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The other aside is BP and Russia. It seems that the greed of BP has no bounds and it's prepared to do business with the Russian Mafia in order to make a bit of money, This is totally unacceptable IMO and based on this I wouldn't buy BP shares even if I thought they would increase by 100% this year.

Oops, better sell mine then!

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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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Heres something I've been asking myself for awhile.

Why is 7% seen as the default rate now for western European nations....?

What's changed in the last 10 years which has caused countries to have to offer such low rates or even investors to accept such low yields.?

Iceberg, I've travelled around what is now the EU since 1972 whenever it was permitted, and in fact I've lived abroad much longer that I've lived at home. I remember for example buying Polish Zloties on the black market when I visited in 1972 on the Tall Ships' race; the notes were almost as big as a tabloid newspaper sheet. The changes everywhere have been staggering, and I'd say the fall of the Soviet Union made an immense difference in economic activity.

These last few years I have had friends and business dealings in Croatia, and if you take a trip to Zagreb, you'll see a typical example of what's been going on these last 20 years or so in Europe. The area between Zagreb airport and the city itself has quite large areas newly built, shopping centres, hotels, office accommodation, you name it, and yet, the anticipated economic activity has not appeared. These investments are junk, and many of the buildings stand empty. They've even built a spanking new motorway through the mountains between Zagreb and Rijeka, which you have to pay to use, and yet the traffic density is less than I remember the A1 in North Yorkshire when I was a lad back in the 1950s. As my friend Damir Zaia says, "what on earth is all this stuff?"

Croatia isn't the only bubble. I spent a little time in Gdansk in 1999/2000, and its exactly the same story as far as I can see, except there, the Germans are keen to regain what they consider rightfully theirs, the Russians are not the Poles' best friends either, and to the south, Hungary is flexing its muscles wanting to restore Greater Hungary. No wonder the Poles are thoughtful about their present circumstances and the promises of western culture. So would I be.

The fact is that investment bankers (I need not name for example Mr Mandelson's associates aboard the yacht off Corfu) have poured enormous sums in recent times into speculative ventures that can only pay off in the same way that houses are re-possessed, except their investments are often in primary resources that do not devalue the way buildings do eventually. Added to this we now have an increasing awareness of Peak Everything, not least oil and gas, so it ought to be fairly plain that present risks are far greater than in my lifetime I'd say, and therefore the tolerance on default is lower.

Iceberg. The world has changed enormously in my lifetime, yet I'd say the changes are nowhere near complete. Next on the agenda is the economic and political fall of the USA, and - to use an Americanism - boy don't they just know it.

Fasten your seatbelts ladies and gentlemen.

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Next on the agenda is the economic and political fall of the USA, and - to use an Americanism - boy don't they just know it.

Yup - China came out and said it yesterday that their goal is to make the yuan the next reserve currency - reckons it will take about 10 years. 2020 is going to be an interesting year!

Oops, better sell mine then!

Defo a hold in my view - still undervalued both by technical analysis as well as normal balance sheet fundamentals. The disaster in the Gulf of Mexico really punished the share-holders, and will take quite a while to recover.

The other aside is BP and Russia. It seems that the greed of BP has no bounds and it's prepared to do business with the Russian Mafia in order to make a bit of money, This is totally unacceptable IMO and based on this I wouldn't buy BP shares even if I thought they would increase by 100% this year.

Smells very much like an attempt to clean up corrupt Russian oil-oligarchs' money through legitimate means, to me ...

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Defo a hold in my view - still undervalued both by technical analysis as well as normal balance sheet fundamentals. The disaster in the Gulf of Mexico really punished the share-holders, and will take quite a while to recover.

My original reply was 'tongue n cheek' - a defo hold in my book

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Re the Yuan and a reserve currency, this at least 30 years away, with by far the biggest problem being that the Yuan is not a floating currency and that China would have to print approx 5000% more money just to meet the current demands of being a reserved currency alongside $,£, Euro and Yen.

By far the biggest problem with China is that we currently have a struggle between the political leaders and the military leaders in China.

The political leaders recognise that a more economic laize faire environment is needed to enrich the lives of China's 1Bn poor people so that you don't get uprisings.

The military think such a course of action will make things worse and that brutal suppression and intimidation can work.

I hope the political leaders win. This is one of the reasons why the current actions of the US are so important, we need to give China political wins and more nice military losses.

China is still far from being the global economy it pretends to be IMO.

I don't agree with interfering in private companies however it could be termed that anybody now helping BP in this deal is by it's very nature commiting money laundering under the 2002 act. So any Financial companies providing credit to BP are supporting money laundering,possibly....

If anybody wants, feel free to contact the authorities.

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The management of the mafia company.

Without trying to sound like PP, this is a company who's chairman looks after Russia in Putins absence and has been linked to the deaths of thousands of people. Quite how this company could be floated on the LSE is utterly beyond me.

Igor Sechin (Chairman, Deputy Prime Minister)

Sergey Bogdanchikov (President of Rosneft)

Hans Jorg Rudloff (Chairman, Audit Committee, CEO of Barclays Capital bank)

Andrey Kostin (Chairman, Committee for Staff & Fees Allocation, CEO of Vneshtorgbank)

Alexander Nekipelov (Chairman, Committee for Strategic Planning, VP Russian Academy of Sciences)

Kirill Androsov (Deputy Minister of Russian Economic Development & Trade)

Sergey Naryshkin (Deputy Chairman, Russian Chief of Staff)

Gleb Nikitin (Deputy Chairman)

Andrey Reus (Deputy Minister of Industry & Energetics of Russia).[9]

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  • 1 month later...

"We have two-and-a-half million people in jail this country, you know, more than a million who are in jail for nonviolent crimes. And yet, we couldn’t find a single person on Wall Street to do even a day in jail for losing 40 percent of the world’s wealth in a criminal fraud scheme?... This is a situation where the system is completely corrupted..."

~ writes Matt Taibbi in the new issue of Rolling Stone magazine.

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With quite a few nations having posted their 2010 data, i thought that it would be interesting to comapre the economic growth of the G14.

Data is below..

usa - 2.8%

japan - 2.4%

china - 10.4%

germany - 4%

france - 1.5%

uk - 1.7%

italy - 1.3%

brazil - 4.5%+

spain - 0.6%

canada - 2.3%+

india - 8.8%+

russia - 3.7%+

south korea - 4.7%

australia - 2.1%+

The + symbols indicate that data only extends upto Q3.

You can see clearly that China and India are on another level with Brazil, Russia and South Korea bringing up the rear of the runners. Spain is performing very poorly and has an unemployment rate of 20%, while Germany is the best performing developed economy.

While the developing economies are growing much faster, i have noticed that they all run 'hot'. What this means is that they all have high inflation rates, most likely to allow for low interest rates and weak currencies.

On the flip side, you have consistent economies such as Canada and Australia which record consistent growth which is weaker but with lower inflation rates.

In regards to the UK, i think that Italy could well overtake us in 2011 or 2012. We will likely take the place back after the cuts though.

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  • 2 weeks later...

Moody's has downgraded by three notches the six primary lenders to Greece citing an increased risk of sovreign default. Meanwhile Portugal's 10yr bond rate surged to 7.8% (111% return over term) whilst China has reported a shock $7.3bn trade deficit. And just to top things off, the ECB almost look certain for a rate rise shortly on the face of massively misreading the current oil supply shock (contracts are trading for $150-$200/barrel for later this year, ECB gambling on quick resolution)

Greece to go back to drachma, Portugal off to the IMF, and China to suffer all the problems of excess capacity? Germany, and France to leave the EU by 2013, perhaps, with the UK becoming embroiled in a North-Euro state union (UK, France, Belgium(!!), Netherlands, Germany)?

Edited by VillagePlank
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I see that Moodys have downgraded Spain's sovereigh debt rating today. The FTSE, Dax, Caa etc are all heading south. Oil is up as facilities in Libya burn. Then we've got the "day of rage" planned in Saudi Arabia tomorrow.

Should I be stashing gold under my mattress??

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I see that Moodys have downgraded Spain's sovereigh debt rating today. The FTSE, Dax, Caa etc are all heading south. Oil is up as facilities in Libya burn. Then we've got the "day of rage" planned in Saudi Arabia tomorrow.

Should I be stashing gold under my mattress??

Copper. Expectations on $15,000/t look reasonable on deficit forecasts, but still priced around $9,200t, today.

Edited by VillagePlank
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Moody's has downgraded by three notches the six primary lenders to Greece citing an increased risk of sovreign default. Meanwhile Portugal's 10yr bond rate surged to 7.8% (111% return over term) whilst China has reported a shock $7.3bn trade deficit. And just to top things off, the ECB almost look certain for a rate rise shortly on the face of massively misreading the current oil supply shock (contracts are trading for $150-$200/barrel for later this year, ECB gambling on quick resolution)

Greece to go back to drachma, Portugal off to the IMF, and China to suffer all the problems of excess capacity? Germany, and France to leave the EU by 2013, perhaps, with the UK becoming embroiled in a North-Euro state union (UK, France, Belgium(!!), Netherlands, Germany)?

As i have stated before so long as Spain survives, Germany will remain in the Euro.

That aside, i actually support a two state Euro although Belgium and Holland in their current states would not be members of the advanced Euro.The Scandinavian economies have much safer economies, i would be looking to them.

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I see that Moodys have downgraded Spain's sovereigh debt rating today. The FTSE, Dax, Caa etc are all heading south. Oil is up as facilities in Libya burn. Then we've got the "day of rage" planned in Saudi Arabia tomorrow.

Should I be stashing gold under my mattress??

You have gold to stash under your mattress?

I was advised to move my capital (house!) into gold stocks in 2008. I wish I had done it now!

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china - 10.4%

india - 8.6%

brazil - 5.0%

south korea - 4.7%

germany - 4%

russia - 4.0% (predicted)

canada - 3.2%

usa - 2.7%

australia - 2.6%

japan - 2.5%

uk - 1.6%

france - 1.5%

italy - 1.3%

spain - 0.5%

Growth figures could be changed however those were the final 2010 results.

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china - 10.4%

india - 8.6%

brazil - 5.0%

south korea - 4.7%

germany - 4%

russia - 4.0% (predicted)

canada - 3.2%

usa - 2.7%

australia - 2.6%

japan - 2.5%

uk - 1.6%

france - 1.5%

italy - 1.3%

spain - 0.5%

Growth figures could be changed however those were the final 2010 results.

Are these figures positive or negative? What does the "-" mean??

What grew? Can you explain why it was so important that we had growth or shrinkage? Were the people happier? Were they healthier? Or funnier? Hmmm....

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All positive, should of used : instead.

Those are the 2010 economic growth figures of the 14 biggest economies. It simply means those countries were slightly richer than the previous year.

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All positive, should of used : instead.

Those are the 2010 economic growth figures of the 14 biggest economies. It simply means those countries were slightly richer than the previous year.

Should have used...rather than "should of used". Your grammar is as lacking as mine!!!

Richer in what sense though SB??? If they earned a pound more but prices were a pound more who gained?

The economy grew but who gained?

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Should have used...rather than "should of used". Your grammar is as lacking as mine!!!

Richer in what sense though SB??? If they earned a pound more but prices were a pound more who gained?

The economy grew but who gained?

Very good point which is why i have the inflation data below and then the difference between the economic growth figures and inflation (note that inflation is measured using differing methods).

India: 9.4%

Russia: 8.8%

Brazil: 5.9%

China: 4.6%

UK: 3.7%

South Korea: 3.5%

Spain: 3.0%

Australia: 2.7%

Canada: 2.4%

Italy: 1.9%

France: 1.8%

Germany: 1.7%

USA: 1.5%

Japan: 0.0%

Certainly a large spread with India, Russia and Brazil at a clear risk of overheating.

Difference between economic growth and inflation below..

China: 5.8%

Japan: 2.5%

Germany: 2.3%

USA: 1.2%

South Korea: 1.2%

Australia: -0.1%

France: -0.3%

Italy: -0.6%

India: -0.8%

Canada: -0.8%

Brazil: -0.9%

UK: -2.1%

Spain: -2.5%

Russia: -4.8% (predicted Q4 GDP figure taken into account)

Very impressive figures from China, Japan and Germany although disapointing figures from UK, Spain and Russia.

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Very good point which is why i have the inflation data below and then the difference between the economic growth figures and inflation (note that inflation is measured using differing methods).

Good retort! :)

How much do you think events in Japan and the unrest across the middle east and north Africa will affect the global economy?

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I would say that there will be little chance of Japan seeing any inflation during 2011 however the economy should grow during Q2,Q3 and Q4, so not a major economic problem for them in terms of growth however the earthquake will only heighten their fiscal issues. During 2012 and 2013, there is actually the potential that the lack of supply caused by the earthquake may stoke some inflation and with the Yen liklely to stay weak from now until then, the Japanese economy could come out on top however they do need to tackle their fiscal defecit as soon as possible so for the sake of the economy they need as much private restructuring as possible.

In terms of the Middle East, the primary effect will be inflated commodity prices which will keep inflation high dampening economic activity for those nations who import oil.

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  • 2 weeks later...

A few thoughts on the World Economy about the below.

Firstly Japan: Initial esimates suggested that Japan would suffer a short-term drop of maybe 2% in growth over Q1/Q2 2011 due to the unfortunate events in March.

However these estimates are continually being worsen and the recent mega fall in both car production and car sales might well be a fore taste of things over the coming year. This is still the worlds 3rd largest economy and the JIT theory of production out there looks likely to make things much worse with impact on small key suppliers and rolling power cuts which look likely to continue for many months yet. Factories that are use to running 24hr with production and assembly lines that take several hours to start up and shut down are particularly vunerable. Consumer spending in Japan which was already weak will almost certaintly take a further hit. The knock on impact to the world will be an oppotunity for other similar exporting nations to step up and take the slack.

Secondly Oil: The unrest in the middle east is continuing and doesn't look to be getting better anytime soon. Libya does not look like exporting oil for awhile, the pro-western government in Yemen is almost powerless with a civil war still a very real possibility, issues in Bahrain and the entire government being sacked in Syria.

The affect on the world economy looks to be a simple one of increased instability and higher oil prices e.g inflation and a dampener on consumer spending in the west due to a higher proportion of disposable money going on travel costs.

The third main issue is still the PIGS: Greece is still a basket case, Ireland is having to find a extra 20bn or so to prop up it's banks again and still isn't growing. Portugal has seen a massive rise in the last few weeks in the amount of interest it needs to pay, mainly as it's missing all it's targets to reduce debt. Spain is still on the edge with an interesting report out indicating that the housing market and land that has been used as collateral is still maybe as high as 60% over valued when marked to market, this might sound a little too high in Jargon but essentially the domestic banks are not writing off as much as 100bn in debt doe to land price falls. All the while the EU muddles around and does everything except tackle the issue head on and advise the PIG to default.

An interest stat though is that profits have climbed by over 100% across the board in the western countries however real earnings have decreased by 3-5% during the same time. This cannot continue a earnings per share(EPS) must come down judging by the above.

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  • 1 month later...

The worldwide derivatives market is based primarily on credit and it is approximately ten times larger than it was back in the late 90s. There has never been anything quite like it in the history of the world.

So what in the world is going to happen when this thing implodes? Are U.S. taxpayers going to be expected to pick up the pieces once again? Is the Federal Reserve just going to zap tens of trillions or hundreds of trillions of dollars into existence to bail everyone out?

If you want one sign to watch for that will indicate when an economic collapse is really starting to happen, then watch the derivatives market. When derivatives implode it will be time to duck and cover. A really bad derivatives crash would essentially be similar to dropping a nuke on the entire global financial system. Let us hope that it does not happen any time soon, but let us also be ready for when it does.

http://www.dailymarkets.com/stock/2010/12/13/derivatives-the-quadrillion-dollar-financial-casino-completely-dominated-by-the-big-international-banks/

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Written by someone who calls their website "economic collapse"

Does a day go by when you're not fretting about something or searching for sites predicting some apocalyptic scenario? You think you're enlightened and the rest of us are naive. Even if you're right, at least the rest of us have had some fun along the way.

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