2010 is ready for the history books and most of us are glad it is finally in the rearview mirror. Worldwide economic collapse was avoided in 2009 and the global economy to stabilize and strengthen one in 2010. However, the rate of recovery was very modest in 2010, limited the continued operation of a U.S. recession suppressing demand and restrictions on imports, the EU and the dollar-euro debt crisis is diverting hundreds of billions of capital markets to finance internal emergency loans. With all the conflicting predictions blurry, what will the future hold for 2011? Here are my predictions for next year.
view the world from the perspective of the U.S.
All in all, the world economic recovery is very fragile and rapid concentration of economic power in just a few people outside the U.S.,. OPEC oil exporting countries, the European Union and China
OPEC
This is old news that the economic power continues to grow in the oil exporting nations to send our dollars. What could be the new news is that a lot of expected peak in world production occurred in 2007 and 2008, much earlier than most predictions. China's emergence as a major importer of crude due to the global demand to exceed production capacity for the first time in history, resulting in market prices that reached record levels. Remember the $ 150 per barrel of crude oil and its impact on fuel prices?
While many nations export of crude oil, OPEC cartel as a whole, and particularly Saudi Arabia, trying to balance their production in order to correctly supply meet worldwide demand. OPEC's objective is to obtain maximum value for fewer resources, while balancing the knowledge that too much supply will drive up prices and push the world economy into a recession (which results in lower production and revenue for Member States). Expect Saudis to vary their production and try to keep prices in the spot market $ 90 -. $ 100/bbl to achieve equilibrium
However, China's emergence on the world stage to compete for the available oil supplies means that the period of cheap energy is over. We just have not realized this yet, because a severe recession in the U.S. (the world's largest importer) to temporarily lower its internal consumption, and made several deals available on the world market.
In the meantime, China has further increased its imports of crude oil, which some of the slack. In this scenario, the stage is set for an astronomical rise in oil prices, when the U.S. economy recovers and returns to the previous level of imports to meet its energy needs.
lines of OPEC and the bottom - the most likely scenario is for a slow, steady rise in crude oil prices during 2011 kaoglobalno economy is gradually recovering .
is an alternative scenario for crude oil remains essentially stable if the demand is suppressed by continued recession in the U.S. and Chinese real estate bubble bursts, it sends in a recession (see below for more on this feature).
Europe
before a robust European Union is becoming more and more often seen as unfit conglomerate "have" and "have not" countries.
Germany and France are the economic powerhouses EU.Gospodarski weaklings are called PIIGS countries, Portugal, Italy, Ireland, Greece and Spain, whose national budgets have triggered a huge level of deficit spending for decades. In many cases now, debt service related uses double-digit percentage of their budget (Ireland is a stunning 32%!), And are straining to the breaking point.
There is considerable fear that the country could default on its domestic debt obligations, dragging down the euro and the dollar threatens the economy of each member country. In 2010, Germany led the rescue effort for Greece, which had to reduce its budget by a whopping 12%. Reduction in the traditional civil service and the associated layoffs is not well accepted by citizens as news to many countries has shown a demonstration.
of Ireland, which has offered a sign of resistance to the idea of EU rescue, was next on the list. Undoubtedly, this is the worst financial condition of any EU member states for two reasons. First, many years of deficit spending, in agreement with such a sibling members of the European Union.
, however, unlike other EU countries, Ireland has also had his own real estate bubble growth, which was eventually (and inevitably) burst. Irish banks started to go insolvent when the value of real estate mortgage has dropped dramatically. To quell the growing financial panic of the national government then in bold (and very risky) step by publicly guaranteeing all deposits, after the fact, to reject the economic collapse. Unfortunately, the vast resources needed to make good on that guarantee, combined with inadequate regulatory oversight to spot troubled banks before failed, exceeded even what the Irish government could ponuditi.Irska the government now sporting a new $ 100B + EU loan to save their banks and keep the economy.
But, like Greece, Ireland's salvation came at the expense of laying off one thousand state employees (hereinafter pushed unemployment), cutting the state payroll, and most unfortunately, the government cut pensions of those already retired. I also like Greek, Irish citizens are protesting in the streets in a decrease in salaries and services.
the creditworthiness of these countries has fallen to the point where they were able to borrow on world markets (at reasonable interest rates) to fund their government, and they would not be able to borrow at all, if it maintained its the national currency. Next on the list of rescue could be Portugal and Spain.
Please note that Britain, which still uses the pound, not the euro, currently running as a high budget deficit, although for fewer years than their European neighbors. She began the budget reduction efforts drive up to 2010 election results, which resulted in the highest civil service layoffs after World War II and has reduced this time, proud world power, whose national anthem is Rule Britannia, the testing service Royal Mail sold to foreign companies and research ways of sharing costs of its new aircraft carrier to rival France.
Will the value of the euro dollar collapse or be abandoned by some members of the EU? It is unlikely in the medium term, because the weaker nations do not want to leave the currency backed by a stronger nation economically. If the stronger countries like Germany and France returned tags and frank, they will suffer an avalanche of capital inflows from those leaving the euro weakened to seek currency stability.
2011 the EU and the bottom line - The EU will remain intact, and (with the exception of Great Britain) will remain committed to the euro . It is good for the stability of the world recovery. However, the EU economy as a whole will underperform because of the hundreds of billions of euros in internal loans will be redirected to the rescue of its weaker members. Look for the EU to develop some kind of control to prevent members of the deficit spending from continuing to pull the whole Uniji.EU potential to be an economic powerhouse will be unfulfilled until the finances of the principal members of the set in order.
China
economic power is moving quickly east and military power will soon follow. China is rapidly moving beyond just as technologically backward player to become a dominant force on the world economic scene. One example of China's pace of his achievement is only the third nation in the world to place a man in orbit, a remarkable feat for any measure.
China is awash in dollars accumulated from long-term trade surplus with the U.S., so many in fact, it can not be converted into yuan, China's national currency, in order to directly power its economy, because the damping, as a major dollars on the open market purchase available yuan will sharply devalue the dollar (a sudden oversupply) and drive the value of the yuan (the sudden lack of), as Chinese exports more expensive. Clearly China does not want to disrupt their export drives the economy by making exports more expensive.
So, what China is working with all the dollars it holds, but can not convert? It is almost literally buy a whole countries and continents!
China is moving aggressively to provide sources of raw minerals to ensure that its economic development can continue. It has invested heavily in Australian mining company to the point where Australia is now a substantial part of GDP than mineral sales in China. China wants to enhance its stake in the Australian corporations, but the Aussie government refused to allow further investment takes majority ownership, fearing a complete download their national mineral wealth.
China has also invested heavily in natural resources throughout the African continent. Africa has very few large-cap mining corporations on the continent (De Beers South Africa is one of the few exceptions), so that the China deal directly with each country's national government to negotiate exclusive deals to develop its mineral wealth.
for African nations, in exchange for exclusive rights (keywords) to use its mineral resources, China has to use its financial and technological muscle to quickly develop the mines, often located in remote areas, and associated infrastructure such as railway lines and ports, with a guarantee to employ a large part of the nation's population in each mining operation.
This rags-to-riches promise was obviously appealing to poor governments with limited economic resources to develop its mineral resources on their own, but it comes at a terrible price. Until now, the labor force for these mines was really engaged at the local level, but their new work situation is far from utopian. In most cases they are "working for the company store" as is usual in the United States a century ago, charged exorbitant rent to live in barracks away from home, and make almost any purchase at high prices from local dealers wholly-owned company. As you might suspect, there is little else to send the family home after meeting these costs.
In the meantime, management remains firmly in the hands of Chinese corporations, effectively prevents the African nationals from gaining experience and improving the management of intellectual capital in their country.
effect of all these activities will ultimately drive up prices of strategic minerals throughout the world as China's blocking of the remaining mineral resources essential to the price of extraction.
Finally, China is in the midst of its own housing bubble driven by rampant real estate speculation, very similar to what the U.S. experienced at the beginning of this stoljeća.Brzo growing Chinese middle class has very little financial instruments to invest in, but the property is available to anyone with enough money to finance the purchase. The Chinese version of Flip this house, extended families, individuals and investment property for the sole purpose of sales prospects in the near future at a substantial profit.
After watching the fallout when the bubble burst in the U.S. market, Chinese officials recognize the danger and take steps in their command and control economy cool things off. Recently, foreigners are limited to buying a house in China, the government urges banks to reduce credit used to purchase the property (not expected to have much effect because most purchases are 100% cash), and talking about limiting the number of houses, flats, apartments, or that their citizens may own at one time.
If the Chinese real estate bubble bursts causing great loss of personal net worth as an American bubble has done, you can expect China internal consumption drastically reduced, reducing the amount of consumer goods that China imports from around the svijeta.Dramatično reduction in Chinese imports could top the world back into recession as exports people lose jobs and revenue in exports to China provides.
2011 China bottom line - China's consumption of resources the world has reached the point where it affects the world market prices and availability . If China's economy continues to perform well in the coming year, it will compete more aggressively in the open market for limited global resources.
Much depends on whether the government can reign in the internal real estate speculation. The most likely scenario is that China has successfully cool the overheated housing market that threatens the economy. However, if the property bubble bursts, then China's new middle class will lose a significant portion of their wealth, driving down internal consumption. Dramatically reduced the import of luxury goods and high end products produced will affect the global recovery and could produce more of the global recession.
2011 World Economic Outlook
the most likely scenario - Slow, steady economic progress as the powerhouses of the EU (Germany and France) continue to fund the rescue of their very grateful to the partners in the Euro dollar and China to avoid its economic recession, deflating its real estate bubble.
alternative scenario - in a world recession if several European countries leave the euro and the dollar return on their sovereign national currencies or China Real estate bubble bursts, seriously reducing their internal consumption and imports vozi.Recesija it might be difficult in this scenario, since the United States' own economic recovery will have progressed to the point where it can compensate for reduced demand on the world tržištu.Zemalja that will be least affected and could emerge as a new economic superpower that is Germany, France and the OPEC countries, who have amassed decades of oil trade surplus of funds.
I share his economic outlook for the U.S. 2011 Economic Forecast - Part 2: United States (USA) .
Which scenario will come to pass? It's hard to say because we have not been here before, but I've shared my best guess. Do you think I nailed it or have a different opinion? I look forward to your thoughtful comments, insights, and opinions.