How could be 2010 (follows a hope ... part 1)

[xieu...@gmail.com]

This follows message "A hope for the global economy (part 1)"
http://groups.google.com/group/world-thread/browse_thread/thread/50e6bde7dcda3955#

As I told in the former message this is not a prediction, at least not
yet. This is a potential scenarion if the possitive signs that we have
seen in January 2009 consolidate.

If consolidated, this relief would help all economies. But also, as I
told in that message, this scenario would not apply in full to some
economies that, beside the global crisis, have their own local crisis
such as some in Europe -UK, Iceland due to financial crisis or Eastern
Europe, Ireland and Spain due to construction crisis-, USA due to
fiscal, structural and financial crisis, and some commodity producers
with large population which budgets lie above 30% or 40% on commodity
exports such as Russia, Iran, Venezuela, and others. Also, some
countries such as China are using this crisis to change its
development model, that change could be finished within 2009 or not,
if not probably the first half of 2010 would be hard yet. Also, we
should not expect that India leaves this crisis too soon as it depends
too closely on developed economies and it is not changing its
development model. In my opinion, the areas where we will see more
clear this rebound in 2010 will be Japan, SKorea, Latinamerica (except
Venezuela and Ecuador), Africa, Middle East (except Iran and Iraq)
and ASEAN (except Malaysia). I can forget some large commodity
producers.

If rise in global activity and international trade consolidates along
next coming months, hopefully slowly, we should expect that it will
push equipment and manufacturing in the second half of 2009 and in
2010 it will push consumption, goods, retail, consumer services, etc.
In most economies not cited above, it will mean that their growth
rates will be closer to rates that they had until 2008.

It will affect price inflation that probably will rise again after
this short close-to-deflationary time. As most of those economies will
not be too large, the deflationary recession in Europe and USA and
limited growth in those countries could neutralize each to other,
commodities will rise slowly and it will produce some inflation but
not too high. If China finishes its transition in 2009, global
inflation, in particular related to comodities, would rally.

If growth pass through contagion to US economy and the rest of Europe
at the end of 2010, the hyperinflationary crisis would start. But this
will be another message, if someone shows interest on that.

Peace and best wishes.

Xi