FW: Perspectives on where we are headed

[Karen Watters Cole]

Or more bits of news that may add up to something: Oil Powers Expect Rise In Demand Environmentalists Speak Out at Summit RIO DE JANEIRO, Sept. 4 -- Worldwide demand for energy will soar in the next 50 years because of population growth and present challenges for the global oil industry, industry leaders gathered at the World Petroleum Congress agreed. But they and environmental groups at the conference differed on where those challenges lie. …"Close to 75 percent of the world's oil reserves lie in just seven countries and more than two-thirds are controlled by national oil companies, with limited access for international companies," O'Reilly said. …With oil and natural gas supplying 90 percent of energy needs worldwide, the conference debate focused on better ways to provide consumers with cheap, reliable energy, particularly to the third of the global population said to be in "energy poverty." …"We can safely forecast that world oil demand will increase from the present level of 76 million barrels per day to over 91 million barrels a day in 2010," said Rodriguez, whose country has the biggest oil fields outside the Middle East. http://www.washingtonpost.com/wp-dyn/articles/A37918-2002Sep4.html Samuelson: Deflation: The Global Economy’s Downside @ http://www.washingtonpost.com/wp-dyn/articles/A34846-2002Sep3.html Excerpt: “Globalization has run afoul of two obstacles.  One is culture, which often defeats economics.  Corruption pervades many poor countries.  Even in Asia, "crony capitalism" contributed to the financial crisis of 1997-98.  Vast amounts of investment capital, channeled to favored clients, were wasted. (Even in the United States, as recent scandals attest, capital is often wasted.)  There are other enemies.  In Africa, Botswana was a rare example of economic progress.  Its gains are now receding before a 36 percent rate of HIV infection among adults, reports the Wall Street Journal. But globalization's second problem may now be more pressing.  It is potential instability.  Terrorism and oil disruptions pose obvious threats.  But there is another large and less-noted vulnerability.  In the 1990s, the robust U.S. economy supported the world economy.  American consumers gorged on imports: shoes, computer chips, toys.  From 1997 to 2001, U.S. trade deficits totaled almost $1.7 trillion.  Now, the American economic slowdown leaves a vacuum that could go unfilled.   … At worst, the result is classic deflation with political ill effects: more economic nationalism and protectionism.  Globalization means that for more products and industries, the law of supply and demand has gone international. … The truth is that the world economy has become overly dependent on the United States and its mushrooming trade deficits, which are "unsustainable," say O'Neill and Dudley.  To promote more balanced global growth, they suggest that: • The United States abandon its "strong dollar" policy and allow -- or prod -- the dollar's exchange rate to decline by 15 percent to 20 percent, helping U.S. exports and discouraging imports. • The European Central Bank cut interest rates by 1 percentage point (the key rate is now 3.25 percent), and Japan and Europe increase government budget deficits. • China allow its currency -- the yuan -- to float upward against the dollar, encouraging more imports and discouraging exports.”