There is a lot of interesting information to look at. The spooks have
been updating the info for 2010. Some of the year over year comparisons
are interesting. In its intro to the Global Economy they had the
following to say. I think they summed things up pretty well:
The fiscal stimulus packages put in place in 2009-10 required most countries to run budget deficits - government balances have deteriorated for 14 out of every 15 countries. Treasuries issued new public debt - totaling $5.5 trillion since 2008
- to pay for the additional expenditures. To keep interest rates low,
many central banks monetized that debt, injecting large sums of money
into the economies. As economic activity picks up, central banks will face the difficult task of containing inflation without raising interest rates so high they snuff out further growth.
Some individual statistics to consider:
World GDP up 4.6% to 74.4 trillion (3.2T YoY). (Man, that is a lot of
zeros.) The US is 20% of total GDP. It contributed only 14% of the total
growth. Just a bit more evidence the US economic clout is on the wane.
Public debt is on the rise. It looks like a small increase. From 56.2%
to 58.3% of GDP. Only 2.1%. That doesn’t seem like a big change, right?
But look at the implications. Total PSD rises by 3.4T while global GDP
rises by only 3.2T. This means that it takes $1.06 of new debt to create
$1 of growth. What better evidence do you need that what we are doing
is unsustainable?
This is equivalent to M1 and M3. Note that they are rising at 7 and 11%
respectively. Money is growing at twice the rate of GDP. If you wanted
(another) reason to buy PMs this is it.
Domestic credit increases by $10 Trillion (10%) in just one year! Total
credit is rising at a rate of 3Xs that of real GDP. Guys like Krugman
will tell you that this is a good thing. To me it is a sign that
hyperinflation can’t be very far off.
1.4T brls. of oil. That’s a lot of oil. Of interest, the CIA had an
estimate in 2004 for this number of 1.3T. So as much as we use, they
keep finding more. The globe is currently burning up about 85mm brls a
day. That suggests we have 45 more years at current consumption. Heaven
help us if they did not keep finding the stuff as fast as we are using
it. Oil would be $200 in a short period of time.
Where is all this oil? The CIA has a link
for that. The US has 19b of those reserves. But we use 20mm brls a day.
So the US reserve/consumption is only 2.6 years. Talk about a strategic
weakness.
At the moment the global reserves are worth $130 trillion (2Xs all
stocks!). With that number in mind you can expect folks to be punching
holes in the ground for a long time to come.
Most of this oil is with our “friends” in the Middle East:
Saudi……..264b
Kuwait…...104b
Iraq………115b
Bahrain…..124b
Other places where there is lots of oil?
Libya………47b
Angola….…20b
Iran…….…137b
Nigeria….....37b
Venezuela.....98b
But look at these deals. China “owns” all that oil:
A bright spot for the US is Canada. They are sitting on 175b of
reserves. It’s probably not a good decade to short the Loonie. Possibly
the US should just go ahead and invade Canada. On the flip side we
should leave Mexico alone. They have just 12b barrels left.
Total exports are up YoY by $2.5T. An increase of 20%. That is your
evidence of a global recovery. The US is sharing in that increase. US
exports rose from 1.07t to 1.27t, so America matched the global growth
rate. Does this mean that if the rest of the world slows down the US is
going to get hit hard? Yes it does.
I found this interesting. More than one-third of the global population
are farmers. But they only produce 6% of GDP. Conclusion(s)? We have
inefficient farmers all over the world. Food prices are going up looking
at this.
One more slide. This one is not updated for 2010
I will estimate that the 2010 number is $55 T, or an increase of $6T.
GDP rose by only $3.2T. Equities grew by twice that of top line trade.
This, no doubt, proves Bernanke’s master plan. Make stocks go higher and
it boosts total production. But this is a two way street we are playing
on. While it is true that when stocks go up GDP rises. It is also very
true that when equities fall, GDP slumps. The fate of the global economy
is at risk to the stock market. How much more fragile could we get?
Just after holiday retail season 2012.
So I'd have to agree with the 2013 figure.
If you agree with 2013, how high would you guess oil would be by year end 2013? 200,300 a barrel?
2014. This will percolate for awhile. Alot of downward pressure is in place now (especially housing + govvie austerity worldwide). When that starts to ease, look out! It will happen fast. Maybe we will see the day where direct deposit is gone, because people will cash their checks and spend it the same day so as not to lose purchasing power.
I agree, I'm guessing as soon as late 2012-2015
My guess is late 2012 or early 2013. It will catch almost everybody off guard and I would guess it would hit sooner than most of us would suspect. Time tells all.
Great, trying to get as many different opinions as I can. I suspect we will add 2.1t to the debt this year and 2.5t next year. This will really set the table for tremendous inflation in a couple of years.
Avoid the rush and start withdrawing your cash the day it's available from your paycheck now. It's a habit that will pay off huge the month everyone else decides to do it alongside you and you ALL get fucked.
At least you'll have the cash you yanked out beforehand. Don't try to time the collapse.