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Top 10 Global Risks for 2014

EconMatters's picture


By EconMatters


With another new year upon us mortals, we thought it is time again to check out the top 10 global risks ranked by Oxford Analytica.  Not surprisingly, from a geographical perspective, a majority of the top global risks come from the Middle East region (at 40%) and the Asia-Pacific region, specifically China, and North Korea (at 30%).  U.S., Europe, and Russia round out the rest.



Source: Oxford Analytica


The ranking is mostly based on the potential size of global impact.  However, putting them under the lens of probability, a difference picture emerges (see graph below)


Chart Source: Oxford Analytica

While the economic related risks such as a sharp slowdown in China, EU disintegration, and deflation in the U.S may rein supreme in terms of global impact, the probability of them materializing is actually less likely than the geopolitical risk in the Middle East (Syria, Iran, Pakistan and Afghanistan), and Asia (China, North Korea).


In terms of the type of risk, seven out of the top 10 risks are geopolitical, while only three are financial or economic.  So if we look at probability from this perspective, we are more likely to see a war or regime topple before another financial crisis rippling through the world again.


Regarding the 'U.S. Deflationary Trap', the Fed said last month it would reduce its monthly asset purchases by $10 billion to $75 billion, while also expressed worries about inflation.  Meanwhile, Fed’s balance sheet has ballooned to $4 trillion, we seriously doubt the U.S. deflationary scenario after Fed's helicoptered five years worth of QEs.



At this point, we at EconMatters believe that the Federal Reserve removing the Liquidity Punchbowl not because everything is fixed with the US economy, and we have fully recovered from the financial crisis of 2007, but because they have no other choice in the matter given the obvious asset bubbles they have created in the credit, bond and equity markets.


For now, the inflationary effect from QEs is mostly trapped in the stock and commodity markets (i.e. enriching the 1%), but inevitably it will manifest and spill over to the consumer side of things hitting hard on the 99%.  The removal of this liquidity, the resultant implications for financial markets, and potential future inflationary consequence of Fed's QEs remain an under appreciated risk to the global economy in our humble opinion.


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Sun, 01/05/2014 - 11:59 | 4301663 beavertails
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1. What no assassinations (think Janet Yellen, not Obama) or

2. Major weather event (like all the world's ice breakers stuck in Antartica slowing down global shipping)

3. Natural disasters (Earthquake hitting the West Coast sending residents into Radioactive ocean waters)

4. 10 yr bond yields hitting 3.25% in Q1, forcing the Great UNTAPERING (US housing implodes as Consumer Confidence hits FATH)

5. Collapse of the Terrorist Saudi Regime (Russian Payback is a B*tch)

6. Paper gold defaults as Comex gold prices touch $850, the same price as FACEBOOK and TWITTER shares, The GLD  (Gold Lost DumbAss)

7. Brazil declares gold backed currency first and offers Passport and Amnesty to Snowden.  Snowden leaves Russia after competing as an Olympic Bobsled Athelete from Brazil.

8. $220 oil (see Saudi Arabia)

9. Western Hyperinflation (see GREAT UNTAPERING, and Peter Schiff was Right)

10. Zerohedge goes mainstreamed, freedom breaks out in USSA.


Sun, 01/05/2014 - 11:11 | 4301565 dizzyfingers
dizzyfingers's picture

TNTARG: as usual, when the subject can't be avoided any longer, authorities will report they are "surprised", same as when the economy crashed and kept crashing... and continues crashing for all but TPTB... But all will be well because they'll claim they have it covered.

Got KI?

Sun, 01/05/2014 - 10:56 | 4301524 TNTARG
TNTARG's picture

I guess "sharp slowdown in China" is more important than the f...ing radiation spreading around the World. Give me a break!

Some things are gonna slow down all right while other are rising and spiking fast indeed, and will keep rising and spiking.

CEO: Fukushima is very bad, we have a crew in Japan right now; Reports coming out that gov’t covered it up… food around whole region got irradiated, increased problems for people in Tokyo — Host: Really scares me I don’t hear anyone discussing how to stop it (VIDEO)


Sun, 01/05/2014 - 08:43 | 4301395 Ghordius
Ghordius's picture

"European Disintegration"

sounds...terrific. or terrifying. Does it actually *mean* something?

Like Greece leaving the eurozone, or the UK leaving the EU?

Sun, 01/05/2014 - 09:47 | 4301424 falak pema
falak pema's picture

Ghordius, I think he means when Rajoy says to Mutti : I don't want to Tango with you if you don't bail ME and Espana out again and again. Now that's a big mouthful even for Mutti.

"When the Teutons learn to Tango Europe will learn to dance Waltzing Matilda, Vienna style!"

Verdi, Strauss &  Wagner should make a good team. But somehow they don't seem to agree.

Soros is crying "crocodile tears" about Europe's cacaphonia. 


Sun, 01/05/2014 - 05:41 | 4301324 falak pema
falak pema's picture

good list.

But lacks defining fall out potential for house of DC... 

That is the linch pin of the current construct.

WHat consequence for the USD ...

Sun, 01/05/2014 - 04:02 | 4301274 Joenobody12
Joenobody12's picture

# 8 /. Japan Naval comflict. JApan is hell bent to return to the bad ole day prior to WWll. They want to grow a pair of balls after the US castrated them . They cannot pick on the US so they choose China.

#9  shoule be deleted from the list. Go talk to the Russians before making stupid prediction. The young people love him , not so much the older generation. The Russian look upon themselve as a victim of the communist era and wants Putin to make Russia great again. 

Sun, 01/05/2014 - 00:50 | 4301114 el Gallinazo
el Gallinazo's picture

The fact that this article didn't mention Fuckyoushima proves that the author is either an idiot or has an unpublished agenda.  The whole fucking Pacific ocean is DOA.  All the mammals that feed on Pacific sea life are dying from radiation sickness including the west coast of North America, especially the higher latitudes.  And the main plume is still 2-4 months off the west coast.  Japan is a dead man walking.  Is Japan, purportedly the world's third largest economy  a bigger player than Lehman was?  

The presstitute media goes on and on with this climate change NWO bullshit so they can take away our lightbulbs (I have a 20 year supply by the way), yet they choose to ignore the biggest calamity since the Permian Extinction, i.e. the last 252.28 million years.  I wonder whether General Electric designed that one also.  Jeez. They don't even know where the core to #3 went.  Perhaps it may pop up in Kansas City.  And #3 was running on MOX - read mixed plutonium oxide (for Japan's clandestine nuclear arsenal).  Airborn plutonium is the most deadly thing known to science.  We are fucked royally.  Put that in your portfolio.

Sun, 01/05/2014 - 04:11 | 4301278 Joenobody12
Joenobody12's picture

Alaska, Washington State, Oregan and California are all fucked. In addition, the ocean current goes from Japan towards South East Asia so all the sea food in that part of the world (Thailand, Phillipines, Vietnam etc ) is not edible. Not so sure about Australia and New Zealand I now eat seafood from Norway and Greenland. Seafood from the Baltic sea is OK too if you can get them.

Sat, 01/04/2014 - 22:11 | 4300840 steveo77
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If Carrington Events weren't enough, think about what would happen if an Asteroid exploded in air, or hit the earth.     In 2013 a planet killing Asteroid made a pass and the Egg Heads didn't even notice until a month later "hey what is that planet killing rock which is flying away from us now?"    Jeez, we deserve better.

I made cool spreadsheet that turns Asteroid Diameter into equivalent atomic bombs going off.     The one that missed us in 2013 would have been 4440 Atomic bombs.     What would that do towards having 440 nuclear power plants melting down.   If the asteroid wasn't an ELE the nuke plants would sure finish the job.

Free download, check it out.


Sun, 01/05/2014 - 00:59 | 4301124 el Gallinazo
el Gallinazo's picture

And when was the last "planet killing" asteroid collision (which didn't kill the planet but created a lot of discomfort for non-Rothschild reptiles)?  About 66 million years ago.  What are the odds that it will happen again in 2014?  As I pointed out above, Fukushima is the real life killer on this planet.  But not to worry.  Many single celled organism can adapt to this level of radiation, so  multicellular life can start over in a couple of million years.

Sun, 01/05/2014 - 00:02 | 4301049 BigDuke6
BigDuke6's picture

Even this idiotic point is more relevant than econmatters.

Sat, 01/04/2014 - 22:09 | 4300823 shovelhead
shovelhead's picture

If you like your Black Swan you can keep it.

Sat, 01/04/2014 - 21:37 | 4300748 SurlysonofaBitch
SurlysonofaBitch's picture

What about the 10-year going to 4, 5 or 6? Or the yen collapsing? 

Sun, 01/05/2014 - 00:43 | 4301106 Bunga Bunga
Bunga Bunga's picture

Interest marktes do not exist, rates a centrally planned = zero risk

Sun, 01/05/2014 - 00:45 | 4301103 HardlyZero
HardlyZero's picture

Now we're talking...the finance has been running the show since 2008.  No ca-ching, no way.

Liquidity is a bitch and Yellen will probably get clipped.   Watch the 10-year baloon.

Sat, 01/04/2014 - 21:20 | 4300725 Osmium
Osmium's picture

"At this point, we at EconMatters believe that the Federal Reserve removing the Liquidity Punchbowl not because everything is fixed with the US economy, and we have fully recovered from the financial crisis of 2007, but because they have no other choice in the matter given the obvious asset bubbles they have created in the credit, bond and equity markets."


Not sure I agree with that.  The FED did everything it could to create the housing bubble and did not seem to care about the ramifications of that. 

Sat, 01/04/2014 - 20:55 | 4300666 Vooter
Vooter's picture

What about Fukushima?

Sat, 01/04/2014 - 20:44 | 4300644 Musashi Miyamoto
Musashi Miyamoto's picture

By what methodology?

Sat, 01/04/2014 - 20:10 | 4300561 ebworthen
ebworthen's picture

A collapse in Pakistan is #1 because they have nukes, and so does India.

Sat, 01/04/2014 - 20:07 | 4300551 Loose Caboose
Loose Caboose's picture

All this pales in comparison to more trouble at Fukushima.  Not a direct hit to the world economy but without people, there is no global economy.  Just sayin'....

Sat, 01/04/2014 - 19:46 | 4300504 zipit
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Public twerking

Sun, 01/05/2014 - 00:43 | 4301105 HardlyZero
HardlyZero's picture

Its only a hot potato if Disney (TM) characters are involved.

Do NOT follow this link or you will be banned from the site!