changes taking place in the economies all round 24 aug 11

8/3/2019 Changes Taking Place in the Economies All Round 24 AUG 11

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What is world

economy or globaleconomy?



` The world economy, or global economy,

generally refers to the economy, which is basedon economies of all of the world's countries, national economies. Also global economy canbe seen as the economy of global society and

national economies ± as economies of localsocieties, making the global one. It can beevaluated in various kind of ways. For instance, depending on the model used, the valuation that

is arrived at can be represented in a certaincurrency, such as 2006 US dollars or 2005euros.



` It is common to limit questions of the worldeconomy exclusively to human economicactivity, and the world economy is typically

judged in monetary terms, even in cases inwhich there is no efficient market to help valuatecertain goods or services, or in cases in which a

lack of independent research or governmentcooperation makes establishing figures difficult.Typical examples are illegal drugs and other black market goods, which by any standard are

a part of the world economy, but for which thereis by definition no legal market of any kind.



` In 2011, the largest economies in the world withmore than $2 trillion, ¼1.25 trillion by nominal

GDP are the United States, China, Japan, Germany, France, the United Kingdom, Brazil, and Italy.



`The events taking place inthe world right now have

lots of folks anxious,

nervous, lets discussthem«.?



` Japan, the world¶s third largest economy has just suffered atremendous blow, the total fallout of which is yet to bedetermined. The 9.0 earthquake has destroyed or damaged much of the infrastructure in parts of the country.The tsunami has devastated entire regions, while we have

all watched in horror. The Fukushima nuclear power plantdisaster is still unfolding and may leave that entire part of the country uninhabitable due to radiation entering theenvironment, soil, and water supply.

` Japan will pay many hundreds of billions of dollars (10s of Trillions of yen), if not much more, to rebuild. They mayhave to sell some of their U.S. Treasuries, and limit or eliminate new purchases of U.S. Treasuries.



` The situation in Libya, although hopeful for democracy, is adding more uncertainty to theentire Middle East region following the recentuprising in Egypt and the prospect of trouble in

Saudi Arabia. With oil at 100 dollars a barrel, every increase of a single dollar has a major impact on the costs of nearly everything that weconsume, as the increases are passed down to

the consumer and are magnified over layers of manufacture and distribution.



` The Fed continues to print money and to fund theU.S. government with their monthly 100 to 200billion dollar deficit spending. The U.S. dollar islooking worse and worse as an investment, and

other countries are working their way around thedollar and eliminating it from their transactions.For example, China now imports a huge amountof oil from Russia, and they do not exchange in

dollars. Buying U.S. debt (T

reasuries) is becomingless and less attractive for investors



` The derivatives time-bomb still exists (hundreds of Trillions of dollars), and is as bad or worse thanbefore 2008, according to many. The too-big-to-failinstitutions have received free money from the

Fed, even internationally, and continue to makebad bets. The U.S. government has nowabsorbed, or taken upon their books withguarantees, much of the µbad assets¶ from the too-

big-to-fail institutions.



`

Lots of opinion out there suggests that the run-upin the stock market since 2008 is directly due tothe Fed¶s injection of money into the system, andnot much of anything to do with personalinvestment money from you and I. Given theapparent fragility of this house-of-cards, somebelieve that a stock market crash is inevitable.



The Risk occurred

in world economydue to Global

carnage



` The point is

,it feels like things are quite shaky anddefinitely uncertain in the world right now. Given

the speed at which information moves today, andthe speed at which financial systems transactthese days, it may not take much to tip things over right now.



` It is a good idea for many reasons, to be preparedand take preemptive action with your finances andoverall preparedness plans when you think thatthings aren¶t going well out there. It certainly can¶t

hurt. A good thing may be to hold some cash asreserve (and not all of it in a bank). Have a look atyour own preparedness plans.



THANKYOU

changes taking place in the economies all round 24 aug 11

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