Latin America prepares for economic downturn
Washington, DC, United States (AHN) – Latin American finance ministers are trying to shield their countries from disaster amid predictions U.S. government budget cutbacks could hurt the region’s economies.
Economic ministers from the 11-nation Unasur organization met last week in Buenos Aires, Argentina, to discuss defensive strategies. They are working on an agreement that would create a roughly $12 billion emergency fund to bail out collapsing economies.
They also seek to reduce their dependence on the U.S. dollar for international trade and to develop policies to balance their trade deficits.
Unasur consists of Brazil, Colombia, Bolivia, Chile, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela.
So far, Latin America’s economy has avoided the worst of the economic collapses in the United States and Europe that began in 2008 with a stock market collapse and recession. A brief drop in commodities prices along with government spending programs that shored up declining industries helped them avoid the worst of the crisis. However, economists predict the resilience of Latin American economies will not last much longer.
South American economies grew at an average of 6.6 percent last year, according to the International Monetary Fund.The Fund’s economists predict growth will slow to 4.7 percent this year and 4.1 percent in 2012.
By comparison, U.S. economic growth this year is running at 2 percent. Some European countries are showing no growth.
Stock markets in Latin American countries fell as much as 15 percent last week on news the credit rating service Standard & Poor’s downgraded the U.S. credit rating to double-A plus from triple-A.
Augusto de la Torre, the World Bank’s chief economist for Latin America and the Caribbean, said this week the outlook for Latin America is uncertain as concerns grow about another crisis for the United States and Europe.
China could be the next to falter as Western markets dry up for their manufactured products, he said.
“If China has a hard landing, that will hit us hard,” de la Torre told the Peruvian news media during an economic meeting.
Unasur leaders are exploring options to increase trade with China as its Western markets for manufactured products fizzle.
Protecting the economy is a major campaign issue in Argentina, where current president Cristina Fernandez won a landslide victory in primary elections this week.
She said at a press conference after the primaries that keeping Argentina’s economy strong would be a top priority for her if she is re-elected in October.
Low-income persons are most likely to be hurt by U.S. budget cuts that could reverberate around the world, including Argentina, she said.
Wall Street economists warn that her policies of price controls and using central bank reserves to pay debts could backfire for South America’s third largest economy.
The policies strengthen government control but depress market forces that help to balance the economy, according to some economists.
Argentina’s inflation rate is running close to 25 percent.
Other economic concerns are arising in Brazil, where inexpensive imported products are hurting the domestic manufacturing industry.
Chile and Peru still have stable economies as investors try to protect their assets by purchasing gold and copper, but economists predict declines in the precious metals market.
A decrease in demand for oil is depressing the economies of Venezuela and Mexico.
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Wealth of worlds’ millionaires calculated to rise to $202 trillion by 2020
New York, NY, United States (AHN) – Financial analysts from service company Deloitte say the total wealth among millionaire households could more than double over the next decade in 25 major economies. Their wealth now calculated at nearly $92 trillion could rise to a staggering $202 trillion in 2020.
According to the study, the United States and Europe will continue to have the greatest concentrations of wealth, despite emerging markets closing in. The findings also highlight that numerous opportunities for growth in local markets across the country still remain.
“We wanted to go beyond some existing wealth management statistics by looking both into the future and across the globe to forecast how wealth among millionaire households might evolve,” says Andrew Freeman, executive director of the Deloitte Center for Financial Services. “Identifying and understanding how different market segments are changing can help formulate growth strategies.”
Freeman adds, “Which countries may offer the most promising future and how wealth managers can potentially increase profitability in the next decade are important questions for a wide range of financial institutions.”
Some of the other findings in the report include China continuing to be the driving force in the growth of millionaire wealth, followed by Brazil and Russia. Of the 25 countries examined in this study, China and South Korea will join the top 10 countries in terms of the total number of millionaires by 2020.
Millionaire households in the U.S. could reach $87 trillion in 2020, up from $39 trillion in 2011.
Among the forecasts for each of the 50 U.S. states, California is expected to remain the state with the wealthiest households, while New Jersey will continue to have the greatest density of millionaire households. The East Coast could see the highest growth rates with New York and Florida adding 1.5 million new millionaire households by 2020.
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Higher commodity prices for food and fuel a fact for the future
New York, NY, United States (AHN) – Soaring commodity prices are wreaking havoc on consumer’s budgets here in the U.S., but experts say not to expect them to go down because the culprit is increased global demand for food and fuel.
Increased demand from population growth in developing nations is not only causing prices to increase but it is also causing a scarcity of resources, according to Jeremy Grantham, who helped found Boston-based GMO asset management firm.
Grantham says that population growth and the rise of India, China and Brazil have caused a shift in balance in the world that has resulted in increasing prices for food, energy and metals.
Those factors are contributing to soaring global prices for those commodities. Although some people have blamed speculation in commodity markets or the fiscal policies of some governments or central banks, population growth is also a driving force in pushing prices upward. That means that if even commodity markets crash, prices will not stay far down for long, Grantham says.
Grantham notes that in the past century commodity prices declined by 70 percent because of economies that were achieved in using materials more efficiently or substituting materials. However, he said that trend is reversing as we reached the end of being able to achieve efficiencies at a time when the world population was growing.
In addition to global population growth, people in developing nations are earning more and consuming more as a result.
In his April 2011 newsletter, Grantham warned that it was “time to wake up” because “the days of abundant resources and falling prices are over forever.”
“The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value,” Grantham wrote. “We all need to adjust our behavior to this new environment. It would help if we did it quickly.”
Grantham summarized the problem:
- Until about 1800, our species had no safety margin and lived, like other animals, up to the limit of the food supply, ebbing and flowing in population.
- From about 1800 on the use of hydrocarbons allowed for an explosion in energy use, in food supply, and, through the creation of surpluses, a dramatic increase in wealth and scientific c progress.
- Since 1800, the population has surged from 800 million to 7 billion, on its way to an estimated 8 billion, at minimum.
- The rise in population, the ten-fold increase in wealth in developed countries, and the current explosive growth in developing countries have eaten rapidly into our finite resources of hydrocarbons and metals, fertilizer, available land and water.
- Now, despite a massive increase in fertilizer use, the growth in crop yields per acre has declined from 3.5% in the 1960s to 1.2% today. There is little productive new land to bring on and, as people get richer, they eat more grain-intensive meat. Because the population continues to grow at over 1%, there is little safety margin.
- The problems of compounding growth in the face of finite resources are not easily understood by optimistic, short-term-oriented, and relatively innumerate humans (especially the political variety).
- The fact is that no compound growth is sustainable. If we maintain our desperate focus on growth, we will run out of everything and crash. We must substitute qualitative growth for quantitative growth.
- But Mrs. Market is helping, and right now she is sending us the Mother of all price signals. The prices of all important commodities except oil declined for 100 years until 2002, by an average of 70%. From 2002 until now, this entire decline was erased by a bigger price surge than occurred during World War II.
- Statistically, most commodities are now so far away from their former downward trend that it makes it very probable that the old trend has changed – that there is in fact a Paradigm Shift – perhaps the most important economic event since the Industrial Revolution.
- Climate change is associated with weather instability, but the last year was exceptionally bad. Near term it will surely get less bad.
- Excellent long-term investment opportunities in resources and resource efficiency are compromised by the high chance of an improvement in weather next year and by the possibility that China may stumble.
- From now on, price pressure and shortages of resources will be a permanent feature of our lives. This will increasingly slow down the growth rate of the developed and developing world and put a severe burden on poor countries.
- We all need to develop serious resource plans, particularly energy policies. There is little time to waste.
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Shift north helps Brazil cut coffee harvest swings
A plantation migration lies behind a reduction in frost damage to Brazil’s coffee crop, the world’s biggest, a leading analyst says
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Death toll reaches 500+ in Brazil flooding and mudslide disaster
Rio de Janiero, Brazil (AHN) – The death toll from massive flooding and landslides in Brazil has risen to over 500 on Friday. Continued rainfall in the region is complicated the efforts by rescue teams to search for the missing or rescue survivors trapped in isolated areas.
Poorer rural residents have bore the brunt of the tragedy as many resided in houses built in risky areas, often without formal planning permission.
Rivers of mud tore ripped through towns in the mountainous Serrana region outside Rio de Janeiro, flattening homes, tossing cars like toys and forcing thousands to flee.
Over 13,000 people in the region have been forced to seek shelter and with more rain on the forecast the situation doesn’t look good.
“The rain did not stop at dawn and is continuing in the morning, which is making the rescue efforts more difficult,” said Lieutenant Rubens Placido, a fireman in the hard-hit town of Nova Friburgo. “The number of deaths is going to rise quite a bit. There are still a lot of people buried.”
Authorities have so far said 529 people have been killed in flooding so far. However rescuers are still pulling victims who were buried in their homes as the wall of mud and water buried them alive in their homes as they slept. Ordinary citizens wearing masks and gloves have taken up the task of digging for those still missing and trying to clear debris.
The disaster is being described by some who lived through it as a tsunami that fell from the sky.
Emergency teams have been forced to reach the heaviest hit areas on foot and are digging through the rubble by hand. Vehicles and heavy equipment are unable to traverse roads that are blocked.
Officials are worried that the spread of diseases could result in even more deaths
President Dilma Rousseff who travelled to the area has promised a shipment of essential medicines. Rousseff described the incident many are calling the worst natural disaster in Brazil’s history as an act of God. However she also was incensed over the illegal construction which is blamed for many of the deaths.
“We saw areas in which mountains untouched by men dissolved. But we also saw areas in which illegal occupation caused damage to the health and lives of people.”
The towns worst affected are Nova Friburgo, Teresopolis and Petropolis in the Serrana region. Despite the risks thousands of families are still living on the region’s picturesque mountain slopes or on riverbanks in the face of being washed away.
In the wake of the disaster reports of looting have surfaced prompting the state of Rio de Janeiro sent military police to maintain order in the area.
In other parts of the region nearly 200 graves have been dug for the numerous funerals held yesterday and do dug and dozens more scheduled for today.
The brunt of the tragedy has been borne by poorer rural residents in houses built in risky areas, often without formal planning permission.
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Report: U.S., China, India Top Most Power Nations
New Delhi, India (AHN) – A significant American report on global governance has described India as the “third most powerful nation” in the world, after the U.S. and China. The report also predicted that India will continue to strengthen by 2025.
The report compiles a list of the world’s most powerful countries and regions, titled “Global Governance 2025,” which is a follow-up to a similar 2008 report. The Global Governance report was jointly published by the National Intelligence Council (NIC) and the European Union’s Institute for Security Studies (EUISS).
In the year 2010, the report says America dominates with much as 22 percent of the world’s power, while China wields 12 percent.
India tied for third place with the European Union at 8 percent. However, since EU is a bloc of countries, India remained the third most powerful individual country in the world.
According to the international futures model, over the next decade and a half China, India and Brazil will increase their share of the global power. The U.S. will remain the powerful country by 2025, although its share in the global power is projected to fall to 18 percent.
The report was prepared using the insights provided by a group of international experts who gave their views on fictionalized scenarios that spanned the upcoming 15 years.
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Online Futures Trading For Novices
Futures trading, like any lucrative earning opportunity, involves high risks. Online futures trading is no different – its convenience tempts many people to treat trading like a Vegas casino instead of a legitimate investing opportunity. With this in mind, following are some pointers on succeeding in the online futures trading jungle:
Are you a long-term investor or a day trader? If you decide you’re a day trader, then keep up with your trading account on an hourly basis. If you decide you’re a long-term investor, then it is important that you resist the urge to check your account every hour or even every day, because short-term trends that are useless for your purposes may tempt you to trade when it is unnecessary or even harmful to your long-term interests.
Don’t gamble with grocery money. Decide how much money you are willing to put on the table in advance, and stick with this budget no matter how fast you lose it. If you don’t, online futures trading will become a vice that will put you on the street in no time. And if you’re a beginner, stay away from highly fluctuating markets – you might want to consider starting with mini-futures.
Quit while you’re still ahead. Nobody likes to sell after a good run, but in this game you should sell off a good run as soon as you spy a negative trend. If you don’t then your new trading profits can grow wings and fly like a bird. Of course you run the risk of the “left behind blues” if your former acquisitions continue to appreciate. Getting out while you’re still ahead is particularly important for day traders. The long-term investor needs to be concerned with weekly and monthly trends, not short-term peaks and valleys (unless, for example, you’re trading coffee futures and there’s a coup d’etat in Brazil).
Keep a good attitude. If you’re a beginner, you will probably lose the futures trading game at first. Think of it as tuition.
The Future Trading website offers information about all types of futures trading. Please bookmark “Future Trading”!
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