Comments on: What’s Ahead for the Global Economy in 2007?

By: Jan Paul Burr

Jan Paul Burr — Thu, 25 Jan 2007 23:07:34 +0000

If Congress passes legislation to authorize 100 million immigrants, what will the effect on housing be? They will rent but from whom. Will the 78 million retiring rent the old home and buy a new one?

Also, the dollar (dollar hegemony as written about by Rep. Ron Paul of Tx) being tied to sale of oil in dollars could cause a collapse of the dollar if Iran and Venezuela sell in Euros as they claim they will and Russia and others join them, won't it?

China and India now have gone from about zero middle-class to 500 million or over 200 million more than our entire population. How much would that counter a recession here in consumption of Chinese goods. Malaysia, Korea, Vietnam, etc. are all increasing consumption of Chinese goods aren't they? How big a drag are we on the world market compared to just 5 years ago?

Wish I knew the answers to all those questions. I could probably get rich if I did. This is going to be a "bumpy ride" this year, I fear.

By: Rod Campbell-Ross

Rod Campbell-Ross — Fri, 19 Jan 2007 07:45:46 +0000

Malthusian outcome?

Maybe he will be proved right.

Human ingenuity? There are three problems that have never been overcome:

1 Scalability in volume
2 Scalability in time
3 Energy balance. Humans CANNOT alter the laws of thermodynamics.

Neither will humans change geology. We await our fate in blissful ignorance.

Mathusian? What a stupid comment.

By: Ken Dar

Ken Dar — Fri, 19 Jan 2007 03:09:12 +0000

Not Jo Kin:

You'd think that but you're forgetting about risk premiums. Right now the idea of a risk premium is just laughable. Pretty soon, though, when foreclosures and other nasty things start happening, then lenders (and investors ultimately) will demand higher rates to cover any potential losses. Also, the numbers of lenders that are going belly up seems to be increasing dramatically and this will dry up the liquidity pool. What we are about to witness is basically a credit crunch and rates will indeed be higher as a result. The Fed may try to lower rates to stave off the RE disaster but it won't work as demand for new loans will be low and the number of banks willing to lend will be a lot less.

By: Not Jo Kin

Not Jo Kin — Thu, 18 Jan 2007 19:37:32 +0000

Dunno why cheaper housing implies rise in interest rates. You'd think that a combination of lower number of mortgages and the Fed juicing the economy would result in *lower* interest rates.

By: Breck

Breck — Thu, 18 Jan 2007 15:57:33 +0000

What did he say about gold and silver? I don't see their mention anywhere, except once as "precious metals" as commodities? So gold and silver lower too?

By: Fred Jones

Fred Jones — Thu, 18 Jan 2007 01:05:04 +0000

The Fed is almost certain to fight both inflation and deflation, but there is a limit to what it can do about the latter. The big variable is thus fiscal policy. Does Congress step in and fight deflation with $2 trillion budget deficits? If so, then deflation is unlikely. Predictions of deflation are thus political predictions at heart--even more unreliable than economic predictions.

By: Jo Kin

Jo Kin — Wed, 17 Jan 2007 19:58:58 +0000

The great theme here is: housing is becoming cheaper in 2007 (the rest follows: lack of money; rise in interest rates; fall in commodities; fall in imports; fall in chinese economy; fall everywhere; dollar becomes stronger, etc.)
In Brazil, however, due to the decline in interest rates, we expect a great year for housing market.

By: J. Crozier

J. Crozier — Wed, 17 Jan 2007 05:06:42 +0000

The major problem in the world financial perspective is the yuan set at a fixed rate of exchange to the $US and Euro. By allowing the yuan to float real estate prices in China will skyrocket while reciepts from foriegn exchange will plummet, causing a severe recession for Beijing to deal with.
Beijing's problem is trying to find a way to find true valuation for its capital assets before the industrial nations decide to impliment trade policies that work against China's economic strategies.