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Posted
  • Location: Dorset
  • Location: Dorset

    I've just been trawling through the threads to try and find this, but without any luck so I am opening a new one, sorry if this treads on any toes.

    2010 looks like being just as interesting at 2007, 2008 and 2009 IMO.

    Some massive differences in the eastern economies with China now growing too quickly, Japan suffering the highest deflation since it's records began, US set to struggle but posting a 5+% GDP growth for Q4 2009.

    And what about Europe, the PIGS, BRICS, SEAE's etc....

    Not to mentioned global growth rates, global flows etc.

    Anyway I though I would post about Greece.

    Some interesting talk coming out of Davos in that the default of Greece, similar to Abu Dabai is set to occur this year. This seems to be the conclusion coming out of secret(or not so secret meetings).

    This is fully backed up by the Interest spreads that Greece are having to pay compared to other Euro countries, The finance minister of Greece admitted yesterday that it cannot afford to continue paying the interest on it's debt at current rates and either Greece has to convince the markets that it's more stable and it's risk premium will come down or it will require bailing out by the EU.

    This is really big. Not just on the effect of the Euro which will come under a lot of pressure if the Greek bailout takes place, but due to the wider knock on effect.

    If greece can get away with spending lots of money, that really belongs to the other richer states, then why can't Italy or Spain, or Ireland ?, will the EU want to take on another debt country like Iceland ?, Will the new East European members think that they can get away with it ?.

    Worse case scenario is that Germany gets fed up with what it sees as it having to support all the other countries being irresponsible and the EU falls apart, not that this will happen I think, but this is a very stern test for the EU.

    Greece is looking more and more like the Lehman brothers of the banking world, too big to fail, but who is going to rescue, too big to fail and maybe the start of a wave of problems.

    The Currency speculators will also be in on the act as nothing gives them strength more than the taste of a kill and Greece will be a very tasty kill. Other countries would certainty come under pressure including the UK.

    One to watch this week and over the next month me thinks.

    Edited by Iceberg
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    As harve has touched on, re inflation and interest rates, its a hell of complicated set up to understand correctly (nobody does imho), the news always presents it very clean, simplistically and wrong.

    Go Greek strikes Go.... It's not often I support strikes, but in this I do. They are absolutely right that Greece does not need more lending. It can't afford what it owes full stop, they still need t

    Afraid not, old bean; China has been a Communist People's Republic since, when, 1947? Just because it's a Tory government that's doing all the kow-towing makes not a jot of difference...But I bet that

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    Posted
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    This theads's 2 hours old and it's not been highjacked by PP yet.... he must still be in bed!

    Main news article here:http://uk.reuters.com/article/idUKTRE60S47C20100129

    "I can certainly say that in institutional terms the European Union is not preparing anything," said the official.

    "The Eurogroup, in its format of 16 finance ministers, or even the preparatory committee, have not discussed any bailout, rescue or whatever.

    "If there are discussions ongoing, they are in an informal format and are more of a theoretical nature, because everybody is painfully aware of the existence of the Treaty."

    The European Union Treaty expressly forbids the bailing out of a member state by any other EU state or the Union as a whole.

    "So it is more theoretical in nature, where one thinks that if something were to happen, what could we do that would be in some way compatible with the Treaty," the official said.

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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    Good topic to start Iceberg

    I think in some ways we have more problems and imbalances then either 2007, 2008 or 2009 ahead of us this year.

    Some economies are going Japan style with crippling deflation, whilst others are at risk of runaway inflation, some of the asset bubbles of the last 9 months might be about to pop (see FTSE and S&P over the last couple of weeks) and protectionism is rearing its ugly head. On to,p a large number of western countries including the US and UK are just about bankrupt.

    If Greece falls then Portugal, Spain, Italy and Ireland surely follow.

    Interesting that the ECB are already preparing a legal framework for countries to exit the Euro.

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    Posted
  • Location: Dorset
  • Location: Dorset

    IMF on standby to bail out Greece.

    This would have been unthinkable 6-12 months ago, but would prevent the EU from getting directly involved, however it would not reflect well on the EURO zone itself.

    http://www.independent.co.uk/news/business/news/imf-on-standby-to-aid-greece-over-debt-crisis-1883814.html

    "The International Monetary Fund (IMF) "stands ready" to help Greece with its debt crisis, a senior official said yesterday.

    John Lipsky, the first deputy managing director of the IMF, said the fund is in "ongoing contact" with the Greek authorities following a "scoping mission" to assess the possibilities.

    "The IMF stands ready to support Greece in any way we can," Mr Lipsky said. "It is a matter for the Greek authorities to decide, in collaboration with the European Union, but we are here to help if we are wanted."

    I always think that comments like this are a death wish for any country as they lose any confidence the market might have.

    BTW I agree Stu, 2010 is in many ways more interesting as there are more variables to get to grips with, 2009 was easy in some ways as everybody struggled also alot of the painful decisions from 2008 and 2009 have been postponed, maybe they can put them back another year, but I think having lost the fear of total global economic meltdown the market is nolonger in the mood for this.

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    Posted
  • Location: Chevening Kent
  • Location: Chevening Kent

    I am sure we had a world economy thread but I can't find it now?

    I remember writing its China, China and more China who holds the key to what happens in the world economy. Like a monopoly player who has all the money and wants to continue playing they have to continue to find ways of getting that money back to the West and in particular the US. China needs 8% growth per year and does not have a bigger enough internal market to sustain it, so they need the US as much as they need China at least for the present. I see the US emerging from recession based on Chinese handouts and the GBP to slide against it as commodity prices increase on demand, its not going to be pretty for the UK in the global scheme of things in 2010.

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    Posted
  • Location: Back in Edmonton Alberta(via Chelmsford, Exeter & Calgary)
  • Location: Back in Edmonton Alberta(via Chelmsford, Exeter & Calgary)

    i think you are right with regards to China..it is what i have been saying for the last 5 years or so..we are in the midst of a global shift in power..which has been accelerated by the economic circumstances of the last 2 years.

    As you rightly say China needs the economies of the world to come out of recession to fuel its own need for rapid economic growth..also we need to be watching India very closely in all this..as they are not far behind China in their quest for economic growth.

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    Posted
  • Location: Dorset
  • Location: Dorset

    If anybody wants any info for China then this is a fantastic source, that I've used for work, more reliable and upto date than Wiki, similar to the EIU but you don't have to pay for it.

    https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

    Exports - partners:

    US 17.7%, Hong Kong 13.3%, Japan 8.1%, South Korea 5.2%, Germany 4.1% (2008)

    Imports - partners:

    Japan 13.3%, South Korea 9.9%, US 7.2%, Germany 4.9% (2008)

    It's interesting to delve a little deeper into the mega growth that China has had in 2009.

    Exports have actually fallen quite a bit $1.194 trillion (2009 est.) $1.429 trillion (2008 est.)

    Imports have also fallen but not by as much $921.5 billion (2009 est.)$1.131 trillion (2008 est.)

    However the difference between the two is actually quite low now, which should help to reduce a global inbalance.

    But back to growth, the above would have had a negative effect on growth compared to the previous year, so if growth has increased it must be down to other factors, some of which will be investment, but with some major falls in the Chinese stockmarket I would be surprised if Consumption or investment had gone up much. The most obvious reason is that China deployed the biggest government spending stimulas on the globe in 2009. China has alot of money due to many years surpluses but even China can't sustain this, paricularly as it didn't really achieve a great deal other than pushing up inflation.

    So in many ways I don't think China is as dependent on the US as is often quoted, it is obviously dependent though on global growth across all it's markets, however global growth will lead to high raw material prices, which would be bad for China.

    I'll stop now....But China has a number of issues to overcome, more than Indian IMO.

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    Posted
  • Location: Chevening Kent
  • Location: Chevening Kent

    So in many ways I don't think China is as dependent on the US as is often quoted, it is obviously dependent though on global growth across all it's markets, however global growth will lead to high raw material prices, which would be bad for China.

    I'll stop now....But China has a number of issues to overcome, more than Indian IMO.

    I think China have been canny here as they have been buying all the gold they can get their hands on over the past 6 or 7 years which will act as a hedge against commodity prices. It has to be remembered that the Yuan is artificially pegged against the dollar because that suits China at the moment but I cannot see that staying too many more years?

    One reason I steer clear of the Climate change threads nowadays is that I believe with the emergence of China and then India, the need for alternative (mainly nuclear) energy is obvious and AGW has been manipulated to suit western governments needs? That's not saying its not true just that it has and will be continued to be used as a handy vehicle.

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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    http://www.businessi...-crumble-2010-2

    Cities in the USA are bankrupt.

    1. We need to stop borrowing and demand audits on financial institutions who valuing assets above what they are actually worth (the crisis was primarily driven by liars loans)

    2. Reduce spending except on high priority programs

    3. Emergency implementation of monetary reform and an end to the fractional reserve system

    4. Change our energy paradigm

    5. End the wars

    6. Pray

    Good resource: -

    http://www.mikeruppert.blogspot.com/

    The world economy must shrink and focus on de-centralisation and localisation. We cannot expect continuous growth as this short animation shows: -

    Edited by PersianPaladin
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    Posted
  • Location: Dorset
  • Location: Dorset

    More news about the PIGS, A 5% drop in shares in spain and portugal as their money auctions stuggle to attract people to buy the government debt.

    Lets hope the UK doesn't stuggle now that it won't be relying on QE.......He says without much hope.

    Also some very poor US economic data on jobs.

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    Posted
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    Jitter time again Iceberg..... Global financial crisis Round 2?

    It'll be be interesting to see how the markets perform today.

    Worries over euro zone peripheral countries' fiscal health have sent shockwaves through global financial markets. The International Monetary Fund has offered to help Greece, though Athens has said it will not ask the IMF for assistance.

    Reuters- Europe shares hit 2-month low

    Edited by kar999
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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    Jitter time again Iceberg..... Global financial crisis Round 2?

    I think it's still round 1 to be honest, Kar999

    It's just the last 11 months have been made to appear more stable by massive stimulus and zero interest rate policy

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    Posted
  • Location: Back in Edmonton Alberta(via Chelmsford, Exeter & Calgary)
  • Location: Back in Edmonton Alberta(via Chelmsford, Exeter & Calgary)

    Also some very poor US economic data on jobs.

    i could not find any very poor US economic data on jobs?..in fact unemployment fell in the US in December http://news.bbc.co.uk/2/hi/business/8500625.stm
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    Posted
  • Location: Dorset
  • Location: Dorset

    i could not find any very poor US economic data on jobs?..in fact unemployment fell in the US in December http://news.bbc.co.uk/2/hi/business/8500625.stm

    "Yet at the same time, US employers cut 20,000 jobs in January, which was also unexpected. Most analysts had predicted the economy to add jobs."

    The actual official unemployee figure isn't worth much if less jobs are created than people actually fired.

    http://newsvote.bbc.co.uk/1/hi/business/8500625.stm

    The above link is the same one as you quoted I think.

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    Posted
  • Location: Chevening Kent
  • Location: Chevening Kent

    "Yet at the same time, US employers cut 20,000 jobs in January, which was also unexpected. Most analysts had predicted the economy to add jobs."

    The actual official unemployee figure isn't worth much if less jobs are created than people actually fired.

    http://newsvote.bbc.co.uk/1/hi/business/8500625.stm

    The above link is the same one as you quoted I think.

    Watch that GBP against the USD sliding slowly into oblivion now 1.56 was 1.62 on Monday http://nwstatic.co.uk/forum/public/style_emoticons/<#EMO_DIR#>/laugh.gif

    Edited by HighPressure
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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    Europe's Greece Problem: Small Potatoes When Compared to California

    Greece represents 2% of the euro zone economy, compared to California which represent 13% of the U.S. economy. Both are in fiscal trouble. Neither can print their own money to get out of that trouble because they are both part of currency unions. While it is generally not recognized, U.S. states are de facto part of a currency union for the dollar, which was established in the 1800s. Their fiscal problems should be considered as analagous to European countries that are part of the euro zone. California is essentially in default and is only being kept afloat by constant cash infusions from a number of federal stimulus programs. It represents a much bigger drain on the U.S. dollar, than Greece does for the euro.

    http://seekingalpha.com/article/186390-europe-s-greece-problem-small-potatoes-when-compared-to-california

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    Posted
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'
  • Location: Sth Staffs/Shrops 105m/345' & NW Snowdonia 219m/719'

    Europe's Greece Problem: Small Potatoes When Compared to California

    Add Portugal, Spain and Ireland to the list and the Eurozone problem becomes a hell of a lot bigger. Just as well Britain and Icelnad aren't in there as well as we'd more than double the problem.

    Reuters: "The euro on Friday fell to its lowest level against the dollar since May, breaking the $1.3600 level, on rising risk aversion as the cost of insuring the debt of some euro zone nations against default hit record highs on worries over their fiscal positions."

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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    Dark predictions from Marc Faber not so long ago: -

    http://www.bi-me.com...&cg=4&mset=1011

    Add Portugal, Spain and Ireland to the list and the Eurozone problem becomes a hell of a lot bigger. Just as well Britain and Icelnad aren't in there as well as we'd more than double the problem.

    Reuters: "The euro on Friday fell to its lowest level against the dollar since May, breaking the $1.3600 level, on rising risk aversion as the cost of insuring the debt of some euro zone nations against default hit record highs on worries over their fiscal positions."

    Such a shame we are locked into this unholy debt-based union. If there was ever a time to pull the plug on this sorry monetary paradigm....

    Edited by PersianPaladin
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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    Four years on from nef's Growth isn’t Working, this new report goes one step further and tests that thesis in detail in the context of climate change and energy. It argues that indefinite global economic growth is unsustainable. Just as the laws of thermodynamics constrain the maximum efficiency of a heat engine, economic growth is constrained by the finite nature of our planet’s natural resources (biocapacity).

    http://www.neweconomics.org/publications/growth-isnt-possible

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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    Future economic growth cannot happen. Per capita growth would be possible but only with a corresponding population reduction.

    Let's ask Obama who he wants to take out first?

    Edited by Stu_London
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    Posted
  • Location: Back in Edmonton Alberta(via Chelmsford, Exeter & Calgary)
  • Location: Back in Edmonton Alberta(via Chelmsford, Exeter & Calgary)

    Future economic growth cannot happen. Per capita growth would be possible but only with a corresponding population reduction.

    Let's ask Obama who he wants to take out first?

    why cant it happen???
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    Posted
  • Location: Chevening Kent
  • Location: Chevening Kent

    Just popped in to say that the GBP has now slipped 8c against the USD since Jan 19th that's 5% in 3 weeks. This maybe why the BOE decided not to put more QE money in this month as it would only fuel the situation and bring forward what looks to be inevitable UK and EuroZone interest rate rises. All is not well and the storm clouds are looming in Europe and it won't be helped by a US recovery :cc_confused:

    Edited by HighPressure
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