The Great Recession of 2008-2010/11 is going to be a very tough time economically.  As I wrote in my Forecast for 2009, this economic collapse brings four words to mind.

The first word is contraction, which is the standard way to view a recession.  Economic activity contracts and we are in a recession, economic expansion represents the end to the contraction.  The contraction was severe in the fourth quarter and will be so in the first quarter and second quarter. Output and consumption are in a deep fall right now and will remain so.

The second word is cleansing which in this context means that old ways of doing business, of looking at only the upside, of embracing debt and extreme leverage must and will be cleansed from both the economy and the way that people think. The casino capitalism of the past 20 years will soon be viewed as an unsustainable exercise in individual and corporate greed.

The third word is reorganization.  To quote from the linked column …

What a day!  President Barack Obama is the 44^th President of the United States.  This will be a day that will go down in history as an inflection day.  Today is a day when the United States and the world changes course and move in a new direction.

Yes President Obama is the first African American to become President and that is a truly momentous event given the history of race in American.  There is no question that this is an event that not only moves America to the next stage of racial harmony but also signals that fact to the world.  It can not be overstated that this achievement opens a new chapter for a country whose democracy stands for equality under the law with freedom and justice for all.  The symmetry with Dr. King’s birthday cannot be overstated.

Expectations and optimism lead to new beginnings.  For those who think the world will change, it will.  Change can be profound and incremental.  Many think that the euphoria will wear off and things will return to partisanship and bureaucracy.  To some degree they will be right.  It is important to keep in mind how even small changes can move individuals and countries in totally new directions.

Motivational and self help gurus talk about how if someone just makes a 10% change in effort or direction each year, that in several years they will be in an entirely different place living an entirely different life.  Well it is quite clear that President Obama, his …

China is nothing less than a historical phenomenon. In just 30 years the country has moved from being a closed, communist country with a rural economy to one of the most economically powerful countries of the world.  It is the first country in history to move from the Agricultural Age to the Industrial Age to the Information Age and now to the Shift Age in 30 years.  The U.S took 200 years to do this.  This must always be kept in mind when looking at China.

It would be impossible to move this rapidly without significant problems, disruptions and upheavals.  These must be expected to occur when such change occurs with such lightening speed, historically speaking.  I have written several times about China and the problems they have.   Back in August of this year, when the Beijing Olympics was a topic of conversation, I forecast that, with the Olympics over, major problems would emerge in China for the next year or two. [This prediction and others I have made can be seen at the bottom of this page.]

There are three forces that are and will cause disruption in China for the next 18-24 months.  The first is the parental love of a child and the boundless rage a parent feels when that child’s life is taken due to incompetence and corruption.  The Chinese government mandates that parents can only have one child.  Certain levels of government in China allowed schools to be built with below …

A global shift in consciousness has occurred during October.  Trust and confidence have given way to fear and uncertainty. Plans and expectations have been completely altered or dashed altogether.  Governments, entire industries, equity markets and the majority of the adult populations in the developed countries of the world are staring into a financial abyss that has no correlation to anything any of them have experienced (unless they are 80 years or older).

Governments separately, and then in consort struggle to stay ahead of a financial catastrophe they can’t quite fathom.  Hundreds of millions of people feel as thought they have been punched in the gut.  Standing on solid ground becomes a metaphor desperately longed for rather than a reality.  For every theory about what to do with one’s money there is an opposite one put forth.  Financial volatility seems omnipresent.   All of this has produced a shift in consciousness that is palpable.

When belief systems come under attack or are shown to be false, when institutional reliability becomes highly questionable,  when what used to work no longer does,  when it feels that events point to not just change but disruption, then it is time to do two things.

First, one must change one’s behavior.  As I have written here, it is clear that consumerism will take a severe hit and that the next two years will be a time of a massive economic downturn.  Thrift will become a dominant value in countries around the world.  Risk and debt will become four letter words …

It was just reported that, as expected, there are now more Internet users in China than in the U.S. As of last month there were 253 million Internet users in China as compared to 220 million in the U.S. What is striking is that in just the last year, the number of new users in China was 90 million, or a growth rate of more than 50%. That annual increase in users is more that the total number of users in most countries in the world.

There are several interesting aspects to these numbers. Of course, since China is the most populous country in the world with more than 1.3 billion people, it will ultimately have more of most any category of people, based on size alone. It is interesting that there seems to be an age divide in China. Not only are 70% of the country’s internet users under the age of 30, 90% of the new users in the last six months were high school students. This reflects the fact that the booming economy in China is led and fueled by those under the age of 40 as many of the older generations are still anchored in the past.

It is possible that, if current growth rates continue, China could have twice as many Internet users as the U.S. within two years. It is when that happens that Internet usage in China will bring about significant change. The 253 million Internet …