear Frustration
There has also been sharp criticism of Cameron's attitude from the co-chairman of the Greens group in the European Parliament, Franco-German politician Daniel Cohn-Bendit. "Cameron is a coward," he said. He accused the British prime minister of not wanting to deal with the conflict over the Europe Union within his Conservative Party. Cameron, he said, had "manoeuvred himself into a populist corner" from which he would no longer emerge......"
Gautam
g.sarkar
BRF Oldie
Posts: 4382
Joined: 09 Jul 2005 12:22
Location: MERCED, California

Re: Global Economy

Post by g.sarkar »

Apologize if already posted, but a very interesting article:
http://www.economist.com/node/21541753
The East India Company
The Company that ruled the waves
As state-backed firms once again become forces in global business, we ask what they can learn from the greatest of them all
Dec 17th 2011 | from the print edition
"A POPULAR parlour game among historians is debating when the modern world began. Was it when Johannes Gutenberg invented the printing press, in 1440? Or when Christopher Columbus discovered America, in 1492? Or when Martin Luther published his 95 theses, in 1517? All popular choices. But there is a strong case to be made for a less conventional answer: the modern world began on a freezing New Year’s Eve, in 1600, when Elizabeth I granted a company of 218 merchants a monopoly of trade to the east of the Cape of Good Hope.
The East India Company foreshadowed the modern world in all sorts of striking ways. It was one of the first companies to offer limited liability to its shareholders. It laid the foundations of the British empire. It spawned Company Man. And—particularly relevant at the moment—it was the first state-backed company to make its mark on the world.
Twenty years ago, as the state abandoned the commanding heights of the economy in the name of privatisation and deregulation, it looked as if these public-private hybrids were doomed. Today they are flourishing in the emerging world’s dynamic economies and striding out onto the global stage.
State-controlled companies account for 80% of the market capitalisation of the Chinese stockmarket, more than 60% of Russia’s, and 35% of Brazil’s. They make up 19 of the world’s 100 biggest multinational companies and 28 of the top 100 among emerging markets. World-class state companies can be found in almost every industry. China Mobile serves 600m customers. Saudi Arabia’s SABIC is one of the world’s most profitable chemical companies. Emirates airlines is growing at 20% a year. Thirteen of the world’s biggest oil companies are state-controlled. So is the world’s biggest natural-gas company, Gazprom......"
Gautam
abhischekcc
BRF Oldie
Posts: 4277
Joined: 12 Jul 1999 11:31
Location: If I can’t move the gods, I’ll stir up hell
Contact:

Re: Global Economy

Post by abhischekcc »

Britain is playing the role of a spoiler to damage European integration, which is a threat to the Anglo-American establishment. Europe should certainly throw that country out, they will be better off without the banksters of London amidst them.
Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: Global Economy

Post by Austin »

Obama seeks $1.2 trillion debt ceiling increase
NEW YORK (CNNMoney) -- The year couldn't end without a final word about the nation's debt ceiling.

President Obama plans to ask Congress this week to raise the debt limit by $1.2 trillion, an increase that should get the government through most of next year, a Treasury department official said Tuesday.

Fortunately, though, the increase should come without the fireworks that accompanied this summer's debt battle, as it comes in line with the deal struck back then.

That deal, signed into law in August, authorized a phased increase of the debt ceiling by up to $2.4 trillion, with $400 billion of that kicking in immediately and another $500 billion coming in September.

This final request would increase the debt limit from its current level of roughly $15.2 trillion to $16.4 trillion. The government is expected to come within $100 billion of the current limit by the end of this week, the Treasury official said.
Hari Seldon
BRF Oldie
Posts: 9373
Joined: 27 Jul 2009 12:47
Location: University of Trantor

Re: Global Economy

Post by Hari Seldon »

^^^I saw unkil sam casually springing trillion dollah deficits for the rest of this decade and yet emerge alive and kicking.

Now I see that I'd miscalculated. Unkil Sam'll casually spring $1.5 trillion deficits as far as the eye can see into the mists of the future with nary a thought to bringing to heel what apparently doesn't bite anyway and shall yet emerge alive and kickin'.

If you're still unimpressed, I'd say, wake up and get impressed. Unkil displays all the hallmarks of a true hyperpower. None else could've pulled off something like this and yet live to kick around, strong as ever. Wow.
Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: Global Economy

Post by Austin »

Barry is burning money like any thing , first it was couple of trillion and then few more and then now one more trillion.

When he came to office US debt was like $ 10 trillion and by the end of this year it will be $16 trillion.

Surely Barry knows how to spend money , must be a great feeling to ask just a trillion more from Feds :mrgreen:
Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: Global Economy

Post by Austin »

BRICS’ prospects look bright
According to a recent report by Goldman Sachs, Brazil, Russia, India, and China will soon enter the top five of the leading world economies. The report was released to coincide with the 10th anniversary since the emergence of the BRIC acronym and it did not take into account the economic figures of South Africa.

It is quite symbolic that the report was made by the colleagues of economist Jim O’Neil who introduced the BRIC acronym that stands for Brazil, Russia, India, and China, four of the most rapidly developing countries. In the spring of 2011 South Africa joined the four countries but it is not mentioned in the report. Goldman Sachs’ analysts note that since 2001 BRIC countries have recommended themselves as the leaders of the economic growth contributing between 11% and 25% to global GDP. In terms of GDP growth rate some developing countries are already ahead of the leading economies, economist Maxim Bratersky said in an interview with the “Voice of Russia”.

"As for GDP growth Brazil is far ahead of Great Britain and by 2020 it is to rank four among the developed countries. The first troika (top three) will be the same but China and the US will swap places. Russia will be somewhere near them."

According to the report, the share of BRICS countries in the global growth has also increased to 50% from 25%. But this is where the good news end, Goldman Sachs’ analysts note. The coming years will see a slowdown in the economic growth, while production costs in BRICS countries will continue to grow. The euro-zone crisis will restrict the sales area, which leads to the outflow of investors, the report read. This approach does not reflect the whole picture, financial analyst Roman Andeyev says.

"Indeed, there are forecasts for the economic growth’s slowdown in China but in Brazil everything is fine. Let’s assume that Russia and India have a good potential, favorable start positions, low level of debt and no economic “bubbles”. The industrial growth is likely to slow down which is explained by the common stagnation in the world but speaking about economic growth I still don’t see any adequate competitors to BRICS."

Russia’s entry to the World Trade Organization (WTO) and its participation in other integration projects may raise BRIC’s potential, experts say. However it possible only in case of further diversification of production and deviation from the economy model based on raw materials, Maxim Bratersky says.

"It is hard to imagine that amid the expected decline in prices on raw materials Russia will be able to keep a high rate of growth but in any case the growth rate will be much higher than in Europe. Russia’s entry to the WTO will help it to become part of the technological chain of division of labor. The formation of the Eurasian Union’s single economic space of is even more important. It will be a gigantic economic system with huge potential."

According to Goldman Sachs report the coming years see more intensive investments in the economies of BRIC, (or BRICS which is now already not so relevant), because such investments will be regarded as reliable and promising.
pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: Global Economy

Post by pankajs »

Asia Manufacturing Picture Clouds
SINGAPORE—Manufacturing activity continued to contract in South Korea and Taiwan in December but grew in India, as the euro-zone sovereign debt crisis and the sluggish U.S. recovery hit Asia's export economies harder.

Data Monday showed manufacturing contracting for a fifth straight month in South Korea and a seventh month in a row in Taiwan.

That followed conflicting readings in recent days from China's two purchasing managers' indexes, with one showing continued contraction and one showing the merest of growth
pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: Global Economy

Post by pankajs »

Biggest Economies Face $7.6 Trillion Bond Tab
Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.

Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
The two biggest debtors, Japan and the U.S., have shown little trouble attracting demand.

Japan benefits by having a surplus in its current account, which is the broadest measure of trade and means that the nation doesn’t need to rely on foreign investors to finance its budget deficits. The U.S. benefits from the dollar’s role as the world’s primary reserve currency.
Following is a table of bond and bill redemptions and interest payments in 2012 for the Group of Seven countries, Brazil, China, India and Russia, in dollars, using data calculated by Bloomberg as of Dec. 29:

Code: Select all

Country    2012 Bond, Bill Redemptions ($)      Coupon Payments
Japan             3,000 billion                   117 billion
U.S.              2,783 billion                   212 billion
Italy               428 billion                    72 billion
France              367 billion                    54 billion
Germany             285 billion                    45 billion
Canada              221 billion                    14 billion
Brazil              169 billion                    31 billion
U.K.                165 billion                    67 billion
China               121 billion                    41 billion
India                57 billion                    39 billion
Russia               13 billion                     9 billion
We have to be on our toes.
pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: Global Economy

Post by pankajs »

About saving the Brit mush but worth reading. We need not agree to the solution put forth.

If surpluses cause as many problems as debts, maybe we need to tax creditors
Without surpluses, there are no debts. Keynes suggested a means to restoring equilibrium between nations after the Great Depression. It may be an idea whose time has come.

We owe a debt to China. We also owe Germany. The question is, should we pay them back? And just as importantly, should we continue to buy their stuff at current prices when they just stick the profits in a vast bank account in the sky and hoard the lot.

They get richer and we get poorer. Not because they are somehow fantastically efficient at making things, though there is an element of that, but because they have artificially low exchange rates. The Germans have profited vastly from a lower euro than they would have enjoyed had the Deutschmark remained valid currency. The Chinese keep pumping out goods at a dollar-pegged rate. Should the yuan be floated freely, we would all be paying much more for our flat-screen TVs.

Britain, it has to be said, has taken a different attitude to debt repayment than mainland Europe. We have allowed inflation to rip, something that devalues our currency. We have also allowed our exchange rate to fall in relation to other major currencies.

So anyone who has lent money to Britain has already suffered something like a 30% cut in the repayment value of the debt following a 25% fall in the rate of exchange and 5% rise in inflation.


The euro has followed suit in recent months. In September last year it was worth $1.45. Today it is down to $1.29. But the adjustment only takes the euro back to where it was this time last year when it stood at $1.31. Inflation has remained low, thanks to the stubbornly orthodox European Central Bank and its high interest rate policy (something that also contributed to the high exchange rate in the first half of last year).

For some reason, the ratings agencies refuse to punish countries that devalue through exchange rates and inflation. Downgrades only apply to those countries that fail to honour 100% of debt repayments when they come up for renewal.

Poor old Spain, Italy, Greece, Portugal, Ireland and even France must live with higher exchange rates than is realistic given the poor state of their economies. They must also live with the ECB's tight monetary policy. They are stuck paying back massive debts at full price.

In 1945, the last time Europeans looked at each other with massive debts tied round their necks, the chief creditor country, the United States, refused to support a plan that taxed surpluses and declared them worthless after a set period. Instead, it embarked on a spending spree of its own until by the early 1960s it was also a debtor nation. In the process it underwrote European debt and in a piecemeal, voluntary process, wrote most of it off. Britain, Germany and France all benefited from huge debt write-offs in a series of agreements thrashed out in the 1950s.

Britain's sovereign debts are too high for the government to help out households, banks and companies, which collectively have the biggest debts in relation to GDP in the world. A devalued currency and a bit of inflation is not enough. Like other indebted European nations, we need a huge write-off. The Germans must admit that surpluses cause as many problems as debts. Without surpluses, there are no debts.

Obviously, we need some economic disciplines in place or people would not work and save at all. They would just spend in the expectation that debts would be written off. But floating exchange rates and a tax on surpluses would help adjust the imbalances.

Robert Skidelsky, the eminent economist and historian, has documented how John Maynard Keynes, who wrestled with this problem in the depression of the 1930s, put forward just such a solution.

"Keynes sought to secure creditor adjustment without renouncing debtor discipline. To this end, his scheme aimed to bring a simultaneous pressure on both surplus and deficit countries to 'clear' their accounts.

"Persistent creditor countries would be allowed or required to revalue their currencies, unblock any foreign-owned investments, and be charged rising rates of interest (up to 10 per cent) on credits running above a quarter of their quota. Any credit balances exceeding quotas at the end of a year would be confiscated and transferred to a reserve fund.

"Persistent deficit countries would be allowed or required to depreciate their currencies, to sell the ICB [ie Keynes' proposal for an International Clearing Bank] any free gold, and prohibit capital exports. They would also be charged interest on excessive debits. If all countries were in perfect balance at the year's end, the sum of bancor [Keynes' proposal for a global proxy currency] balances would be exactly zero," he wrote last year.*

China will not write off anyone's debts – it is hooked on being a surplus country. The Germans should know better. And if they refuse to write off other nations' debts, it is they and not the Greeks who should be thrown out of the euro.

* Rebalancing the Global Economy: A Primer for Policymaking, Eds. Stijn Claessens, Simon Evenett and Bernard Hoekman, Centre for Economic Policy Research, 2010
vishvak
BR Mainsite Crew
Posts: 5836
Joined: 12 Aug 2011 21:19

Re: Global Economy

Post by vishvak »

The world famous banksters of Swiss banks at it again, this time actually caught though.

US charges Swiss bankers for hiding $1.2 billion
The bankers, Michael Berlinka, Urs Frei and Roger Keller, were accused of "conspiring with US taxpayers and others" in a massive tax fraud scheme.
...
The three accused bankers live in Switzerland. If convicted in the United States they would face maximum term of five years in prison.
However, there are no pictures of open thuggery, unlike here, where the 'rogue trader' "... worked with a product called an Exchange Traded Fund (ETF), which is an investment fund traded on stock exchanges.

One markets analyst said that the alleged rogue trade may have involved a Swiss franc transaction that came undone after the Swiss National Bank lowered the value of its currency."

About the trades, as pointed out earlier here too, "The products are so complicated, and the management doesn't understand it." from here.

More about "correspondent banking" from link
The Swiss bankers, indicted on Tuesday, work for Wegelin & Co, a boutique private bank based in St. Gallen, Switzerland with no U.S. offices.

The three were charged with conspiracy and fraud for enabling dozens of wealthy Americans to evade taxes on $1.2 billion in hidden assets over 2006 through 2010, in part by shifting some of the money through the Connecticut branch of UBS AG, the Swiss banking giant.
...
Investigators, this person said, were interviewing taxpayers over whether the correspondent banks, including UBS, "directed" former clients of their own banks to the smaller banks for which they still provide correspondent services.
...
Correspondent banking, a staple of the global financial system, allows smaller banks around the world without an overseas presence to send money to clients in other countries via larger banks in those countries.
The smart banksters say link
The bankers told worried US tax cheats that they were “less vulnerable to United States law enforcement pressure” because, unlike rival UBS, Wegelin had no offices outside Switzerland.

In describing the scheme to Wegelin personnel, one top executive, who was not named in the indictment but labeled a co-conspirator, assured Wegelin staffers that the bank “was not exposed to the risk of prosecution that UBS faced because [it] was smaller than UBS.”

The unnamed executive also told staffers that Wegelin could charge high fees to clients fleeing UBS and other banks targeted by the US crackdown specifically because they were so “afraid of prosecution.”
...
They did this by opening the accounts in the names of sham corporations and foundations so the clients could avoid detection from the IRS.
The banking practices in the first world countries are weird.

Banks in India follow better standards.
Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: Global Economy

Post by Austin »

Russian 2011 GDP growth world’s third highest - Putin
Russia’s gross domestic product grew by 4.2 percent in 2011, the world’s third highest growth rate among leading economies, Prime Minister Vladimir Putin said on Thursday.

With the country’s GDP growth fueled by high world oil prices, Russia was only behind China with 9.5 percent growth and India with 7.8 percent, the premier said.

GDP growth was just 1.5 percent in the eurozone and 1.6 percent in the United States, the premier said.

As for industrial production growth, Russia was placed fourth with 4.7 percent after China, India and Germany. In the eurozone, industrial output growth was considerably slower and equaled 3.2 percent, Putin said.

Russia’s government debt was only 10.4 percent of GDP at the end of 2011, with the sovereign debt standing at only 2.5% of the economy’s size, the premier said.

Russia’s federal budget surplus amounted to 0.8 percent of GDP in 2011 compared with the 4.3 percent budget deficit in Germany and 6.2 percent in the eurozone, the premier said.

“There are even more alarming facts: the budget deficit is 10.8 percent (of GDP) in Greece, 9.3 percent in Spain, 7.1 percent in France, 11.2 percent in Great Britain, 9.6 percent in the U.S. and 10.3 percent in Japan,” Putin said.

The premier said, however, that Russia needed to continue reducing its dependence on oil and gas revenues and switch to an innovative model of economic development and create no less than 25 million jobs in the country.

Russia’s international reserves topped $500 billion in 2011, the premier said.

“Russia has restored its gold and foreign currency reserves, which currently stand at over $500 billion. By this indicator, we hold the third place in the world,” Putin said.
Theo_Fidel

Re: Global Economy

Post by Theo_Fidel »

vishvak wrote:Banks in India follow better standards.
Because they don't take home Billion $ bonuses.
vishvak
BR Mainsite Crew
Posts: 5836
Joined: 12 Aug 2011 21:19

Re: Global Economy

Post by vishvak »

Theo_Fidel wrote:
vishvak wrote:Banks in India follow better standards.
Because they don't take home Billion $ bonuses.
Please elaborate the connection I am missing here. Are Swiss banks justified in opening benami accounts and fronts because of billion dollar bonuses or is it that this billion $$ is an attraction in being first world countries and therefore somehow justifies this. Or that if India has to progress then Swiss thuggery of ad hoc banking is the acceptable banking practice, ignoring banking standards just like first world Swiss people.

Or are there any such standards of secret banking practices in India?
g.sarkar
BRF Oldie
Posts: 4382
Joined: 09 Jul 2005 12:22
Location: MERCED, California

Re: Global Economy

Post by g.sarkar »

http://www.latimes.com/business/la-fi-g ... full.story
Germany has the economic strengths America once boasted
Germany with its manufacturing base and export prowess is the U.S. of yesteryear, an economic power unlike any of its European neighbors. It has thrived on principles America seems to have lost.
By Don Lee, Los Angeles Times
January 21, 2012, 7:33 p.m.
"Reporting from Elz, Germany—
Every summer, Volkmar and Vera Kruger spend three weeks vacationing in the south of France or at a cool getaway in Denmark. For the other three weeks of their annual vacation, they garden or travel a few hours away to root for their favorite team in Germany's biggest soccer stadium.
The couple, in their early 50s, aren't retired or well off. They live in a small Tudor-style house in this middle-class town about 30 miles northwest of Frankfurt. He's a foreman at a glass factory; she works part time for a company that tracks inventories for retailers. Their combined income is a modest $40,000.
Yet the Krugers have a higher standard of living than many Americans who have twice that income.
Their secret: little debt, frugal habits and a government that is intensely focused on high production, low inflation and extensive social services.
That has given them job security and good medical care as well as well-maintained roads, trains and bike paths. Both of their adult children are out on their own, thanks in part to Germany's job-training system and heavy subsidies for university education.
For instance, Volkmar's out-of-pocket costs for stomach surgery and 10 days in a hospital totaled just $13 a day. College tuition for their son runs about $260 a semester.
Germany, with its manufacturing base and export prowess, is the America of yesteryear, an economic power unlike any of its European neighbors. As the world's fourth-largest economy, it has thrived on principles that the United States seems to have gradually lost.
It has tightly managed its budget and adopted reforms — such as raising the retirement age — that some other Eurozone nations are just now being forced to undertake. And few countries can match Germany's capabilities for producing and exporting machinery and other equipment, or its infrastructure for research, apprenticeships and financing that support manufacturing.
"German industry is strong," said Volkmar, speaking in halting English as he occasionally looks up translations on a laptop. "People work good. That's why the German economy is best in Europe."
Indeed, Germany was the only major Eurozone nation to escape the credit downgrades that have hit its neighbors. And the country continues to anchor the continent's economy.
Still, Germany has its share of challenges.
Income inequality, while less pronounced than in the U.S., is rising. Most workers, including the Krugers, have seen little or no real wage gains in recent years. And the nation's population is declining.
And now, with Europe on the ropes, Germany faces both a declining market for its exports and the prospect of having to cough up tens of billions of dollars more to help bail out profligate Eurozone neighbors......."
Gautam
Satya_anveshi
BRF Oldie
Posts: 3532
Joined: 08 Jan 2007 02:37

Re: Global Economy

Post by Satya_anveshi »

An interesting idea on higher education funding in America. (only tangentially related to global economy and mainly due to the size of this segment)

Education: Selling a piece of your future
A UNIVERSITY education costs a fortune. Student loan debt in America has been rising rapidly in an effort to keep up with the expense. According to the 2007 Survey of Consumer Finance 8.9% of households had student debt in 1989, averaging $8,700. In 2007, by contrast, the share had risen to 16%, holding an average of $21,500 in debt. To make matters worse new graduates face a slack job market which could depress their earnings for decades. But what choice do they have? The cost of forgoing university may be even larger.

Students in California have a proposal. Rather than charging tuition, they'd like public universities in California to take 5% of their salary for the first twenty years following graduation (for incomes between $30,000 and $200,000). Essentially, rather than taking on debt students would like to sell equity in their future earnings. This means students who make more money after graduation will subsidise lower-earning peers.

It is not clear if this will provide adequate revenue for the university. It also means the university bears more risk, because the tuition it will ultimately receive is uncertain. But the proposal will benefit some students and the principle is not so ridiculous. American universities already practice price discrimination based on parental income. The more money your parents have the larger your tuition bill; richer families already subsidise poorer ones. Why not price discriminate based on future income of the student rather than the current income of the parent?

It also means, in many cases, that degrees that command a higher value in the labour market, like engineering or computer science, will cost more than other degrees, like theatre arts. But if an engineering degree is worth more shouldn’t it cost more? If you think of a degree as an asset which pays dividends in future wages, the asset with a bigger expected pay-out should cost more. Faculty in high-value fields tend to get paid more. Perhaps some of that cost should be passed along to the students.

Incentives would also change; maybe university departments would become more invested in producing sucessful graduates. But might this undermine the mission of American universities, which is (or is often assumed to be) to provide a well-rounded liberal arts education? If universities become more income focused, will low-yielding, but socially valuable fields like philosophy wind up short of resources? To some degree, the university-for-all model already undermines our idyllic version of university. As more of the population goes to university, and must pay for it, more esoteric subjects naturally become less popular.

A trickier concern may be what happens if this approach is not implemented everywhere? If you know you will study engineering and earn a high salary wouldn’t you then opt for a school with a fixed, up-front cost—assuming that means you’ll come out ahead? Then would all the talented engineers go to other universities and potentially undermine California schools?

Still, it's an interesting proposal to address the rising cost of higher education.
a comment on this article from ZH site :) :
cant wait to see the banksters trading kids on the NYSE. oh and the derivatives will be interesting. want to buy a call option on a valedictorian? or a put on freshman skipping out on class to do drugs?

or pool these bitches up. maybe they can sell shares and tranches on the Harvard class of 2012?

Now the banksters will literally own kids. any parent out there that allows there kid to sell "equity" is ****** crazy. this is a BIG sign of a breakdown in society
gunjur
BRFite
Posts: 602
Joined: 11 Aug 2016 06:14

Re: Global Economy

Post by gunjur »

The Most Popular Cities of the Ultra-Rich
The report surveyed individuals worth more than $25 million in investable assets to find which cities impress them the most. The survey focused on several factors that can make cities important, including economic activity, political power, knowledge and influence and quality of life.
The list:
10. Berlin
09. Beijing
08. Shangahi
07. Geneva
06. Miami
05. Sinagapore
04. Paris
03. Hong kong
02. New york
01. London

Not sure how miami pipped cities like SFO, LA. Also surprising 2 chinese cities there on list but not japanese city (may be due to political pwer aspect).
Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: Global Economy

Post by Austin »

svinayak
BRF Oldie
Posts: 14223
Joined: 09 Feb 1999 12:31

Re: Global Economy

Post by svinayak »

Brazil became one of the initiators of founding a South-South development bank which would accumulate the resources of the BRICS countries and channel them to various projects. A bank of this kind would protect the BRICS group against the monetary policies of the developed countries and would secure extra economic benefits for the developing countries. Maxim Golovin of the Institute of Economy of the Russian Academy of Sciences gives this opinion:

"The bank’s founding countries will thereby enhance their economic partnership and increase their weight in the global financial system, for example, by granting financial resources to less developed countries. Naturally, the developed countries might express concerns. However, the role of the developing countries is too significant not to be reckoned with. This means that we’re bound to see a new balance of strength."

Lot of new things. But there is some problems
Vipul
BRF Oldie
Posts: 3727
Joined: 15 Jan 2005 03:30

Re: Global Economy

Post by Vipul »

SwamyG
BRF Oldie
Posts: 16267
Joined: 11 Apr 2007 09:22

Re: Global Economy

Post by SwamyG »

Full article in this linky: http://www.oecd.org/economy/economicout ... to2060.htm
Composition of world GDP
Image
RamaY
BRF Oldie
Posts: 17249
Joined: 10 Aug 2006 21:11
Location: http://bharata-bhuti.blogspot.com/

Re: Global Economy

Post by RamaY »

I did some back of napkin math on this http://www.dni.gov/files/documents/Inte ... 20Menu.pdf
Diffusion of Power
Asia is set to surpass North America and Europe in global economic power, but there will not be any hegemonic power. The power of other non-Western or middle-tier states will rise.

This middle tier as a group will surpass Europe, Japan, and Russia. China’s economy will be 140-percent larger than Japan; India’s will be 16 times larger than Pakistan’s.Technology will be a great leveler, shifting the balance of power towards multifaceted networks.
This translates into
China in 2012 $5739b becomes 140% larger Japan in 2012 5458 growing @ 1.5% for 20 yrs = 7351.134626 Resulting in GDP of $10291b Translating to 3% growth

India in 2012 $1722b becomes 16 times Pakistan in 2012 174 growing @ 3.5% for 20 yrs = 346.2232622 Resulting in GDP of $5539b Translating to 6% growth


I wondered why this convoluted projection and then it occurred to me. Pakis and Chini are taller than and sweater than friends and they always compare themselves with their respective aryan brothers :mrgreen:
ramana
Forum Moderator
Posts: 59773
Joined: 01 Jan 1970 05:30

Re: Global Economy

Post by ramana »

X-posted....

US Director Of National Intelligence(DNI) report Global Trends 2030

Summary:

http://www.dni.gov/files/documents/Inte ... 20Menu.pdf

Main report:

http://www.dni.gov/files/documents/Glob ... s_2030.pdf

At a minimum read the summary and mull it over.


With or with out INC, India is on the rise.

BTW, Suraj did awesome job of gathering and critiquing the many Golbal Trends reports from US and the Goldman Sachs BRICs report for Bay Area BRF members early in the last decade.
Hope he does the same with this report.
Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: Global Economy

Post by Austin »

Klaus
BRF Oldie
Posts: 2168
Joined: 13 Dec 2009 12:28
Location: Cicero Avenue

Re: Global Economy

Post by Klaus »

Wegelin & Co. pleads guilty in US case involving Americans who hid funds in secret accounts.
Wegelin, which was founded in 1741 and based in St Gallen, eastern Switzerland, unveiled late on Thursday an agreement with US federal prosecutors in New York that includes penalties worth a total of $US57.8 million ($A55.47 million) for helping wealthy individuals avoid at least $US20 million in taxes.

However, Wegelin believed that, as a practical matter, it would not be prosecuted in the United States for this conduct because it had no branches or offices in the United States and because of its understanding that it acted in accordance with, and not in violation of, Swiss law and that such conduct was common in the Swiss banking industry

the case marked the first time that US justice officials have charged a bank, rather than individuals, as part of a crackdown on overseas tax evasion, Dow Jones Newswires said.
krisna
BRF Oldie
Posts: 5868
Joined: 22 Dec 2008 06:36

Re: Global Economy

Post by krisna »

Image
abhishek_sharma
BRF Oldie
Posts: 9664
Joined: 19 Nov 2009 03:27

Re: Global Economy

Post by abhishek_sharma »

The Volcker Way: Lessons From the Last Great Hero of Modern Finance

Image
The global economy was not the only casualty of the 2008 financial collapse. The crisis also soiled the reputations of many in the financial industry and of the regulators, political leaders, and media outlets that were supposed to keep them in check. So William Silber's new biography of Paul Volcker, one of the last remaining heroes of modern finance, could not have come at a better time.

Silber, an economist at New York University, uses his book to walk the reader through some of the important episodes in Volcker's long and storied career, during which he served in five U.S. administrations. These episodes include his stint as undersecretary for monetary affairs at the Treasury Department, from 1969 to 1974, when the United States abandoned the convertibility of the dollar into gold; his successful crusade against inflation as chair of the U.S. Federal Reserve in the 1980s; and his work following the recent financial crisis, when he backed the provision now called "the Volcker rule," which bars commercial banks from engaging in proprietary trading (investments that banks make for their own profits, not on behalf of clients).

By focusing on these moments, Silber's meticulously researched book offers useful insights into recent American economic history and the life of one of its most fascinating figures. Although the details of these episodes may seem distant, Volcker reminds readers just how precarious the circumstances were -- and how policymakers might confront similar crises in the future.

PRESENT AT THE INFLATION

The book's first major episode begins with Volcker in the Kennedy administration's Treasury Department and follows him over several years as he became the central character in a crisis of the international monetary system. The Bretton Woods arrangements, set in place following World War II, had pegged the value of the U.S. dollar to gold and the value of other currencies to the dollar at fixed exchange rates. The system survived with only occasional hiccups for roughly two decades, but as the Vietnam War escalated, the U.S. economy began to overheat and experience inflation. Without faster productivity growth or the ability to devalue its currency, the United States saw its exports grow increasingly uncompetitive, and investors began fleeing the dollar in favor of other currencies or gold.

To prevent a bad situation from becoming worse, the United States needed to either raise interest rates -- and likely start a recession -- or find some other way to keep money in the country. Over the course of a decade, in innumerable emergency meetings around the world, Washington proposed all sorts of plans to save the Bretton Woods system, from directed international government purchases of dollars to cracking down on coin collectors for taking too much gold out of circulation. But without an increase in interest rates, something policymakers did not want to happen, the status quo would have to change.

At first, Volcker defended the gold peg, but by the time he was working in the Nixon administration, he came to see that the country needed to either pursue a deeply painful monetary policy or fundamentally change its currency system. After a long series of negotiations with Europe, in August 1971, the United States ended the dollar's peg to gold and ushered in more flexible exchange rates. Thanks to close coordination among all the countries involved, fears that abandoning the fixed exchange rates would either unseat the dollar as a reserve currency or spark a full-blown financial crisis never materialized. The fact that Volcker led an orderly transition without a meltdown occurring was a signal achievement. Today, as many countries in the eurozone struggle to cope with the problems caused by their fixed-exchange-rate system, one hopes that they have studied this moment closely.

Silber then looks at Volcker's much-celebrated fight against inflation. In the 1970s, inflation was the bane of the U.S. economy, rising from a five percent annual rate in 1976 to almost 12 percent by August 1979, the month Volcker became chair of the Federal Reserve. The Fed's unwillingness to raise interest rates to stop inflation had destroyed its credibility and allowed what monetary economists call inflationary expectations to take hold. Businesses, unions, and employees throughout the economy began their discussions about wages and prices with the presumption that inflation would be five to seven percent per year. Such a presumption is quite dangerous, since workers then demand seven or eight percent wage increases to overcome the inflation, which in turn causes prices in those industries to rise further. This so-called wage-price spiral can drive inflation up dramatically in a short period.

The country needed someone credible to fight inflation, and Volcker was the man for the job. He attacked right away, although he knew it would mean unprecedented tightening. He designed a new approach for Fed policy that explicitly tried to slow down the growth of the money supply rather than raising interest rates directly (the central bank's normal method), knowing that the Fed governors would have a hard time raising rates as high as they needed to go. His system of targeting the money supply was indirect, and it drove rates higher than anything the Fed had ever before contemplated, to unprecedented levels of 20 percent and higher. The economy slipped into recession, with unemployment peaking at 10.8 percent in November 1982.

Volcker stuck to his guns even as he came under withering criticism from Congress and industry. He acknowledged the difficulties presented by high interest rates but insisted that the country needed to rid itself of inflation or, as he said in a 1982 speech to the National Association of Home Builders, "the pain we have suffered would have been for naught -- and we would only be putting off until some later time an even more painful day of reckoning."

Volcker stayed the course until he beat inflation. Once the battle was won, he began cutting interest rates and making it easier to borrow in order to return things to normal. Unemployment fell rapidly, and conservative economists -- including Milton Friedman, a regular critic of Volcker's throughout the 1970s and 1980s -- warned of the imminent return of inflation. But Volcker explained that the Fed's worst failures had come from waiting too long to tighten monetary policy during expansions, not from loosening it too much during recessions. History would soon prove him right: although a record-breaking expansion followed, inflation never returned.

The last big episode Silber describes came during the recent debate over financial regulation, when Volcker championed a ban on proprietary investing on the part of banks. His logic was that since commercial banks in the United States are backed by the Federal Deposit Insurance Corporation and can borrow money from the Fed during a crisis (at the so-called discount window), taxpayers are ultimately on the hook for the costs of their failure. This government insurance allows financial firms to raise cheap capital, and Volcker argued that it was not appropriate for them to use that subsidy to make risky investments for their own sake, especially ones that might cause them to be even more prone to failure. Volcker also worried that proprietary investing would put banks in direct conflict with their clients.

Volcker's critics insisted that such special rules for commercial banks were untenable because these banks would have to compete with more lightly regulated entities, such as hedge funds, international banks, or money-market funds, which would not have such restrictions. But each time the rule looked to be in jeopardy, developments such as the accusation that Goldman Sachs was knowingly shorting investments that it was selling to its clients or the revelation that JPMorgan Chase had lost billions of dollars on a single proprietary investment would seem to validate Volcker's logic. Despite furious lobbying to remove it, the Volcker rule became part of the Dodd-Frank financial reform bill and is now the law of the land, although the battle over its implementation continues.

INCREDIBLY CREDIBLE

Volcker's narrative reveals the drama behind some of the most important economic policy debates of the last half century. What is even more important to understand than the details of these episodes, however, is the worldview Volcker held as a consummate problem solver. Future policymakers would do well to study his approach, from how he projected confidence and credibility to his insistence on articulating clear frameworks for resolving crises.

Throughout his public career, Volcker personified toughness. He understood that the government had to establish credibility in order to give policymakers flexibility when they needed it. In both the gold crisis and the inflation crisis, the failure of authorities to make credible promises invited speculative attacks by investors, who bet that the government would back down. When policymakers undermine their own credibility, it only makes the next round of a crisis worse, because the market ceases to believe what officials say about how they will resolve it.

In the 1980s, Volcker was able to put an end to expectations of spiraling inflation only by showing that he was willing to administer even the most painful of medicines. Once people understood that he would keep at it until prices stopped ballooning, he earned the flexibility to bring down interest rates to more normal levels, which he did after 1983, without generating a return of inflation.

In the aftermath of the 2008 financial crisis, Volcker frequently seemed frustrated in his public appearances when the government would abruptly reverse its position, as when it announced that the Troubled Asset Relief Program would buy up toxic assets only to say later that the money allocated to the program would instead be used to recapitalize banks. The great fear was that such reversals would undermine policymakers' credibility and make the rescue much more difficult -- a lesson proved quite relevant by Europe's chaotic response to its sovereign debt crises.

Similarly central to Volcker's approach to public policy was his insistence on finding explicit frameworks to resolve crises. That stance might sound obvious, but anyone who has spent time in Washington can tell you how common it is for the government simply to wing it instead. Volcker learned the danger of this approach during the various emergencies he dealt with, including the Latin American debt crisis of the 1980s and the failure of the Continental Illinois National Bank in 1984. In these cases, the relevant players managed to get together and hammer out ad hoc agreements. But fixing problems this way planted the seeds of future trouble, leaving people in doubt about what the government might do the next time things went wrong.

That's why, when the 2008 financial crisis unfolded, Volcker became one of the first to propose creating an institution that could buy up assets and dispense with them, as the Resolution Trust Corporation had done following the savings-and-loan crisis in the 1980s and 1990s. It's also why he worried aloud about the dangers of waiting to confront problems until they arose; he felt that Washington could not evaluate which failing firms were worth rescuing without a clear framework. As the scope of government bailouts spread from financial institutions to AIG, Fannie Mae, Freddie Mac, and even the automobile industry, Volcker's worries seemed vindicated.

Ironically, this preference for frameworks over emergency meetings brought Volcker's thinking into line with Friedman's. In 1969, when Friedman was urging the adoption of a flexible-exchange-rate system, he argued that one of its benefits would be to "put an end to the occasional crisis, producing frantic scurrying of high government officials from capital to capital," thinking they are vitally important. If recent history has taught us anything, it's that the most serious economic crises cannot be tamed solely by improvised disaster control on the part of well-intentioned officials. It takes articulated frameworks.

Volcker's approach to regulation and oversight is also worth emulating. Volcker once told me that he had spent much of his career pushing back against the notion that the free market could govern itself if the government just got out of the way. Capital markets, he emphasized, can function only when people trust the system. A financial system ridden with conflicts of interest, creative accounting, and excessive exuberance is dangerous precisely because it can destroy the public's trust and cause people to pull out their money.

The Federal Reserve has two different jobs: to set monetary policy and to safeguard and regulate major parts of the financial system. Paradoxically, the Fed chairs who have been toughest on inflation have tended to be the most lenient when it comes to bank supervision and the most sympathetic to the idea that the private sector can govern itself. What made Volcker so different as a Fed chair was his toughness on both inflation and regulatory oversight.

It's not that Volcker views bankers as the bad guys, as many populists who embrace his views do. He simply believes that bankers are just like everyone else: that absent oversight, they will try to take advantage of the system. Volcker has repeatedly stated his view that many practices that are considered financial innovations are actually just ways for firms to get around regulations, reduce the amount of capital they are required to hold, or avoid taxes, thus providing little benefit to consumers or the economy.

Volcker argues that regulators must be clear and direct in their oversight of banks' behavior. As he put it in an interview with Silber, "Commercial bankers understand when a bank examiner gives them a green light to lend. They also respond to a red light, whether they like it or not, but most ignore the cautionary yellow." For this very reason, in the recent debate over financial reform, Volcker pushed for the ban on proprietary trading to be made explicit and not be left to the discretion of regulators; the banks would never pay attention unless such a practice was expressly forbidden.

DUTY, HONOR, COUNTRY

When I talk to Volcker today, he speaks of a time when honor was the most important thing a person had. He notes that in the early years when he worked in government, many large trade associations didn't even have offices in Washington, D.C., and no banker worried more about his bonus than his reputation.

At every stage of his career, Volcker had the option to leave government and take a lucrative job in the private sector. But he chose public service. It's astounding that Washington manages to recruit professionals of Volcker's caliber while paying them modestly and putting them through all the tribulations of government work, from partisan Senate confirmation hearings to extensive rules and disclosures that they must abide by in their personal lives. Volcker still believes that public service is the most important thing someone can do, but he fears that this attitude may be a relic of a bygone era.

If we are lucky, his fears will be proved wrong. The lessons from Volcker's career and his worldview must continue to inform U.S. economic policy in the years to come if the United States is to maintain its global economic leadership. The country may never produce another figure of such towering stature, wisdom, and determination. But those who come after Volcker would be wise to heed his advice and try to follow in his admittedly giant footsteps.
Christopher Sidor
BRFite
Posts: 1435
Joined: 13 Jul 2010 11:02

Re: Global Economy

Post by Christopher Sidor »

^^^
Replace Japan with PRC and one has the dish that is being served today.
Klaus
BRF Oldie
Posts: 2168
Joined: 13 Dec 2009 12:28
Location: Cicero Avenue

Re: Global Economy

Post by Klaus »

Indonesia may hold the key to a $1 trillion injection into the global economy.
Swiss Economic Minister Johann Schneider-Ammann said the group agreed they could reach a tentative agreement on some of the key elements of a global trade deal this summer, in preparation for the ministerial talks in December at Bali.

The good news is we've spent a lot of work on a smaller, more realistic package centred around trade facilitation, which can be a huge benefit to developing economies. And it feels like that is starting to bear fruit
Davos forum ends on cautious note.
European central banker Mario Draghi meanwhile hailed 2012 as the year that the troubled single currency was "relaunched", even as others were hailing him as the man who had saved the eurozone from catastrophe.

The Chinese economy's slowdown seemed less serious than a year ago to the participants while the step back from the fiscal cliff in the United States also eased minds.
As in previous years, the Davos forum was partly hijacked by external events, particularly after British Prime Minister David Cameron vowed to hold a referendum on European Union membership by the end of 2017.

The move threatened to cause a stir, with Cameron's European counterparts worried about the effect the uncertainty would have on the euro's already fragile recovery, but they left any rows for another day.

The turmoil in the Arab world also took centrestage for a time as officials including Jordan's King Abdullah II urged "desperately needed" action over Syria's civil war, though none came.

Amid the cocktail parties and lavish luncheons at Davos, there was sometimes a "mood of complacency", said Axel Weber, the chairman of Swiss bank UBS and former head of Germany's Bundesbank.
RoyG
BRF Oldie
Posts: 5620
Joined: 10 Aug 2009 05:10

Re: Global Economy

Post by RoyG »

All this injection of money into the system is not going to stop the coming currency crisis and depression that will follow.

If it were this easy the problem would've been solved a long time ago.

Almost all the participants felt we were in a recovery after QE was initiated by the FED.

Now they can't hide their stupidity in the face of those who believe in sound currency and higher savings.
shyam
BRFite
Posts: 1453
Joined: 29 Jul 2003 11:31

Re: Global Economy

Post by shyam »

Actually, they are creating situation for a massive crash that we have not seen before. Due to QE, all countries are loading up huge debt, and people are not feeling the pinch because interest rates are record low. Parallel event happened before 2008 when people who could not pay were loaded up with huge mortgage debt using teaser rates, and we all know what happened later. Once the 300 year high bond market crashes, these countries will not be able to pay even the interest on the debt. If there were no low interest rates, people would not have taken mortgage that they could not pay, and if the interest rates were high people would not allow government to take huge debts. The feeling of prosperity based on low interest rate is the hopium that is being fed to the public.
Last edited by shyam on 28 Jan 2013 09:47, edited 1 time in total.
RoyG
BRF Oldie
Posts: 5620
Joined: 10 Aug 2009 05:10

Re: Global Economy

Post by RoyG »

shyam wrote:Actually, they are creating situation for a massive crash that we have not seen before. Due to QE, all countries are loading up huge debt, and people are not feeling the pinch because interest rates are record low. Parallel event happened before 2008 when people who could not pay were loaded up with huge mortgage debt using teaser rates, and we all know what happened later. Once the 300 year high bond market crashes, these countries will not be able to pay even the interest on the debt. If there were no low interest rates, people would not have taken mortgage that they could not pay, and if the interest rates were high people would not allow government to take huge debts. It is the feeling of prosperity based on low interest rate is the hopium being fed to the public.
Why is this logic so hard to understand for some?
Satya_anveshi
BRF Oldie
Posts: 3532
Joined: 08 Jan 2007 02:37

Re: Global Economy

Post by Satya_anveshi »

All is well with US and global economy!!

U.S. Economy Unexpectedly Contracted in Fourth Quarter
The United States economy unexpectedly reversed course in the final quarter of 2012 and contracted at a 0.1 percent rate, the Commerce Department said Wednesday, its worst performance since the aftermath of the financial crisis in 2009.
Post Reply