The State of the Global Economy (Non-SC)

With America's economy souring again, Europe still cemented in place by debt, China slowing and India slipping, where do you all think the global economy is headed? Is it another recession? Is it another depression? Should we consider that the economy for the past 4 years has been in a depression, but we haven't recognised it yet?

Furthermore, with the powerhouse of the world, China, starting to slow thanks to reduced demand for their manufacturing, what does this mean for the 'new world superpower' and 'second cold war'? Does China's slowdown benefit America in some aspects? How will this impact on resource dependent nations such as Australia?

In my opinion, China was always a timebomb. A massive housing bubble where entire cities lie empty, sluggish overseas demand, and a frugal society means China can no longer sustain economic growth of 8%+. Furthermore, if China does land hard, don't expect the Chinese Government to stimulate the economy aggresively. Since China's Government is largely reliant on selling land to private enterprise and taxes for income, a large dry-up in tax revenue would be disasterous, and would leave regional governments unable to afford ambitious infastructure projects.

Greece and the Eurozone is a basketcase.

Discuss.

Worldwide economic collapse! The likes of which haven't been seen since the fall of the Roman Empire.

The USA are dragging the whole world in chaos due to their inability to stop borrowing. Pathetic really.

I'm not sure that a forecasted .5% drop in growth will raise that many alarms. This also reflects much of what Mr. Morgan was discussing - as China begins to turn inwards away from foreign markets, and begins developing domestic ones.

I see bleak prospects for American advancement - unless this is a protracted process. America has already lost a huge measure of the industrial capacity.

Resource based economies will be impacted, and probably hard. Even a small down turn adversely affects them. I'd look for political maneuvering on their part to keep some kind of subsidy operation running with China or other large manufacturing nations. Not sure how that ties into the process of China reaching out to Russia and the Eastern European nations of broadening trade ties.


I'm not sure we've hit the depression benchmarks yet. But I don't stay up with currency fluctuations on the world market. If European countries such as Greece and Portugal head into that, and start dragging everyone down - we're definitely in for a historic depression.

Maybe some good will come out of that - with stricter limits on government borrowing.

that makes no sense, how does the usa borrowing to much money cause other countries to borrow money there economy can't handle. if any thing its pathetic on the other nations who went bankrupt and others who need massive sums of money to bail their entire country out.

Americas largest trade partner is the e.u. and american business are now expanding in many more developing countries like Brazil, Argentina and India. and china isn't going any where as long as it remains communist.

Forecasts for Brazil's economic growth continue to be downgraded. - some indicators already have been downgraded 7 times this year, with more on the horizon.

Argentina, 25% inflation, severe economic growth problems, people being restricted from leaving the country without reporting to tax collecting agencies their tax number, where they are going, and length of stay etc. To fight the flight of currency.

India again, inflation problems. Massive borrowing for social programs, along with red tape, corruption, and the declining value of it's national currency. It's in for more shocks.


These are not good markets for expansion.

China's slight drop in growth rate pales in comparison.

"The USA are dragging the whole world in chaos due to their inability to stop borrowing. Pathetic really."

"Americas largest trade partner is the e.u. and american business are now expanding in many more developing countries like Brazil, Argentina and India. and china isn't going any where as long as it remains communist. "

WOW LOL these posts are in all respect stupid.

You all need to pick up some books on economics and if you have time some history books as well.

Some points before I finish this post.

The biggest trading partners of the US as a single economy is North America, being mexico and canada, with 1,056T in total trade compared with 636B for EU. Also pacific trade now totals more than atlantic trade. Europe will not pose a significant trade dent to the US and will not harm US growth.

Also although the US has more debt since george w bush, and obama took office going from 5T to more than 13T. This also does not pose a significant problem. We spend less on debt servicing than we did when we had 5T in debt the reason is low interest rates. The average 10 year bond used to be 5-7% today it is at 2-3%. WE can spend another 30T and still be okay.

Also the reason the federal reserve is keeping interest rates low and injecting money into the economy is to keep the price of the US dollar low compared to other currencies. This cuases our products to be cheaper increasing exports and makes imports more expensive. This also has another good affect, it creates inflation in other economies such as china, russia, brazil, and other emmerging economies.

Today is the perfect time to invest in the US, i have 90% of my money in US equities and 10% in US futures for the long term.

And for those who think chinas military is also on the rise and that our influence is going away let me remind you that china recently placed a woman in space and docked with a capsul. Something we did in the late 70's and early 80's. Today we have something way better, X-37C and also the Falcon 10. Technology that is 30-40 years ahead of china.

To all those that think that the US economy and military might is going away I say pick up a book and do some research, the US will continue to be the worlds sole superpower for the foreseeable future.

usa spent more on military than the rest of the world's countries, that ought to teach us something in sc?

aussies are just have too much "no worry" atitude, that's what has been dragging its economy down

china could probably sustain its own survival even if the rest of the world falls apart. it has a quarter of earth's human population, and is still a sleeping giant.

I agree with Phoenix King. Investing in American companies is a good idea, and many people forget that the United States prints its own money, and thus can't go bankrupt like any ordinary company can.

Printing your own money is not a guarantee for survival. Most countries print their own money. In fact, printing your own money could be extremely dangerous, provided that the central bank's policy is not independent from political wishes. There are numerous examples where national governments thought to solve their problems by printing more money, not knowing that this would create hyperinflation (see: the Weimer Republic in the 1920s, or Yugoslavia in the 1990s).

non of the countries i mentioned have any where close to 25% interest rate the highest is about 9% most have had a resent slow down but for the most part they all have been growing at a yearly gdp average of 5-7% they all have high business and consumer confidence. they have unemployment rates all lower than 9%. so american companies have been trading increasingly with them, and according to the census bureau for this year so far, Brazil is the us's 9th largest trade partner.

and phoenix you got me of the trading part but everything else i said is accurate.

the u.s isn't losing any power its just that these countries are starting to realize their economic capabilities. and yeah china is a sleeping giant but as long as it stay communist it isn't going to realize its full capability. it has about 20% of the world population, it should be an economic powerhouse.

i meant inflation rates.

China isn't Communist. It is a single-party capitalist country.

Communism is a economy in which everything is owned and distributed by the Government, and all companies are state owned. China allows foreign and private enterprise, and thus is a mixed market capitalist economy.

according to any official documents china is a communist part. its is kinda starting to loosen up a little bit economically. it allows more foreign development of private companies but domestically it has little privation so for the most part it is still a communist state and until it changes that it won't reach its full potential.

From a political point of vies, China is indeed a socialist country. However, economically, it has a mixed economy with elements from capitalism and socialism. This discrepancy between the political and economic systems enforce the already present social unrest and discontent in the Chinese government.

Nevertheless, there is another, much bigger time bomb under China: ageing.

vies = view

And no, the difference in systems do not lead to a discontent in the government, but within the society.

Sorry for the mistakes. It is 4.40 AM here.. (still have to finish an essay)

The world bank is sending america broke and the rest of the world whom most have fallin into the trap of the central banks

I was going to bring up hyperinflationary problems dominik waves fist! hehehe

Phoenix king you are wrong on so many levels, what you are saying is the entire cause of building the bubbles. Debt carries interest, interest is a steady payment sure, but we aren't paying it we're hedging it. These interest payments are becoming more debt that carries more interest. Take the Obama Administration for example he has made several moves to limit the deficit but our debt grows faster than before? because sheer volume increases our interest levels.

To anyone who is uncertain of the whole depression thing, there are two common real definitions for a depression that mean close to the same thing. Bassically if a society is void of expanses and the norm of life is downgraded that is a depression, well until it becomes the new standard of living that is. So yeah we were in a depression but not anymore, depression is a scary word but there are recessions that are worse then depressions, such as Yugoslavia as stated earlier.

Anywho world wide economic collapse is imminent, there are a few first world countries I see immune to it South Korea, Singapore, Luxemborg, and Qatar. But war can certainly mess every one of them up. The catalyst is obvious too, nobody has a clear sense of value at all! No first world country cares about building efficiency at all anymore. Take outsourcing to China for example. It cuts labor costs, good thing? No not for anyone! There is the obvious fault of taking jobs away from the consumers, but thats not all of it. Without the need to cut labor costs we no longer need to invest in robots to take those jobs, there is no need. That is one mere example, I can supply others. If we consume more but don't increase our efficiency we are stagnating ourselves. The only reason those 4 countries stand a chance is because they are more self sufficient then any other first world country, but if SK doesn't quit it with this technocrap they too are going to become more dependant. I'm sure I sound like a conspirasist right now, but a full explanation would be way to long for you all to read. But I'll just do a name drop of wealth disparity, and class welfare to add to the conversation.

Oh yeah and China

China isn't any economic system, they are a short term oppurtunistic aristocracy. They work like a communist system in which the government is at the root of all the money, and they torment there people with that power. But they aren't communist because they lose sight of the only reason marxian materialism (communism) works. The stregnth of the people not the government is what empowers industry. But that really isn't the problem either, the problem is China doesn't own anything really. No communist country would ever allow the bourgeious to be from another country, that makes no sense, there is no growth.

China is more doomed then even Greece in the long term, if they do build their infrastructure they lose the low labor rates and they have absolutely no foreiegn or ummm... well any large industry. Also if consumer levels fall anywhere in the world China is affected, big time. These contracts to get quick buck are counteractive. These low interest securities are counteractive, China is becoming the most dependant country in the world, and that carries so much risk, it's what is going to be the big bubble burst, leading to mass war.

So China's goverment should really be classifed as a retarded tyranny if anything.

"WARNING: Tony Robbins issues dire predictions on the coming collapse":

http://www.youtube.com/watch?v=TRaLytkf6vU&feature=share

WOW, really you think im wrong, let me remind you that i am the lead fund manager for an insurance company and i handle a big portion of their investment porfolio. Saying your wrong and explaing why i am right will take to much time, so i will prove it by saying this. Wait 5 years from now, the US will grow faster than 4% in GDP and china will slow below 4%, emerging markets will slow below 3% amd the US energy market will double greatly reducing our need for oil from other countries. The US is in the best strategic postion both economically and militarily than in the past 30 years. If you think the US is going to fall than invest in china and other emerging economies but if you think im right than place 100% of your assets into US equities and futures and we will see in 5-10 years who was right.

You're forecasting Chinese GDP growth under 4% in the next 5 years? That seems positively radical.

I like a classic mixed risk asset portfolio, of 30% US Large caps, 30% US mid-small caps, 30% Foreign (although, i'm thinking of cutting that back a bit to 20 maybe), and 10% in bonds. It seems like PK is saying to go all in on the US stock market. I'd say he might be right for this reason...as the rest of the world looks less attractive, money doesn't die, and isn't lost, its like energy, it has to go somewhere. American companies, with their huge cash hordes and relatively decent regulatory environments, are very safe places to put money compared to other places to put money.

I don't think China will have the hard landing many think will happen. They will slow drastically but 5-8% growth is not unreasonable. Europe is a joke indeed and the US will follow if we don't change our spending patterns but we do have a bit further to go before we have to start comparing it to the Europe debt crisis. Most of the issues here in the US are caused by do nothing congress and won't change until there is a clear majority with a clear direction on where this country needs to go.

The US Dollar will become worth less than the paper it's written on because printing money devalues the worth of that money as you can see with oil prices going up. Oil prices are set in US$ around the world. The oil isn't going up the US$ is going down.

Gold, silver, food, water, and energy will have far greater value than a US$ in a post economic collapse.

The US is heading for disaster for 2 reasons:

The huge debt which has become a debt trap and to just even balance the payments would cause civil unrest like what you're seeing in Greece now but with no one to bail the US out! The rest of the countries in the world would follow and civil unrest would follow.

There isn't enough money in the world to pay all of the debts.