2011 Economic Forecast-Part 1: The World Forecast From a Us Perspective

2010 is ready for the history books and most of us are glad that year is finally in the rearview mirror. Worldwide economic collapse was avoided in 2009 and the global cheaper stabilized and strengthened some in 2010. However, the pace of saving was very modest in 2010, constrained by the continued effects of the Us retreat suppressing request and curtailing imports, and the Eu euro dollar debt urgency diverting hundreds of billions from the capital markets to fund internal urgency loans. With all the conflicting forecasts and lackluster predictions, what will the hereafter hold for 2011? Here's my forecast for the arrival year.

The World View from the Us Perspective Overall, the world economic saving is very fragile and economic power is rapidly concentrating in just a few nations surface the Us; the Opec oil exporting countries, the European Union, and China. Opec It's old news that economic power continues to grow in the oil exporting nations that we send our dollars to. What might be new news is that the much thinkable, peak in worldwide yield occurred in 2007 and 2008, much sooner than most predictions. China's emergence as a major crude importer caused worldwide request to outstrip yield capacity for the first time in history, resulting in spot market prices that reached article levels. Remember 0 per barrel crude and its consequent on fuel prices? While many nations export crude, the Opec cartel in general, and Saudi Arabia in particular, tries to balance their yield to have supply exactly meet worldwide demand. Opec's goal is to get maximum value for its diminishing resource, while balancing the knowledge that too petite supply will drive up prices and push the world cheaper into retreat (which results in lower yield and wage for their member countries). Expect the Saudis to vary their yield to try and hold spot market price at -0/bbl to perform this balance. However, China's emergence onto the world stage to compete for ready oil supplies means that the era of cheap vigor is ending. We just haven't realized it yet because the Great retreat in the Us (the world's biggest importer) has temporarily reduced its internal consumption and made more supply ready on the world market. In the meantime, China has supplementary increased its crude oil imports, taking up some of the slack. In this scenario the stage is set for an grand growth in oil prices when the Us cheaper recovers and returns to importing at previous levels to meet its vigor needs. The Opec bottom line - The most likely scenario is for a slow, steady growth in crude oil prices throughout 2011 as the global cheaper slowly recovers. An alternative scenario is for crude prices to remain essentially stable if request is suppressed by chronic retreat in the United States or China's real estate bubble bursts, sending it into economic retreat (see below for more on this possibility). Europe The at one time robust European Union is more and more often being viewed as a misfit conglomeration of "have" and "have not" countries. Germany and France are the economic powerhouses of the Eu. The economic weaklings are the so-called Piigs countries, Portugal, Italy, Ireland, Greece, and Spain, whose national budgets have been fueled by huge levels of deficit spending for any decades. In many cases now servicing the linked debt consumes double digit percentages of their national budget (Ireland's is an extraordinary 32%!) and is straining them to the breaking point. There is grand fear that these countries could default on their national debt obligations, dragging down the value of the euro dollar and endangering the economies of every Eu member. In 2010 Germany led the bailout attempt for Greece, which has had to reduce its national budget by a whopping 12%. The discount in original government services and linked layoffs has not been received well by its citizens as news coverage of the many nationwide demonstrations has shown. Ireland, which offered token resistance to the idea of a Eu bailout, was next on the list. Arguably, it's in the worst financial shape of any of the Eu member nations for two reasons. First, many years of deficit spending in concert with so many of it's sibling Eu members. However, unlike other Eu nations, Ireland also had its own real estate bubble growing, which finally (and inevitably) burst. Irish banks began to go insolvent when the values of mortgaged real estate dramatically declined. To quell a rising financial panic the national government then took the bold (and very risky) step of publically guaranteeing all deposits, after the fact, in order to stave off economic collapse. Unfortunately, the grand resources required to make good on that certify coupled with inadequate regulatory oversight to spot troubled banks before they failed, exceeded even what the Irish government could muster. The Irish government is now sporting a new 0B+ Eu loan to bailout its banks and keep the cheaper functioning. But, like Greece, the Irish bailout came at a cost of laying off thousands of government workers (further pushing up unemployment), cutting government salaries, and, most unfortunately, cutting the government pensions of those already retired. And also like Greece, Irish citizens are protesting in the streets over the discount in salaries and services. The creditworthiness of these countries had declined to the point where they were unable to borrow on the world market (at cheap interest rates) to fund their governments, and they wouldn't have been able to borrow at all if they had retained their national currency. Next on the bailout list may be Portugal or Spain. Note that Great Britain, which still uses the pound sterling and not the euro, is currently running equally high budget deficits, although for fewer years than its European neighbors. It has begun budget discount efforts driven by 2010 choosing results, which has resulted in the most civil aid layoffs since World War Ii and has reduced this once proud world power, whose national anthem is Rule Britannia, to investigating the sale of the Royal Mail aid to a foreign enterprise and exploring ways of sharing operating costs of its new aircraft carrier with rival France. Will the value of the euro dollar collapse or be abandoned by some Eu members? It's unlikely in the intermediate term because the weaker nations don't want to leave a currency backed by economically stronger nations. If stronger nations like Germany and France reverted back to the mark and franc, they would suffer an avalanche of capital inflow from those abandoning the weakened euro to seek currency stability. The 2011 Eu bottom line - The Eu will remain intact and (with the irregularity of Great Britain) will remain committed to the euro. That stability is good for the world recovery. However, Eu economies as a whole will underperform because of the hundreds of billions of euros in internal loans that will be diverted to bailout its weaker members. Look for the Eu to invent some type of controls to forestall its deficit spending members from chronic to drag down the whole Union. The Eu's possible to be an economic powerhouse will be unfulfilled until the finances of its major members are set in order. China Economic power is rapidly shifting east and troops power will soon follow. China is Very rapidly consuming beyond being merely a technologically backward player to becoming a dominant force on the world economic stage. One example of China's pace of improvement is its achievement of being only the 3rd nation in the world to place a human being in orbit, a distinguished feat by any measure. China is awash in the dollars amassed from their long term trade surplus with the Us, so many in fact, that they cannot turn them into the yuan, the Chinese national currency, to directly power their cheaper because dumping such a huge whole of dollars on the open market to buy up the ready yuan would severely devalue the dollar (sudden oversupply) and drive up the value of the yuan (sudden scarcity), making Chinese exports much more expensive. Obviously China doesn't want to impair its export driven cheaper by making those exports more expensive. So, what is China doing with all the dollars it's holding but can't convert? It's practically admittedly buying whole countries and continents! China is aggressively consuming to gain sources of raw minerals to ensure that its economic improvement can continue. It has invested heavily in Australian mining clubs to the point where Australia now derives a indispensable measure of its Gdp from mineral sales to China. China wants to supplementary growth its proprietary stake in these Australian corporations, but the Aussie government has refused to allow supplementary venture foremost to majority ownership, fearing a faultless takeover of its national mineral wealth. China is also investing heavily in natural resources across the African continent. Africa has very few large cap mining corporations on the continent (DeBeers of South Africa being one of the few exceptions), so China is dealing directly with each country's national government to negotiate exclusive deals to invent their mineral wealth. For African nations, in replacement for the exclusive right (key words) to exploit their mineral resources China offers to use its financial and technological muscle to rapidly invent the mines, often settled in remote areas, and linked infrastructure like rail lines and ports, along with guarantees to employ a large segment of a nation's habitancy in each mine's operation. This rags-to-riches promise is obviously consuming to impoverished governments with petite economic means to invent their mineral resources on their own, but it comes at a terrible price. So far the workforce for these mines has admittedly been hired locally, but their new work situation is far from Utopian. In most cases they "work for the enterprise store" as was coarse in the Usa a century ago, are charged exorbitant rent for living in barracks far from home, and make nearly every purchase at high price from local retailers thoroughly owned by the company. As you might suspect, petite is left to send home to the family after meeting these expenses. Meanwhile, management remains firmly in the hands of the Chinese corporations, effectively preventing African nationals from gaining management caress and enhancing the intellectual capital of their country. The consequent of all this activity will be to finally drive up the cost of strategic minerals worldwide as China locks up the remaining mineral resources essentially at the cost of extraction. Finally, China is in the midst of its own housing bubble fueled by rampant real estate speculation, very similar to what the Us experienced early in this century. The rapidly growing Chinese middle class has very few financial instruments to invest in, but real estate is ready to whatever with adequate cash to fund the purchase. In a Chinese version of Flip This House, individuals and extended families are investing in real estate for the sole purpose of the anticipation of selling in the near hereafter at grand profit. After watching the fallout when the bubble burst on the American market, Chinese officials recognize the dangers and are taking steps in their command-and-control cheaper to cool things off. Recently, foreigners have been petite to a purchase of a singular home in China, the government is urging banks to curtail reputation used for real estate purchases (not thinkable, to have much of an consequent since most purchases are 100% cash), and is talking about limiting the whole of houses, apartments, or condos that their citizens can own at one time. If the Chinese real estate bubble bursts causing a huge loss of personal net worth like the American bubble did, you can expect China's internal consumption to dramatically decline, reducing the volume of buyer goods that China imports from nearby the world. A dramatic discount in Chinese imports could tip the world back into retreat as exporting nations lose the jobs and wage exporting to China provides. The 2011 China bottom line - China's consumption of world resources has reached the point where it affects worldwide market pricing and availability. If China's cheaper continues to perform well in the arrival year, it will compete more aggressively on the open market for petite global resources. Much depends on whether the government can reign in internal real estate speculation. The most probable scenario is that China will successfully cool off the overheated housing market that threatens its economy. However, if the real estate bubble bursts, then China's new middle class will lose a indispensable measure of its wealth, driving down internal consumption. Dramatically reduced imports of luxury goods and high end man-made products will impact the global saving and could yield an additional one global recession. The 2011 World Economic Forecast Most likely scenario - Slow, steady economic revising as the Eu powerhouses (Germany and France) continue to fund bailouts of its heavily indebted partners in the euro dollar and China avoids its own economic retreat by deflating its real estate bubble. Alternative scenario - Worldwide retreat if any European nations abandon the euro dollar and revert to their own sovereign national currencies or China's real estate bubble bursts, seriously reducing its internal consumption and the imports it drives. The retreat could be severe in this scenario, since the United States' own economic saving will not have progressed to the point where it can make up for the reduced request on the world market. The countries who will be least affected and could emerge as new economic superpowers would be Germany, France, and the Opec countries who have amassed decades of oil trade surplus funds. I share my economic forecast for the Us in 2011 Economic Forecast - Part 2: The United States (Us). Which scenario will come to pass? It's hard to tell because we haven't been here before, but I've shared my best guess. Do you think I nailed it or do you have a distinct opinion? I look transmit to your thoughtful comments, insight, and opinions.

Economic Collapse - Final Warning (Part 2)

Jobs aren't there, their belief is shrinking to article lows. You find that the borrowing capacity is there it is just not happening. It isn't happening because there isn't a demand.

Lets look at real estate. Housing one of the biggest ways that habitancy in America feel like they have something. This is the way we have felt wealthy. When our houses were going up in crazy value we all felt like we had money. We all felt like we could borrow more money, and use it, and we were deluded. But right now, interest rates are the bottom they have ever been in a century. 4.5% fora 30 year loan. These are unbelievable levels. But no one is buying houses. Every person is hanging on to their money, thinking this game is not over.

Sevenfold

Now banks are selling more homes than home builders. A lot of them are hanging onto things and not even foreclosing yet, because they want to flood the store value prices and force the prices down even further. But yet arm rates, the adjustable mortgages, they need to be adjusted over the summer and fall. That means it is inevitable that there will be more foreclosures.

We have seen a 68% drop in new mortgages that have been issued. Last month, they hit a low of 1996 levels, even with these very low rates. A lot of the Realtors are a bit panicked right now. But the point to all this is that spending is not there. The stimulus holder is gone, the first home buyers grant is gone, and the store is beginning to slow back down again. This is going to result Every person in every different way.

Look at banks themselves, who are trying to make money loaning money but habitancy do not want to take loans out. Businesses are not borrowing that money right now. Businesses are not expanding, they are hanging on to everything. Trying to do this as efficiently as they can. They are not stimulating jobs. Big businesses are where most of the jobs come from in our working world.

No matter how much the fed stimulates. Even though they have bought up a trillion dollars in unmortgaged securities to bring interest rates down, the interest rates have come right back down, and habitancy are still not borrowing. If you have a look at history of what happened in Japan, back in the 90's there was a huge bubble in the real estate store and the stock market. Those bubbles shrank, and no matter how cheap it got to borrow money, they plainly turned their heads and refused to borrow it.

Consider that at present we are going through a detox. It is like we have been on drugs, called "credit" and over stimulation. Now the entire of society have to cut down, be smart. Just like detox, you have to sit down and get that poisonous venom out of your system, and it is going ot be painful for a lot of people.

Do not plainly think this is the end of the road. This is merely a seasonal change. Along the way, the smart habitancy will be able to see opportunity, even though things will get bad for a while.

If you have exposure to the stock market, and it is any exposure that matters to you. It is not in any form of food, or alcohol or tobacco, that normally goes through recessionary or depressionary times. You might think to yourself, it is time to educate myself on how to do well in tough times. You might think right now, is the right time to keep on the back foot, and minimize your risk. The stock store for example has seen major boom in 2009. In fall we are likely to see a major retracement. Please take note of this, and remember that normally after a big run up we see a important revision to the downside. You don't well want to be in a position to see your great returns hurt. You can also take up short positions on the store and make a large sum of money then the store comes down. There are many of these opportunities that are out there.

Ben Bernanke who has been talking of roses during this horrible time said these things just 2 weeks ago.

- "These are the worst labor markets since the great depression"

- "Housing remains weak, with the overhang of vacant and foreclosing property"

- "The time to come risks of unemployment is greater than normal and a majority of risks to increase as weighted to the downside "

- "Bank loans have prolonged to contract, small businesses that rely on prestige have been particularly hard hit!"

These are extremely technical terms that relays the federal support chairman is uncertain of the future.

While all these figures and facts might be depressing. There is no need to be like this. Here are 5 uncomplicated things you need to do:-

1) Today make a decision you need to take benefit of the cards that have been dealt to us. Get smart and wake up to what is going on.

2) Put yourself in a position where you educate yourself. through an organization, seminars, books, library or wherever. Learn how to take benefit of what is happening. Learn all the different tool, and techniques that when things go down, you can do well well. You need to be educated. You need to know what you are doing.

3) Get yourself some role models. Role models that know how and what to do. Role models that have done well themselves in tough times before. Perceive that in maximum time of pessimism you can make the most money.

4) Take action. One you have got your education, and implementation make sure you act on that information. This is the part most habitancy miss out on and Perceive why they are not succeeding. Make sure that you have a solid plan, act it out, and you are sure to find success.

The final message is that you need to give more than you expect to receive. If you do this during this economic collapse, the laws of the universe will come back and pay you back sevenfold. You will put your own problems in perspective and you will make your life feel more meaningful.

This is an chance to get close to our family and friends. It is a time to convert the potential of our lives for the better. And if you are smart, it is a time where you can do very well financially. Forget what others are telling you.

Furthermore, live strong, live with passion and look forward to the many challenges and opportunities that lay ahead. Good luck!

Economic Collapse - Final Warning (Part 2)