World Economic News (Thu 17th. March ’11)

US – Macro, Import prices, margins, fraudclosures, Bahrain, Syria, Dubai, China, Japan, the world.

Links – 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.


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  • Anonymous

    Link nine is a fine article Nick.

    Japan, for different reasons, seem to have faced a couple of problems before the rest of the world….

    I have noticed that their economic problems arose before the rest of the developed nations, and was to become the “Lost decade”…
    The rest of the world followed shortly afterward, and made similar choices to get the economy going again….

    Now Japan faces a serious energy crisis….
    Maybe there is a bit of foresight to be had, as an indication of the direction life after “peak energy” will take…??

    It has to be noted, peak energy is coming to us all, as did the problems of economic slow down, credit collapse and aging populations…
    Japan seems to have the task of facing all of these issues at the same time, and probably so will the rest of the western world….
    So maybe we should be keeping a keen eye on events in Japan, lessons could be learnt…???

    • Japan went big into being a Social Security Society after WW2………that could be one of the underlying reasons~?
      (they were the first to `go soft`)

      • Anonymous


        Graph one shows Gov’t spending negative in 2000 and 2001….

        The US Gov ran a budget surplus in these 2 years…???

        • Yes, I think they probably did.

  • Stevo

    Says on Wiki about Saudi Arabia

    Legislature: None – legislation by royal decree.
    Government: Islamic absolute monarchy
    Law system: Shariah Law

    In 1932 the two kingdoms of Hejaz(West) and Nejd(East) were united. The monarchs come from the Nejd line of monarchs. King Abdullah has been the boss since 2005. Most of the 27 million population live in the Hejaz area along the Red Sea where Jeddha and Mecca lie. 7,000 members of the royal family govern the country. Women are treated as children. No other religions than Islam allowed. Alcohol banned.

    Sounds just like your kind of country Nick.

    • I have been there…..and generally worked a lot for Saudis.
      It has to be understood how long `the west` took to be `civilized`………and that the Saudis and their `brothers` have no intention of being `civilized`…….It is just not, for the moment, in their nature.

      • Nwalt2

        I appreciate your realistic assessment of the middle east. So many who understand peak oil take a left wing approach to the Arab penninsula and islam in general. That is why so many in the US media think that Egypt could form a democracy along western lines. This shows an abysmal understanding of the culture and religion of the region. In kuwait the monarch there set up a parlimentary system similar to UK. He gave women the right to vote. Shortly after this in a nationwide referendum with women voteing, they voted out the right of women to vote. LMAO.

      • Stevo

        Not Royal Saudi Shipping Lines by any chance?

        • No. Assorted stuff.
          The impression I got, was that they were going to have some fun while it all lasted, but were quite prepared to go back to the dessert. Fatalistic, or just not believing that it was all quite real.
          Maybe the third generation will start to get a grip of things, but I doubt it.
          No, I think `fatalistic` was the best description.
          Allah will decide what is to be.

  • Anonymous

    Yes, I appreciate the articles under links 9&10.

  • Stevo
  • Kestrel

    Borrowing for education is backed by the government in th US, much like the housing is. So you could make that an extentinsion of government spending. You could as well disect the business spending / borrowing to determine if it is based on small business loans and incentives that would also be government spending.

  • Kestrel

    With the deployment of Saudi troops in Bahrain the problem just became more complex. It has now overtly moved from a so called democracy movement to — just as you say — a religious and tribal conflict. It is much more likely to spread as the Saudi actions will now fan the flames of the old tribal and religious divides.

  • Anonymous

    If an Earthquake strikes along the Western Coast of the US, it is likely that it will not only shake the land but it will shake the entire system, all the way to Wall Street.

  • Motamouse

    The chart above is excellent.

    1. It clearly shows we have been in a deflationary depression for just over 3 years.

    2.Deceleration in the rate of change of private debt has effected a growth in GDP?

    3. Exponential private debt hit saturation point in 2007, this has been replaced by public debt which is now on an exponential path.

    4. All Governments are now committed to reducing the size of the red bars, this will have the effect of increasing the size of the blue bars into negative territory. We can see from the chart up to 2007 that a reduction in red bars will be disproportinate to an increase in the blue bars ie a centimetre reduction in red bars will lead to an 2 centimetre increase in the blue bars.

    5. This is a great chart for showing how a reduction in public debt to reduce debt/GDP ratios will actually lead to an increase in debt/GDP ratios and ultimately the governments inability to pay back bond holders .The bond holders in turn will require a much higher risk premium and higher risk premiums mean much higher interest rates, which in turn lead to further growth of the blue bars into negative territory and so on.

    6. We are facing an intense deflationary spiral.