Sunday, April 05, 2009

shift

G-20 came and went - resulting in 1 trillion dollars more money for IMF to rescue troubled little economies (read - Ukraine, Latvia and friends) and a major offensive against tax havens except Macau and Hong Kong.

What now?

One clear thing is that the US can no longer be the sole major consumer of world goods. The country needs its pitiful savings rates up, debt reduced and trade balances fixed. The US is running a 1.3 trillion dollar budget deficit each year - and if recent experience teach us - that can't be sustainable and if it breaks the US economy more that it already has right now, we'll be in a deeper trouble than the current shit hole we are in.






So some large economies are going to have to step up. China is an obvious candidate - India is a medium term hope - if we can fix Africa's economy, there will become a new market for world's goods; but that's a stretch.




To me there are two obvious possibilities:
  1. You get consumptions around the world goes up - which means improving the economic well being of poor people.
  2. The environmental sustainability aspect become more and more critical as we move forward because consumer consumptions reflects on energy consumption and pollution level.
This is why alternative energy research become the biggest challenge of this and next decades. If we want to save the world economy and make it sustainable and on the process not to destroy the earth, energy is where it's at.

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