5 ECONOMIC TRENDS FOR 2012
Via the Council on Foreign Relations:
Political Polarization and the U.S. Economy
The president, the entire House, and one-third of the Senate face reelection next year. The choice of a governing party, if one party gains control of both the White House and Congress, could have enormous consequences for the economy. The increasing partisan and ideological division between the two parties constitutes the single most important influence on future economic policymaking.
Global Volatility
The main trend in 2012 is volatility, with the preponderance of extreme macroeconomic risk on the downside. It is a two scenarios environment with roughly equal weight, with the center of global risk located in Europe.
China’s Rise Under Stress
History will note that 2012 marked China’s shift to a slower growth trajectory and the anointment of its “fifth generation” of leaders. This comes at a time when the country faces formidable internal and external challenges.
Shortage of AAA Assets
Blaming speculators and irresponsible creditors for the successive financial crises since 2007 is edifying and partly true, but the recent booms and busts might have more to do with the search for safe assets than with the search for risk.
A New Appetite for Risk
Accelerating financial market panic has, since late 2009, gradually pushed the euro towards the point where today an increasing number of observers openly question the survival of the common currency. During the crisis, it has been evident how the European political response has been reactive, timid, and first and foremost too slow, to successfully restore confidence.
Source: CFR
“During the crisis, it has been evident how the European political response has been reactive, timid, and first and foremost too slow, to successfully restore confidence.”
Aha! Thats why the Euro trades much above parity to the dollar LOL!
i would be mincing my words alittle more dr. oliver…you have ’12 to get thru….merkozy’s only response will be bail n print or collapse……it’s just their turn on the debt/credit bubble of the last 40 years……and US turn comes around again too….this ain’t over by a long shot.
a depressionary/deleveraging cycle is NO time to get austerity religon but it is the only time you CAN get it…..what? the politicians are going to get debt under control when everyone’s flying on ZIRP grain alcohol and GDP is 3%….not happening….homo sapiens are wayyy too prone to expoit any possible short term oppurtunity than than …..even reagan, gingrich and both bushes’ couldn’t do that.
the next US president will be remembered as the worst in history mainly by being in the wrong place at the wrong time….but short of ron paul they ALL deserve it.
but i can only hope it’s obozo.
Boatman wrote: “it’s just their turn on the debt/credit bubble of the last 40 years”
Agreed!
But such a bubble cannot be removed over the weekend. Therefore critique that political reactions are to slow are funny.
And tell me, which larger economy in the western world had a proactive treatement of its debt as soon as it had substantial amounts of debt. Well Spain to some extend …
Nevertheless the Euro far above its starting point 10 years ago.
Dear Oliver I’ve appreciated your comments… really ! The markets want 1) less debt NOW 2) more growth NOW 3) regulations NEVER 4) controls NADA, ZERO, NIL. But they are perfect, they are always right, aren’t they ? And public debt is awful, is terrible, all that money used for hospitals or electrical networks and… welfare, just horrible !!! Private debt instead is good and the balance sheets of the TBTF banks full of crap are MUCH better than the balance sheet of 2000 years old countries. Nice view. And of course the role of dirty speculation is negligible, it’s even useful, isn’t it ? Let people like Kyle Bass be our new saints !
… hopefully sooner or later all these sharks will be sent back in the black hole from where they came from.
Something useful to remember…
“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.”
Franklin D. Roosevelt