Mercury, you made a question one moth ago that I promised to answer. It was more or less, how will be 2009 in economic terms?
We know one thing. It will not reach its bottom in the first 6 to 9 months of 2009, it is mathematically impossible. It does not mean that it will rebound in the last quarter calendar year, it means that most economists do not know when the bottom will be reached. Both optimistic and pessimistic predictions are rather based on wishes than in facts or in serious studies. I have to say that, sometimes, the future is unpredictable because the present is not real, not based on facts. It is happening nowadays. Nowadays, the price of oil is not a market price, that price is a consequence of international politic decissions. Energy has strong influence on all commodities and therefore on inflation, trade, growth, etc. Also, since the G20 meeting, most developed countries are changing their economic policies and strategies. For example USA. Financial policies such as interest rate management, liquidity, etc. are being balanced step by step by economic policies such as infraestructure development, cheap houses, direct subsidies to lower economic classes, promotion of durable goods, etc. The developed Western world has started to get rid of the the sequels of monetarism. Yet it has not found a model that can fit into their economies. They dig on Keynes again, they create replicas of the Chinese plan, they innovate, etc. therefore we do not how that mix will work for them. Lot of uncertainities. For economies, uncertainity is ugly, it prevents trade and development. Furthermore, I have to say that when we mean rebound it is not a rebound in order to reach the bright economies of some years or decades ago. It is just a temporary recovery, another recession will follow that temporary recovery. Let me explain why. The world is always moving ahead. One example, in 1950 millions of miles of road were a bright idea, because cheap oil helped trade, it created wealth, etc. Thousands of building with primitive heating systems was a bright idea because coal was cheap, coal fueled factories were bright and cheap, etc. Those roads, buildings, factories, etc. are now obsolete compared with modern railways, buildings, cities, etc. Obsolete in terms of wellbeing and in terms of competitiveness. Some economies relaxed themselves and did not refurbish their structures, their means, their management and politic styes, etc. because "it worked until now". Now, in order to reshape them according to 21st century, it will not be easy, they will have to refurbish in few years what others did in decades. That is painful and expensive, but there is no option if they want to find a place under the heaven in this century. Even some countries, including very relevant economists, have to find how the real world of this century works, they have to accept it and then they have to reshape themselves according to it. To me, sadly, they seem to be looking yet for answers to the question "why this happened?", and to find the answers is just the first step of a long, expensive and painful road. Conclusion. The first 6 to 9 months of 2009 will not see the bottom of this crisis. When that bottom will be reached? Nobody knows. But once it will be reached and a temporary relief gained, another crisis awaits in some developed countries. Peace and best wishes. Xi --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
