What is in this article?:
- The World in Perspective
- Long-term commodity trends
For the last couple of years, U.S. farmers have been insulated from the global financial crisis. How much longer can this separation continue, and are we on the verge of sharing in some of these economic “issues?” Let’s take a quick look at some of the long-term trends and who the important players are in the world. The pie diagram below clearly shows that the economic “stool” has three legs: The U.S., China and the European Union. The U.S. accounts for 22% of the world’s GDP, and China is at 11.6%. The European Union accounts for 23%. It is important to recognize that since these three regions combined generate 57% of the world’s GDP, if weakness occurs in any of those “legs,” the stool is not going to stay up.
While we read almost daily in the U.S. about the concerns of our debt, the debt of many other countries has already caught up with them. No one can continue forever to borrow its way out of debt. That’s what is being attempted now. Just consider these numbers:
1. Japan’s debt is 212% of its GDP.
2. Greece’s debt is 165% of its GDP.
3. The U.S. is at 103%.
4. China is at 26%.
Now consider the unemployment rates in these countries.
1. Greece is at 25.1%.
2. Spain is at 24.6%.
3. The U.S. is at 7.8%.
4. Germany is at 5.5%.
The numbers clearly point out the significant problems facing many countries in Europe. Germany is the backbone of the European economy, but one country in itself cannot support all the nations of Europe.