New World Order Will Emerge In 2009, With U.s. Plunging

[BygonKeaw]

Every so often in the history of international affairs, a great transnational turbulence shakes the foundations of the world and brings many of its older structures tumbling to the ground, as we witnessed in 1919, 1945 and 1989. In the confusion and babble that follow, it's difficult to see through the dust and recognize the shape of the altered strategic landscape.

Peering through the wreckage of the past year's financial crisis, it seems clear that every nation was a loser in 2008. The world's developed economies have taken a heavy beating, whether measured by their collapsing industrial production, tumbling exports, surging unemployment, frozen credit markets or the near- paralysis of maritime trade.

Yet we also hear cries of distress across the globe. Vladimir Putin's proud Russia is reeling toward internal collapse. China is sending factory workers home to the countryside. The International Monetary Fund is trying to rescue Iceland and Ukraine from economic oblivion. Brazil's currency is plummeting against the U.S. dollar. And the brief honeymoon for commodity-exporting African countries is over. Which national economy didn't take a blow to the head in this annus horribilus?

When the dust settles, will we see all countries equally battered, like the streets of Dresden after the Allied bombings in February 1945? Will every power simply have taken several steps backwards, so that the "order of things" that existed in January 2008 will be the same in december 2009? I doubt it?

In the midst of general turmoil, there are always relative winners and losers. Those who are likely to lose most in the coming year will include Russia, Venezuela and Iran (too dependent on oil), most of Africa and Latin America (too tied to commodities), and Japan, Taiwan and South Korea (too wedded to exports, shipping, electronics).

By contrast, and unless it falls into the trap of a Pakistan war, India will advance; none of its banks (so far) are on the Bear Stearns Cos. track. China will take hits, but that probably means an increase in economic growth of 5 percent or 6 percent, deriving more from domestic development, and less from cheap exports.

Europe's prospects for 2009 are mixed, which is simply another way of saying that here, too, there will be relative winners and losers. Norway will ride the storm on its still-massive currency reserve and the rest of Scandinavia has strength in depth -- unlike the less competitive economies of East and Central Europe. Germany's combination of ultra-high-quality production, superb infrastructure and financial caution (few Germans use credit cards: Americans, take note!) give it strengths that are lacking in the U.K., France, Italy, Spain, Greece and other European countries that fell for easy credit and large government deficits. Prussian fiscal rectitude will keep the euro high, and compound the dollar's weaknesses.

The biggest question concerns the United States. My instinct tells me it will lose ground in 2009. I simply don't see how the Treasury can print $1 trillion to cover deficit spending, offer those bills at very low interest rates, and expect foreigners (not Americans, because we don't have the savings) to buy them, persuading the world to keep afloat its greatest debtor since Phillip II of Spain. Why should sensible Chinese investors do that when they can buy Swiss bonds, gold, or Scottish real estate? Yet if Asians decline to buy tens of billions of Treasuries each month in 2009, U.S. interest rates will have to go up again.

So: India up, China up, Germany up (all relatively). The developing world down, Russia down, most of Europe and Japan down, and President Barack Obama's America down and down.

Edited January 15, 2009 by BygonKeaw

[thaimate]

AND THAILAND,WHERE WE LIVE/

[hhgz]

"...older structures tumbling to the ground, as we witnessed in 1919, 1945 and 1989."

What "transnational turbulence" shook foundations 20 years ago?

[Bizz]

when copied state where. press me

[12DrinkMore]

Well, there were a few minor events

- The Berlin Wall falls.

- Pro-Democracy demonstrators are massacred by the Chinese government in Tiananmen Square.

but the world shattering one was that

Daniel Radcliffe, who portrays Harry Potter, is born to Marcia and Alan Radcliffe.

:D

[britmaveric]

So: India down, China way down, Germany way down. The developing world down, Russia down, most of Europe and Japan down, and US up.

I do agree the yanks will pull the world out of this mess, like they always do.

[toptuan]

Every so often in the history of international affairs, a great transnational turbulence shakes the foundations of the world and brings many of its older structures tumbling to the ground, as we witnessed in 1919, 1945 and 1989. In the confusion and babble that follow, it's difficult to see through the dust and recognize the shape of the altered strategic landscape.

Peering through the wreckage of the past year's financial crisis, it seems clear that every nation was a loser in 2008. The world's developed economies have taken a heavy beating, whether measured by their collapsing industrial production, tumbling exports, surging unemployment, frozen credit markets or the near- paralysis of maritime trade.

Yet we also hear cries of distress across the globe. Vladimir Putin's proud Russia is reeling toward internal collapse. China is sending factory workers home to the countryside. The International Monetary Fund is trying to rescue Iceland and Ukraine from economic oblivion. Brazil's currency is plummeting against the U.S. dollar. And the brief honeymoon for commodity-exporting African countries is over. Which national economy didn't take a blow to the head in this annus horribilus?

When the dust settles, will we see all countries equally battered, like the streets of Dresden after the Allied bombings in February 1945? Will every power simply have taken several steps backwards, so that the "order of things" that existed in January 2008 will be the same in december 2009? I doubt it?

In the midst of general turmoil, there are always relative winners and losers. Those who are likely to lose most in the coming year will include Russia, Venezuela and Iran (too dependent on oil), most of Africa and Latin America (too tied to commodities), and Japan, Taiwan and South Korea (too wedded to exports, shipping, electronics).

By contrast, and unless it falls into the trap of a Pakistan war, India will advance; none of its banks (so far) are on the Bear Stearns Cos. track. China will take hits, but that probably means an increase in economic growth of 5 percent or 6 percent, deriving more from domestic development, and less from cheap exports.

Europe's prospects for 2009 are mixed, which is simply another way of saying that here, too, there will be relative winners and losers. Norway will ride the storm on its still-massive currency reserve and the rest of Scandinavia has strength in depth -- unlike the less competitive economies of East and Central Europe. Germany's combination of ultra-high-quality production, superb infrastructure and financial caution (few Germans use credit cards: Americans, take note!) give it strengths that are lacking in the U.K., France, Italy, Spain, Greece and other European countries that fell for easy credit and large government deficits. Prussian fiscal rectitude will keep the euro high, and compound the dollar's weaknesses.

The biggest question concerns the United States. My instinct tells me it will lose ground in 2009. I simply don't see how the Treasury can print $1 trillion to cover deficit spending, offer those bills at very low interest rates, and expect foreigners (not Americans, because we don't have the savings) to buy them, persuading the world to keep afloat its greatest debtor since Phillip II of Spain. Why should sensible Chinese investors do that when they can buy Swiss bonds, gold, or Scottish real estate? Yet if Asians decline to buy tens of billions of Treasuries each month in 2009, U.S. interest rates will have to go up again.

So: India up, China up, Germany up (all relatively). The developing world down, Russia down, most of Europe and Japan down, and President Barack Obama's America down and down.

Are you Paul Kennedy? If not, then PLEASE use quote marks and attribute your posts to the proper source!

[Naam]

Brazil's currency is plummeting against the U.S. dollar.

Are you Paul Kennedy? If not, then PLEASE use quote marks and attribute your posts to the proper source!

and should you be Paul Kennedy please do some homework (in case you didn't know) and add that Brazil's currency strengthened an average of more 50% vs. the major currencies (including the US-Dollar) during the last seven years

[Khun Jean]

50% strengthening in 7 years is a great performance of steady growth. However a 33% weakening in just the last 5 months i would call 'plummeting', or as often is said 'off the cliff'.

Here is a graph:

http://ichart.finance.yahoo.com/5y?brlusd=x

[midas]

So: India down, China way down, Germany way down. The developing world down, Russia down, most of Europe and Japan down, and US up.

I do agree the yanks will pull the world out of this mess, like they always do.

Can you please say how the US will acheive this ?

They are up to their necks in debt, industries are closing

down and there doesnt seem to be any new innovation

on the horizon to get them out of their mess ?

[flying]

[

I do agree the yanks will pull the world out of this mess, like they always do.

Can you please say how the US will acheive this ?

Scary Thought

http://thehill.com/leading-the-news/rangel...2009-01-14.html

[toptuan]

I do agree the yanks will pull the world out of this mess, like they always do.

Can you please say how the US will acheive this ?

We'll invade something. Maybe the World Bank.

(Just fulfilling your expectations...)

Edited January 16, 2009 by toptuan

[flying]

I do agree the yanks will pull the world out of this mess, like they always do.

Can you please say how the US will acheive this ?

We'll invade something. Maybe the World Bank.

(Just fulfilling your expectations...)

You got your quotes all messed up....

britmaveric said that not midas

& midas said what you said I said.............Got it?

Edited January 16, 2009 by flying

[hhgz]

"when copied state where. press me"

What a hoot! The OP copied someone else's thoughts and used them as his own without attribution. That saves a lot of intellectual energy on his part.

[Bizz]

I do agree the yanks will pull the world out of this mess, like they always do.

Can you please say how the US will acheive this ?

We'll invade something. Maybe the World Bank.

(Just fulfilling your expectations...)

Gung ho yanks he he

"when copied state where. press me"

What a hoot! The OP copied someone else's thoughts and used them as his own without attribution. That saves a lot of intellectual energy on his part.

:rolleyes:And so did you but then again its cool to be kind.

[OlRedEyes]

"when copied state where. press me"

What a hoot! The OP copied someone else's thoughts and used them as his own without attribution. That saves a lot of intellectual energy on his part.

Reading the OP's copied piece, one has to wonder what intellectual energy you are on aboot?

[onnut]

I want to know what happened in 1989????

[Owain]

I really do not think it is as bad as everyone is saying. I believe it is a ploy by politicians to play it up so that when every thing gets back to normal sooner rather that later then they can turn around and say what a great job they did sorting it all out.

[mommysboy]

I really do not think it is as bad as everyone is saying. I believe it is a ploy by politicians to play it up so that when every thing gets back to normal sooner rather that later then they can turn around and say what a great job they did sorting it all out.

On the contrary, it's far worse. This week saw financial meltdown looming. Ireland is now on the verge of bankruptcy, US and UK could get there too. The thing is no one country will remain unaffected, Thailand which is so reliant on US will experience a disaterous slump.

The problem is the world's assets have just been vastly over-valued.

I guess the winners will be the countries that can maintain civil order.

[Naam]

50% strengthening in 7 years is a great performance of steady growth. However a 33% weakening in just the last 5 months i would call 'plummeting', or as often is said 'off the cliff'.

the fact remains that over a much longer period than 5 months BRL is up 50%. picking periods too short always distorts the picture and that goes for singling out BRL too. in that context one should e.g. look and compare how AUD, NZD, GBP and other currencies have fared vs. USD. the result is "not better than BRL!"

[mgjackson69]

Well, now that Obama is about to be sworn in, the US mainstream media is already putting out teaser stories about how "the economy" is improving. They will say it enough, and the sheeple will start believing it and start spending money...and guess what, the economy will improve...all thanks to Obama.

[flying]

Well, now that Obama is about to be sworn in, the US mainstream media is already putting out teaser stories about how "the economy" is improving. They will say it enough, and the sheeple will start believing it and start spending money...and guess what, the economy will improve...all thanks to Obama.

Yes but quite a few speakers on CNBC this morning said there is a problem with that.........The consumers have decided not to attend the party. Frugality has suddenly become en vogue. The consumers have started saving & buying/spending less & like how it feels.

I must admit I too have taken a look at my excess & tapered it back with more to come.

[hhgz]

"I want to know what happened in 1989????"

Me too. However, the article does mention it - but doesn't explain it - and the OP neither read not understood the article, so there you go.

Perhaps he's referring to Russia not being able to pay its debt, and the adherents of the Black-Scholes model lost one trillion US dollars (yes, that's "one" followed by 12 "zeros")...but that occurred after 1989.

[BEENTHEREDONETHAT]

They need money in order to start spending and at this point many have no money and the banks aren't loaning, unless you can prove you don't need it.

Giving more money to the banks is not providing the average person any more money to spend.

[flying]

They need money in order to start spending and at this point many have no money and the banks aren't loaning, unless you can prove you don't need it.

Giving more money to the banks is not providing the average person any more money to spend.

Makes your head spin doesn't it? Does mine

They give the money to banks to relieve supposed toxic debt & to *loan* to us. But isnt that the money we just loaned them? Will we not be asked to pay for that later with taxes? The same taxes that gave that fiat currency any power at all.

[mgjackson69]

Well, now that Obama is about to be sworn in, the US mainstream media is already putting out teaser stories about how "the economy" is improving. They will say it enough, and the sheeple will start believing it and start spending money...and guess what, the economy will improve...all thanks to Obama.

Yes but quite a few speakers on CNBC this morning said there is a problem with that.........The consumers have decided not to attend the party. Frugality has suddenly become en vogue. The consumers have started saving & buying/spending less & like how it feels.

I must admit I too have taken a look at my excess & tapered it back with more to come.

Yes...we, being only flawed humans, sometimes need a kick in the pants to make us re-evaluate how we are doing things. I believe that you are right, a lot of people have reset their priorities, some out of necessity, some as a precaution.

I believe that people will respond to enough good news by spending more. Granted, it likely will not go back to the levels of even a couple of years ago for quite some time.

[Naam]

"I want to know what happened in 1989????"

Me too. However, the article does mention it - but doesn't explain it - and the OP neither read not understood the article, so there you go.

Perhaps he's referring to Russia not being able to pay its debt, and the adherents of the Black-Scholes model lost one trillion US dollars (yes, that's "one" followed by 12 "zeros")...but that occurred after 1989.

Russia paid it's debts. the crisis when russian banks did not honour Ruble/Forex forwards was in august 1998. in the same year Russia defaulted on two bonds (IANs and PRINs) which were issued in lieu of soviet debt. the restructuring however turned out quite favourably for all investors. actual debt issued by the Russian Federation was always and without any delays serviced.

[toptuan]

You got your quotes all messed up....

britmaveric said that not midas

& midas said what you said I said.............Got it?

You mean you didn't say what I said you said?

Instead, the others said what they said,

but not what I said they said?

[flying]

You got your quotes all messed up....

britmaveric said that not midas

& midas said what you said I said.............Got it?

You mean you didn't say what I said you said?

Instead, the others said what they said,

but not what I said they said?

Now ya got right 3x

Dee Mak !

[CPH]

"I want to know what happened in 1989????"

Me too. However, the article does mention it - but doesn't explain it - and the OP neither read not understood the article, so there you go.

Perhaps he's referring to Russia not being able to pay its debt, and the adherents of the Black-Scholes model lost one trillion US dollars (yes, that's "one" followed by 12 "zeros")...but that occurred after 1989.

There was a recession in 1989 to 1992 due to incresing interest rates up to 1989.