CR News Reports© - Global Economy - Economy On Borrowed TimeGlobal Economy- March 7, 2014

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  • The good news…

  • Then, the bad news
  • Tensions in the Ukraine seemed to have subsided
  • Russia has many trading partners besides the U.S.

The good news, the global economy, especially the U.S. economy is growing well, at least that’s what was reported for Q4 2013. Holidays sales were the best ever. Black Friday and continuing sales just made the holiday season. Improvements in all measurable areas of the economy were also included in the governments 3.2 percent growth rate for Q4 of 2013.

Then, the bad news, as usual the numbers get revised months later. 3.2 became 2.4, that’s a 25 percent reduction citing that holidays sales were dismal and the weather was to blame. There’s always something positive to cite when the reports are coming out and something to blame when they get revised weeks later.

The tensions in the Ukraine seemed to have subsided, but it wasn’t because of any country yielding to economic threats by the U.S. government. Russia and China sided together to support President Putin’s moves into the Ukraine. What could happen to the global economy if the U.S. decides foolishly to slap economic sanctions on Russia?

Russia has many trading partners besides the U.S.. Russia is the largest oil and gas supplier and China is the largest importer of these types of energy products. Russia and China could decide to abandon the petro-dollar deals and use another currency. That would bring a shockwave through the global economy immediately. Russia could cutoff energy supplies and pipeline deliveries to Europe during a severe winter. Prices would skyrocket and people would suffer and die. This is the result of sanctions to punish a country? China and Russia could also start selling off U.S. debt and flood the market. These maneuvers are what’s called leverage in a global economy and are the high cards that two countries could play if the U.S. isn’t careful with threats.

QUESTION: What should readers take away from this message today?

ANSWER: That the U.S. has little leverage on Russia and China together.  

QUESTION: Why is this information timely?

ANSWER: This information is timely because President Obama thought that slapping Iran-type sanctions on Russia would bring them to their knees economically. 

QUESTION: How can readers best apply this information to their lives right now?

ANSWER: In foreign policies and day-to-day life you should think through your opponent’s options before you threaten them with ultimatums.  

COMMENTARY: Economy on borrowed time – the U.S. still acts like they hold the high cards, as they unsuccessfully play them and lose. It’s elitist to behave this way. Hopefully, the U.S. administration will start realizing that they don’t hold the high cards and start building relations instead of pushing other countries around. One thoughtless slip by the U.S. and the entire economic house of cards could come crashing down. Those are the facts – the U.S. has lost its leverage and that means we are all living on borrowed time economically. So, plan accordingly.



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