2011 has already had more history-shattering events than almost any other year since World War 2. Revolutions have swept the Middle East and much of Africa, a new war has erupted in Libya, Japan has experienced an unprecedented tsunami and a horrific nuclear crisis, the price of oil is skyrocketing, multiple nations in Europe are experiencing a financial meltdown and budget issues have pushed the U.S. government to the verge of a shutdown. In past years, it always seemed like there was time to "catch our breath" between each major crisis, but now huge events are striking in rapid-fire succession. We live at a time when wars, rumors of wars, natural disasters, bizarre occurrences and major financial problems are becoming so common that they hardly shock us anymore. 2011 truly has been one wild and crazy year, and the world is literally being transformed right in front of our eyes.
For a moment, let's review some of the history-shattering events that we have witnessed this year so far and the impact that they have had on the financial world....
#1 The Japanese Tsunami
When the tsunami struck Japan back on March 11th, most of us did not even understand what we were seeing. After all, who had ever heard of a massive wall of water sweeping 6 miles inland?
Thousands upon thousands of Japanese were killed and entire cities were wiped off the map. The Japanese economy has been absolutely devastated. Global supply chains are in a state of chaos.
Prior to this disaster, Japan was the third largest economy in the world. But now it is going to take them decades to fully recover. Some towns and cities may never be rebuilt. Japan will not be in a position to buy up more U.S. government debt for a long, long time. The economic balance of power in Asia is going to shift even more in the direction of China.
#2 The Japanese Nuclear Crisis
We will probably not know the full extent of the nuclear crisis in Japan for quite some time. Every day the news just seems to get worse. According to the Los Angeles Times, seawater near the Fukushima nuclear complex was recently found to contain "iodine-131 at 7.5 million times the legal limit".
If that wasn't bad enough, now Japanese authorities have announced that 11,500 tons of "moderately radioactive" water are going to be purposely released into the Pacific Ocean.
Japan's neighbors are becoming increasingly alarmed. Some South Korean schools closed on Thursday due to fears about radioactive rain and India has banned all imports of food from Japan.
The future of the nuclear power industry in Japan is in serious doubt. There are some people that believe that the Japanese seafood industry is going to be absolutely destroyed by all of this.
Even more importantly, there is going to be at least some portion of northern Japan that is going to be uninhabitable even after this crisis has been resolved. In addition, the health impact of this crisis is going to be felt for decades and will probably never be fully known.
#3 Revolutions In The Middle East And Africa
For some reason, revolutions have erupted all over the Middle East and Africa this year. First we saw revolutions take place in Algeria and Tunisia and then we witnessed the unprecedented events in Egypt. Now there are protest movements in almost every major Arab country.
All of this chaos in the Middle East is pushing the price of oil up to frightening levels. At last check, U.S. oil was above $110 a barrel and Brent crude was far higher than that. The last time oil prices were this high was in 2008 and by the end of that year world financial markets had absolutely crashed.
Will the same thing happen again this year?
Also, could it be that we have reached the end of the "cheap oil" era? If so, what will that mean for the future of the global economy?
#4 War In Libya
For some reason, the U.S. and the EU have decided that it is a good idea to go to war in Libya. But they aren't putting any boots on the ground yet. Right now they are just sticking to air strikes.
But it doesn't look like air strikes alone are going to be enough to force Gadhafi out.
So are the U.S. and the EU going to invade Libya at some point? If not, would they actually allow Gadhafi to remain in control of Libya after everything that has happened?
But Libya is not the only place where international forces have gotten involved. UN forces have also been conducting air strikes in the Ivory Coast.
So is this how it is going to be from now on? The "international community" is going to start bombing whenever the internal political situation in a nation is not "acceptable"?
The global elite may believe that "policing the world" is a good idea, but the truth is that it sets a very dangerous precedent and it makes the globe a much less stable place.
#5 U.S. Government Shutdown?
If the Republicans and the Democrats do not come to a budget agreement before midnight tomorrow, there will be a government shutdown. This will not be the end of the world and it has happened a number of times before. If it does happen, hopefully it will be for just a few days.
But this shows just how bitter politics have become in American right now. The truth is that the amounts they are arguing over aren't even that large. The Republicans are proposing $61 billion in budget cuts which would cut the budget deficit for 2011 by only 3.8 percent. The Democrats are proposing $33 billion in budget cuts which would cut the budget deficit for 2011 by just 2.1 percent.
So what is going to happen when it comes time to raise the debt ceiling?
And what is the battle over next year's budget going to look like?
Sadly, the truth is that neither party seems to be serious about balancing the budget any time soon.
As I have written about previously, the U.S. government has a very serious debt management problem. Something needs to be done about this debt crisis immediately. We simply cannot stay on the road that we are on.
It is being projected that U.S. government debt will rise to about 400 percent of GDP by the year 2050. Of course that will never happen because we will have a complete and total financial collapse in this country long before then if nothing changes.
Read all ten:
http://endoftheamericandream.com/archives/wild-and-crazy-2011-10-history-shattering-events-that-have-shaken-the-financial-world-to-the-core
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