Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

G8 Crisis and Growth Summit

Politics / Global Debt Crisis 2012 May 22, 2012 - 02:48 AM GMT

By: Ian_R_Campbell

Politics

Why Read: To once again focus on the importance of 'real' economic growth going forward to developed and developing economies.

Featured Article: A May 19 article that appeared in the China.org Blog reported on a Friday meeting of U.S. President Obama and just elected French President Francois Hollande held in advance of the G8 Summit meeting held this past weekend. The article quotes President Obama as saying, following that meeting:


• "President Hollande and I agreed that this (economic growth) is an issue of extraordinary importance, not only to the people of Europe, but also to the world economy"; and,

• "We're looking forward to a fruitful discussion later this evening and tomorrow with the other G8 leaders about how we can manage a responsible approach to fiscal consolidation that is coupled with a strong growth agenda".

President Hollande was reported as saying "growth must be a priority".

Commentary: Very surprisingly, this is one of the seemingly few articles that has been published up to 6:30 a.m. ET this morning on the G8 Camp David talks that were held this past weekend. First some facts:

• the G8 (originally the G6) came into being in 1975 when a first meeting was attended by France, Germany, Italy, Japan, the United Kingdom, and the United States. Canada was added one year later, and Russia was added in 1997; and,

• according to International Monetary Fund data, in 2011 these eight countries accounted for just over half of estimated World GDP.

  2011 GDP (U.S.$ trillions) World GDP Ranking
Canada 1.7 10
France 2.8 5
Germany 3.8 4
Italy 2.2 8
Japan 5.9 3
Russia 1.9 9
United Kingdom 2.4 7
United States 15.1 1
Sub-total 35.8  
Total World GDP 69.7  
G8 as % of Total 51.4%  

With that background:

• of course growth must be a priority, much as breathing is a priority for everyone not ready to 'jump off a cliff'. Without real growth (i.e. 'inflation excluded' growth) economic stagnation or worse has to be the order of the day;

• real growth is not something that can be 'switched on and off' in the blink of an eye. In the current world economic climate real growth, while interesting to talk about over cocktails, real growth in any given country isn't likely to happen without a:

• vibrant and growing manufacturing base, and

• country specific export base;

• if the G8 leaders, who represent developed countries, want to see prospective economic growth (real or inflation included) they almost certainly at this stage will have to continue the 'rob Peter to pay Paul' Government funding scenarios that have been ongoing since at least 2008. This means they almost certainly will have to resort to further quantitative easing; and,

• President Obama, seeking re-election on November 6, needs the U.S. to show positive (at least inflation included, or to use an economist's term 'nominal') economic growth in the first three quarters of 2012. This very likely means that further quantitative easing, hinted at by U.S. Federal Reserve Chair Bernanke last week, will be 'coming to the United States soon'.

Again, the limited reporting on the Camp David Summit, at least until early this morning, is surprising. One might have thought that since economic growth apparently was a strong agenda item, one might have seen 'smoke signals' rising from Camp David more than once over the course of Saturday and Sunday. This is because 'blowing economic smoke' is one of the things many developed country politicians seem to excel at these days.

G8 summit to discuss 'strong growth agenda'

Source: China.org, May 19, 2012 Reading time: 2 minutes

Also read: Camp David: G-8 Platitudes Don't Solve Anything

Source: Forbes, Paul Roderick Gregory, May 20, 2012 Reading time: 3 minutes

Ian R. Campbell, FCA, FCBV, is a recognized Canadian business valuation authority who shares his perspective about the economy, mining and the oil & gas industry on each trading day. Ian is also the founder of Stock Research Portal, which provides stock market data, analysis and research on over 1,600 Mining and Oil & Gas Companies listed on the Toronto and Venture Exchanges. Ian can be contacted at icampbell@srddi.com

© 2012 Copyright Ian R. Campbell - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in