The Decline Of The West: Presenting The Decline of The West In Two Easy Infographics
There’s been a shift of wealth.
Two interesting infographics were published recently that make it so easy to see the decline of the West, even a caveman can do it.
The first is from the Brookings Institute, which has released an interactive map showing economic growth data for the largest 300 metropolitan areas in the world– from New York and London to Okayama, Japan and Wulumuqi, China.
The Brookings map ranks each of these cities based on economic performance over three distinct periods, measuring both GDP growth and employment trends.
The first time period is the last full year of data, 2011-2012. The second time period is that particular city’s economic low point since the global recession began in 2007. And the third period of time is a long-term view between 1993-2007.
The map then color codes each city by quintile. Dark blue represents the strongest economic growth over the three periods, orange and red represents the weakest.
‘Fiscal Cliff’ Distracts As ‘Fiscal Abyss’ In Japan, UK And U.S. Cometh. Gold Is Traditionally Sought Out As A Safe-Haven And Inflation Hedge That Investors Diversify Into In Times Of Trouble
The U.S. federal deficit is now exceeding $1 trillion dollars every year —up from $161 billion in 2007, the last year before the financial crisis. Spending is up some $1 trillion, as outlays for Social Security, Medicare, Medicaid and other entitlements have increased by an amount equal to the entire 2013 military budget – a budget which may again surpass the combined military expenditure of every other nation in the world.
U.S. unfunded liabilities are now estimated at between $50 trillion and $100 trillion and by the end of the decade (in less than just 7 years), runaway entitlement spending will require shutting down the military or crippling many other vital domestic spending programs to head off massive deficits that will likely lead to a dollar crisis and significant inflation.
No matter what deal is eventually agreed, whether before or after the new year, it will at best nibble at the edges of the trillion dollar annual deficits that are being piled up.
While all the focus has been on the so called U.S. ‘fiscal cliff’, amnesia has taken hold and many market participants have forgotten about the far from resolved Eurozone debt crisis – not to mention looming debt crisis in the UK and Japan.
In Japan, the national debt is seen topping ¥1 quadrillion by the end of March 2013. A policy of money printing pursued for a decade has failed abysmally and now politicians look set to pursue currency debasement in an even more aggressive manner – with attendant consequences.
The UK is one of the most indebted countries in the industrialised world – the national debt now stands at more than 1 trillion pounds ($1.6 trillion) and total debt to GDP in the UK remains over 500%.
Gold is traditionally sought out as a safe-haven and inflation hedge that investors diversify into in times of trouble. This is because throughout history, those who own physical gold have been protected from financial, economic and monetary crisis.
MESS IN THE WEST: DR. DOOM’S DIRE DEBT PREDICTION
The unchecked growth of debt in Western countries will lead to a “colossal mess” within the next five to 10 years, according to Marc Faber, author of the infamous “Gloom, Boom and Doom” report.
“I think the regimes will try to keep the system alive as it is for as long as possible, which means there’s no ‘fiscal cliff,’ there’s a fiscal grand canyon,” Faber (aka “Dr. Doom”) said during a Monday broadcast of CNBC’s “Squawk Box.”
Faber continued, arguing that the expansion of government in the West has made it possible for countries to load up on massive, never-ending deficits, which, according to him, will soon reach crisis levels.
[Faber’s comments on the “colossal mess” are at the 03:30 mark. However, the entire discussion is definitely worth a watch]: