Book review of "Game Over"

Reading “Game Over” made me think of a similar thesis over 300 years ago.  Thomas Malthus a classical economist – Before there was the subject of Economics described a situation that existed in long ago Europe.  He put forth that the food supply of the world grew on an arithmetic basis while population grew on a geometric basis.  Malthus felt this foretold dramatic declines in population due to wars, disease, and famine.  So the “Mathusian Dilema” put forth in “ Game Over” is not a new one.

It is clear that the populations of India and China will not be able to live the middle class life style of the average American – Not enough raw materials exist unless some sort of technological breakthru takes place on a huge order.

The book caused me to reflect upon a situation in the past when a rising industrial power was being restrained in it’s desperate search for raw materials to feed it’s factories – Japan in 1941 – This desperate need for raw materials caused a miscalculation on a political and military basis that had terrible consequences for Japan and the rest of the world – Yet provided the spur for the technological leaps forward – (nuclear power, jet aircraft, missile technology etc…).   One can only guess where such a miscalculation would lead us today.

Wingo’s Economic Outlook 2011

1.     After early promise of recovery it will become apparent that the recession has deepened and spread out in the economy.

2.     U.S. unemployment will continue to linger at a high level with U.S. rate hitting 11.5% and California over 14%.

3.     Japan will take steps to cause the economy to expand, these attempts will fail and Japan will lose manufacturing business to China.  The Japanese economy will continue to be mired in deep recession.

4.     The China bubble will burst with a large Real Estate bust with dramatic effects for industrial commodities.

5.     Russia will show effects of high inflation and a flight of capital.

6.     After a false signal upward U.S. Auto makers’ will be battered at the lower end car market will continue to show gains by low cost Korean car manufactures.  Fiat will also show some gains in small car segment.

7.     There will be a revolt by air travelers against restrictive security measures.  As a result airlines will have a softening of business.

8.     California under new leadership will choose to cut programs severely rather than raise new taxes. – This will result in State job layoffs and shift of power to county, city level.  Bond defaults loom.

9.     Announcement of proposals to reform Fannie, Freedie will be made but little substantive change will happen.  Loss from GSE’s  will become astronomical as forecloses boom.

10.  Commercial Real Estate losses will become major R.E. story in 2011        as loans cannot be rolled over.

11.  Banks will continue to fail especially smaller community bank’s in           excess of 150,  FDIC will need bail out from government.

12.  Major State will default on debts!

13.  Further reduction on Santa Barbara Real Estate high end will be hit very hard.

14.  Government deficit will continue unabated National Debt approaches 16 trillions.

15.  Total Real Estate losses will be in excess of 8.5 trillions from peak.

16.  Minor European nations-(Italy, Spain, Portugal, Ireland) will default.  One major European nation- (France, U.K., Germany) will get very shakey.

17.  One major money center bank will be recognized as insolvent.

18.  Oil will cross 120 per barrel, gasoline will go to $4.35 per gallon before declining due to China bust.

19.  Gold will cross $1,900 an oz and Silver $42 an oz.

20.  DJIA – Low 6,200  High 12,400  Close 7,500.

21.  U.S.$ :Yen = 1:62 – Euro parity – Korean Won up to 20% against U.S.$ -South African Rand up  18%.