2017 Forecasts – The Global Economy

The Euro ZoneIn April 2011 I forecast that there would be little or no growth in the Euro Zone until 2020amp160 I think that is still trueamp160 Where would growth come fromamp160 The level of personal and government debt has spiraled out of control and there is no growth to offset it or retire it amp160Unemployment is high wiping out the hopes of a generation in the process as the percentages of unemployment for people under 30 is often north of 30Government leaders are looking inward and at survival as the antielite antiimmigrant movement spreads to the German and French electionsamp160 The outcome of those two elections will determine the direction of the continent for the next two to three yearsamp160 Pay attention to both of themamp160 The Euro will survive 2017 but it will be challenged on several fronts 2017 could well be the year that the first country of the Euro zone will revert to its old currency The UK kept the pound when it joined the zoneLatin AmericaThe collapse of the price of oil and a number of other commodities see below has wreaked havoc on many of the countries in Latin Americaamp160 Unfortunately the banana republic caricature of the last century seems to again be applicableamp160 In many ways the only stories coming out of this continent are about corruption and economic contraction and collapseamp160 This will not change at all in 2017amp160 To think that Colombia is the fastest growing economy in Latin America is a fact difficult to wrap oneamp8217s mind aroundIt has always been my thinking as a futurist when looking at US foreign policy that given all the global dynamics unfolding it is time for the country to decide to embrace a dominant Western Hemisphere longterm strategyamp160 Geography and natural resources will play increasing importance in a time when Spaceship Earth is experiencing the strains of overpopulation and the cataclysmic reality of climate changeEnergy and OilAs longtime readers of this column know I have been consistently right about the price of oilamp160 A forecast in 2006 that oil would be 125 a barrel in 2008 was ridiculed and then found to be correctamp160 Ever since I have correctly forecast the price of oil every Januaryamp160 The only forecast I got wrong was in degree in January 2014 when I said that the price would largely be between 90120 in the beginning of the year but could drop below the 90 bottom of the range to perhaps the 6070 range by the end of the year That was a challenged forecast when oil was around 100 It went down to the 30 levelamp160 I did not foresee Saudi Arabia going for market shareThe price of oil will trade between 4060 a barrel this yearamp160 Any aberration outside this range will be temporaryamp160 We will never see a 100barrel price again except for some Black Swan event of significant magnitudeamp160 As I forecast in March 2016 20152017 is the beginning of the end of the fossil fuel eraThis is causing tremendous disruption around the worldamp160 Only 45 countries in the Middle East can produce for less than 40 a barrel and be profitableamp160 Russia Nigeria and Venezuela all produce in the 70plus range which is why all three of those economies are in significant GDP contractionamp160 Look at the economic collapses of Venezuela and Nigeria as the beginning of massive disruption in the economic geopolitical landscape in the next few yearsRenewable EnergyThe parallel development is the rapidly increasing growth of renewable energy around the worldamp160 Solar is now as cheap as fossil fuels as a source of electricityamp160 Globally solar and wind are growing at solid doubledigit rates There was even an incidence of a country Portugal being powered by renewable energy for four straight days in 20162017 will be the year when it will become more widely understood that renewable energy will begin to move the marginal cost of energy towards zero by the 2020samp160 It is almost too hard to imagine what that will do to economies around the world when the cost of energy will be increasingly about upfront financing and not ongoing variable costs into the futureamp160 The opening of Tesla Poweramp8217s Gigafactory is just the beginning of a scaling up energy revolutionOne of the coming massive disruptions already begun in oil exporting countries will be the global move from fossil fuels to renewable energies over the next 10 yearsamp160 The ripple effect of this must be strategically planned for in the next few years to avoid wrenching economic upheavals around the world from 2017 through 2025Next up TechnologyClick the social buttons above or below to share this content with your friends and colleaguesThe opinions and points of view expressed in this article are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggersamp160

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2017 Forecasts – The Global Economy

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David Houle

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