The Indian political class is amongst the most brazen and hence they leave no stone unturned to say India is going to come out stronger than ever... I shall not for this article dwell on how flawed this theory is but would just say the safe money would flow opposite to the political theory...
Someone recently said that the world leaders have good reason to hide the problems with the banking and monetary system... heck the real info would send the world down the tube in a hurry yet as an economist their actions offer no real solutions...
In India for instance the government has cut capital expenditure to fit it's deficit jacket...abroad things do not seem much better...
I would like to clearly state that not only Greece but other defaults are going to occur and the world is inching towards severe problems...
In UK and USA social security and government spending is being curtailed... the traditional economists will say it is a positive action yet when spending is cut not only does it affect the margins the most it also means when one doesn't spend the money they didn't have that they had spent previously the market shirnks...market shrinking yet again has knock down effects and the process goes on and on...
Traditional economists also believe the the global village panacea will allow the developing countries to pick up the slack left by the developed countries austerity... In theories with such vast populations it is true but in practice nothing can be further front he truth... It must first be acknowledged that the developing economies have mostly poor people with a few rich chaps among them...this in turn means that the rich from such economies have to number the same as the ones who stop spending in the developed countries...if their numbers are lower then each one will have to buy more than his developed counterpart...an impossibility...
With the above in mind I still say China is the silver lining if there was one...China spent on development projects not like india and hence China's population wealth is spreading...yet if the spread does not result in wealthy individuals then food prices are the only thing that would remain stubbornly high...
India well I do not like the political leadership which perhaps is too traditional in their economic beliefs...
In USA well Obama's popularity rating say it all...the Republicans aren't going to allow him a chance to breathe....
UK well that's a bit different to USA... David Cameron came in and did all he promised...the new labour is still floundering not sure if it should go back to old school or remain new and play into Cameron's hands...while Cameron's reign is not as exciting as perhaps it should be he plugs away the interesting question remains about labour...I believe junking the Blair Brown movement and going back to the old constituency would indeed be better for them politically...I do believe they will find many more voters there than their current position...good for the world though maybe not...
Europe well Europe is almost certainly going to be the tipping point for my prediction of bad days ahead if it does come..Europe can't seem to rely on anything except a certainty of fighting everytime the big guns meet...it seems implausible the euro disintegrates but stranger things have happened and my bet would be a German pull out rather than Greek removal...
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