By Nick Edwards | Reuters – 14 December 2011
BEIJING (Reuters) - China's plan for a new $300 billion sovereign wealth fund is as much a warning to Washington as it is a body blow to Brussels.
It's the clearest sign yet of Beijing's waning faith in bonds issued by Europe and the United States. Europe's festering debt debacle, record low yields on U.S. Treasuries and a depreciating dollar all add weight to the view in China that the time is ripe to change investment tack.
"China has decided that real assets are better than broken debt fix promises and low interest rates," says Paul Markowski, president of MES Advisers and a long-time external adviser to China's monetary policymakers on global financial markets.
Beijing has watched for two years as Europe's crisis has choked growth and demand in China's biggest export market and stoked default risks on the near $800 billion of euro zone government bonds it is estimated to own.
It has been a painful lesson.
After all, China had actively bought euro assets to guard its $3.2 trillion reserve pile against over-exposure to U.S. dollars, which have lost about a third of their value in the last 10 years as U.S. Treasury yields have sunk to record lows.
Reuters reported last week that the People's Bank of China plans to create the new vehicle with two funds, one for Europe and one for the United States, making China in aggregate the world's biggest sovereign wealth fund investor. The plan originated before Europe's debt crisis, sources said.
That gels with comments from investment sources with links to China's monetary authorities and foreign reserve managers who detect a clear desire in Beijing to acquire real assets in return for supplying fresh funds to bridge U.S. deficits and recapitalize European financial institutions and governments.
HAPPIER RETURNS
The $300 billion figure is consistent with the sum that Markowski and others calculate China has in excess reserves -- the amount beyond what Beijing would need to tackle a balance of payments crisis or a domestic funding emergency.
"They want underlying assets. Equities, corporate bonds, real estate -- anything that governments want to flog," said one source involved in foreign exchange trading for official institutions such as central banks.
The source singled out bidding for the Portuguese government's stake in utility firm Energias de Portugal, which would net roughly 2.5 billion euros for Lisbon, as typical of the path indebted countries will have to follow in future to persuade reserve managers to part with additional cash [ID:nL6E7NC0UN].
Granted, Chinese investors won't be warmly received everywhere -- a sovereign wealth fund showing up in Paris or Madrid with an offer to buy up public infrastructure would probably come away disappointed.
"It's easier said than done," said one Hong Kong based investment banker who has advised Chinese clients on overseas acquisitions. "One idea is that China could buy up agricultural land. They've also eyed ports in the past. They just don't want to do anything that's politically unpopular."
There are domestic pressures, too. China Investment Corp (CIC), the country's existing sovereign wealth fund, was sharply criticized within China for money-losing investments in U.S. investment bank Morgan Stanley and private equity firm Blackstone Group in 2007.
But with a European debt crisis and the U.S. triple-A rating no longer a given, China's state investors have good reasons to push into new kinds of assets.
"There is a great deal of discomfort (among reserve managers) over what the concept of a risk-free asset is," said Gary Smith, the London-based global head of official institutions at BNP Paribas Investment Partners.
Doubts about the safety of government bonds in developed markets where fiscal balance sheets are battered and inflation risks are high in the face of exceptional monetary stimulus have seen Smith's clients allocate new cash to inflation-linked bonds this year and even move into higher risk emerging markets.
"Of course your risk goes up if you invest in emerging markets, but if your risk has already gone up in what you previously considered risk-free assets, then the relative disadvantage of emerging markets has gone down."
That analysis speaks volumes to reserve managers and wealth funds, opening up a raft of new investment opportunities that developed economies had not previously had to compete against.
Data shows China's shift into real-world assets is under way.
China's outward foreign direct investment (FDI) hit $68 billion in 2010 after more than doubling in 2008 to $52 billion from $23 billion in 2007, according to Karl Sauvant, executive director of the Vale Columbia Center on Sustainable International Investment at Columbia University and an expert on global FDI.
Sauvant's institute estimates China will strike $1-2 trillion in FDI deals over the coming decade, adding to its existing portfolio of over $300 billion.
ONCE IN A LIFETIME
Whether China's change of focus is all borne of European debt and dollar debasement or a desire to move China's economy up the value chain, a new mood in Beijing is evident to many.
"Many foreign firms have advanced technology and they are having business difficulties and at the brink of bankruptcy. This is the opportunity that occurs only once in a thousand years," Zheng Xinli, an influential government adviser, was quoted as saying last week by Hong Kong's Wen Wei Po newspaper.
It's at least the best time in 15-20 years to buy European listed equity, even adjusting for the tattered price-tags on European financial stock, says JP Morgan analyst Mislav Matejka.
Euro zone shares are trading at a 46 percent price-to-book value discount to the United States, making it the cheapest region in the world for a global equity investor, says Matejka.
Independent China policy expert Andy Xie agrees.
"European stocks are cheap," said Xie. "Many European companies earn profits all over the world. It makes sense for Asian central banks to shift their reserves from overpriced government bonds like US Treasuries into such stocks. It would pump money into the euro zone through a channel that benefits Asian countries over time."
More than $6 billion lost in Iraq. Where did that money go?
$6.6 billion in lost Iraq cash now accounted for, inspector says
By Laura Rozen | The Envoy – 27 October 2011
It's a rare day when positive news surfaces from the frontlines of Iraq's post-occupation government--or from its troubled economy. However, a U.S. Iraq inspector general report that concluded this week that $6.6 billion in shrink-wrapped cash the U.S. government previously feared had gone missing in the chaotic early days of the Iraq occupation has in fact been safely accounted for.
"The mystery of $6 billion that seemed to go missing in the early days of the Iraq war has been resolved, according to a new report," CNN national security producer Charles Keyes reported Wednesday. "New evidence shows most of that money, $6.6 billion, did not go astray in that chaotic period, but ended up where it was supposed to be, under the control of the Iraqi government, according to a report from the office of the Special Inspector General for Iraq Reconstruction or SIGIR."
Stuart Bowen, the special inspector general for Iraq reconstruction, had previously testified that as much as $6.6 billion of the $10 billion the United States shipped to Iraq had disappeared due to "weaknesses in [the Department of Defense's] financial and management controls," Keyes wrote, citing the bureaucratese from a previous SIGIR report.
The cash had in part been drawn from Iraq's own international assets, accrued during the pre-war, UN-run Oil for Food program. It was flown to Iraq in the wake of the U.S. 2003 invasion; the idea was that it would help pay for the Iraq reconstruction and development efforts under the Coalition Provisional Authority, the U.S.-led occupation outfit that dissolved in 2004. The original idea was to store most of the money in accounts in the Central Bank of Iraq; U.S. occupation authorities also apparently stored a few hundred million in a vault at one of Saddam Hussein's palaces they used as their headquarters for various cash needs.
After the Coalition Provision Authority dissolved in 2004, however, it wasn't clear where the funds had gone, the previous SIGIR report said. But apparently, the money was properly transferred to accounts held at the Central Bank of Iraq, the new SIGIR report found.
"But the inspector general's new report says almost all the $6.6 billion was properly handed over to Iraq and its Central Bank," Keyes writes. "'SIGIR was able to account for the unexpected [Development Fund of Iraq] funds remaining in DFI accounts when the [Coalition Provisional Authority] dissolved in June 2004,' the new report says. 'Sufficient evidence exists showing that almost all of the remaining $6.6 billion remaining was transferred to actual and legal [Central Bank of Iraq] control.'"
This is not to say that the mystery of all the billions and billions the U.S. spent in Iraq has been entirely resolved. The SIGIR report says that inspectors are still trying to piece together the fate of some of the few hundred million that U.S. officials stowed at one of Saddam Hussein's former palaces.
"While the bulk of the money was transferred to the Central Bank of Iraq, $217 million remained in a vault in a former presidential palace and was held by the U.S. Defense Department and most was doled out for a variety of projects and payrolls, the report says," Keyes reported. A February 2008 SIGIR audit found that $24.45 million of the $217 million stored at the palace vault remained, and was later turned over to Iraq.
The next SIGIR report on DoD spending on contracting projects in Iraq is expected in January 2012--after the formal withdrawal of the last U.S. troops from the country.
By Laura Rozen | The Envoy – 27 October 2011
It's a rare day when positive news surfaces from the frontlines of Iraq's post-occupation government--or from its troubled economy. However, a U.S. Iraq inspector general report that concluded this week that $6.6 billion in shrink-wrapped cash the U.S. government previously feared had gone missing in the chaotic early days of the Iraq occupation has in fact been safely accounted for.
"The mystery of $6 billion that seemed to go missing in the early days of the Iraq war has been resolved, according to a new report," CNN national security producer Charles Keyes reported Wednesday. "New evidence shows most of that money, $6.6 billion, did not go astray in that chaotic period, but ended up where it was supposed to be, under the control of the Iraqi government, according to a report from the office of the Special Inspector General for Iraq Reconstruction or SIGIR."
Stuart Bowen, the special inspector general for Iraq reconstruction, had previously testified that as much as $6.6 billion of the $10 billion the United States shipped to Iraq had disappeared due to "weaknesses in [the Department of Defense's] financial and management controls," Keyes wrote, citing the bureaucratese from a previous SIGIR report.
The cash had in part been drawn from Iraq's own international assets, accrued during the pre-war, UN-run Oil for Food program. It was flown to Iraq in the wake of the U.S. 2003 invasion; the idea was that it would help pay for the Iraq reconstruction and development efforts under the Coalition Provisional Authority, the U.S.-led occupation outfit that dissolved in 2004. The original idea was to store most of the money in accounts in the Central Bank of Iraq; U.S. occupation authorities also apparently stored a few hundred million in a vault at one of Saddam Hussein's palaces they used as their headquarters for various cash needs.
After the Coalition Provision Authority dissolved in 2004, however, it wasn't clear where the funds had gone, the previous SIGIR report said. But apparently, the money was properly transferred to accounts held at the Central Bank of Iraq, the new SIGIR report found.
"But the inspector general's new report says almost all the $6.6 billion was properly handed over to Iraq and its Central Bank," Keyes writes. "'SIGIR was able to account for the unexpected [Development Fund of Iraq] funds remaining in DFI accounts when the [Coalition Provisional Authority] dissolved in June 2004,' the new report says. 'Sufficient evidence exists showing that almost all of the remaining $6.6 billion remaining was transferred to actual and legal [Central Bank of Iraq] control.'"
This is not to say that the mystery of all the billions and billions the U.S. spent in Iraq has been entirely resolved. The SIGIR report says that inspectors are still trying to piece together the fate of some of the few hundred million that U.S. officials stowed at one of Saddam Hussein's former palaces.
"While the bulk of the money was transferred to the Central Bank of Iraq, $217 million remained in a vault in a former presidential palace and was held by the U.S. Defense Department and most was doled out for a variety of projects and payrolls, the report says," Keyes reported. A February 2008 SIGIR audit found that $24.45 million of the $217 million stored at the palace vault remained, and was later turned over to Iraq.
The next SIGIR report on DoD spending on contracting projects in Iraq is expected in January 2012--after the formal withdrawal of the last U.S. troops from the country.
Jamie Campany: a gold scammer
Confessions of a Gold Scammer
By AVNI PATEL | Good Morning America – 27 October 2011
A federal judge next month will sentence the man who authorities say took advantage of the booming gold market, by scamming more than 1,400 people out of tens of millions of dollars.
But before he goes to prison, the mastermind of the scheme, Jamie Campany, sat down with ABC News' Chief Investigative Correspondent Brian Ross to reveal how he tricked his hundreds of victims out of nearly $30 million.
The most promising victims of the gold scam, Campany said, were spotted through Google earth satellite images. Campany and his team matched phone leads to addresses to find victims with the biggest homes, and therefore the most money to invest in gold and silver.
But in reality, there was no gold despite the legitimate-looking transaction papers from the Global Bullion Exchange -- a company that Campany said was "completely bogus."
The Global Bullion Exchange was an invention of Campany's, who took ABC News back to the now-empty telephone boiler room in Florida where his telemarketers worked their victims, mostly upper middle class business people who Campany said let their egos get the best of them.
"Quite frankly, little old ladies are a lot more astute and a lot more skeptical about making investments with people they don't know," he said.
The pitch worked off the falling stock market and the rising price of gold as Campany recalled his lines for ABC News.
"Come on. Everybody knows what's going on in the markets today. Are you living in a cave?" he would say.
There was an answer for everything -- even if victim's protested by saying they didn't have any money.
"Sure you do," Campany or one of his telemarketers would say. "You've got a 401k, you have a stock portfolio... You have dead dogs that are not performing."
Dave Blomberg of Hialeah, Fla., said he was caught up in the scam after he received those calls.
"I did end up giving them a considerable amount of money, cause I thought if I invested more, I would get the money back," Blomberg said.
He never will, losing $75,000, and nor will the other investors. By the time the scheme collapsed and this place was shut down, all the money was long gone.
"I think about it every day. These people have to live with the pain that I caused them," Campany said. "It's going to hurt them for the rest of their lives. Hopefully this is one way I can stop it from happening to anybody else."
Campany faces up to 25 years in prison and told ABC News he's hoping his public confession will show the judge that he's truly sorry for his crimes.
By AVNI PATEL | Good Morning America – 27 October 2011
A federal judge next month will sentence the man who authorities say took advantage of the booming gold market, by scamming more than 1,400 people out of tens of millions of dollars.
But before he goes to prison, the mastermind of the scheme, Jamie Campany, sat down with ABC News' Chief Investigative Correspondent Brian Ross to reveal how he tricked his hundreds of victims out of nearly $30 million.
But in reality, there was no gold despite the legitimate-looking transaction papers from the Global Bullion Exchange -- a company that Campany said was "completely bogus."
The Global Bullion Exchange was an invention of Campany's, who took ABC News back to the now-empty telephone boiler room in Florida where his telemarketers worked their victims, mostly upper middle class business people who Campany said let their egos get the best of them.
"Quite frankly, little old ladies are a lot more astute and a lot more skeptical about making investments with people they don't know," he said.
The pitch worked off the falling stock market and the rising price of gold as Campany recalled his lines for ABC News.
"Come on. Everybody knows what's going on in the markets today. Are you living in a cave?" he would say.
There was an answer for everything -- even if victim's protested by saying they didn't have any money.
"Sure you do," Campany or one of his telemarketers would say. "You've got a 401k, you have a stock portfolio... You have dead dogs that are not performing."
Dave Blomberg of Hialeah, Fla., said he was caught up in the scam after he received those calls.
"I did end up giving them a considerable amount of money, cause I thought if I invested more, I would get the money back," Blomberg said.
He never will, losing $75,000, and nor will the other investors. By the time the scheme collapsed and this place was shut down, all the money was long gone.
"I think about it every day. These people have to live with the pain that I caused them," Campany said. "It's going to hurt them for the rest of their lives. Hopefully this is one way I can stop it from happening to anybody else."
Campany faces up to 25 years in prison and told ABC News he's hoping his public confession will show the judge that he's truly sorry for his crimes.
Obama moves to boost economy
Obama to tout housing aid on western campaign swing
By Jeff Mason | Reuters – October 24, 2011WASHINGTON (Reuters) - President Barack Obama will tout newly unveiled measures on Monday aimed at aiding struggling homeowners and easing the housing crisis on the first leg of a campaign-style swing through western states crucial to his re-election in 2012.
Stymied by Republican resistance to his $447 billion jobs package and tapping into public displeasure with Congress, Obama is rolling out a series of economic remedies that do not require approval from a fractious Congress, a White House official said.
A leading U.S. housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners classified as "underwater" because their mortgages cost more than their homes are worth.
The plan for homeowner relief will be the centerpiece of Obama's visit on Monday to Nevada, the state with the highest foreclosure rate in the country.
It is the latest White House effort to deal with a key factor stalling the economy -- a crippled housing market -- and adding to political liabilities for Obama, whose re-election bid is already imperiled by stubbornly high U.S. unemployment.
It remained unclear whether the Obama administration's revised approach, which falls short of an overarching plan that some experts have said is needed, will provide enough of a boost to the battered housing market to spur the stagnant U.S. economic recovery.
Earlier federal programs to curb housing foreclosures have failed to yield the benefits initially promised. An estimated 11 million U.S. homeowners hold properties that are worth less than their mortgages.
Seeking to show he is ready to take unilateral action to confront economic problems, Obama will also unveil a student loan initiative on a visit to Colorado. He will attend fundraising events in both states plus California during the three-day trip.
The states on Obama's tour were chosen deliberately.
Each has large populations of Hispanics, a voting bloc Obama's campaign is eager to win over. Nevada and Colorado are "swing states" that alternate allegiance between Republicans and Democrats, making them valuable political prizes in presidential elections. Both could prove critical to Obama's chances in the November 2012 election.
He will use them as a backdrop to make his latest push to boost the weak economy, which remains the biggest obstacle to his hopes of retaining the presidency. According to the White House official, he will also try out a new slogan to put pressure on Congress: "We can't wait."
'SAVE HIS OWN JOB'
Republicans, choosing among a field of presidential candidates currently led by former Massachusetts governor Mitt Romney and businessman Herman Cain, accused Obama of focusing more on fundraising than helping the unemployed.
"The president is back to doing what he does best -- raising money to save his own job," said Reince Priebus, chairman of the Republican National Committee, in a new advertisement. "Instead of focusing on getting the 14 million unemployed Americans back to work, he's focusing on protecting his own."
Housing is one area that has dogged Obama's efforts to improve the economy.
His administration has been working with the Federal Housing Finance Agency (FHFA), the regulator for mortgage giants Fannie Mae and Freddie Mac, to find ways to make it easier for borrowers to switch to cheaper loans even if they have little to no equity in their homes.
Obama will highlight the result of that work during his stop in Nevada, the epicenter of the foreclosure crisis.
Before Obama left Washington, the FHFA announced it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.
To help underwater borrowers, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property's value from participating in HARP, which is targeted at loans backed by Fannie and Freddie.
Regulators are revamping the refinancing program to ensure banks are protected from having to buy back HARP loans. The requirements now state they will only have to verify that borrowers have made at least six of their last mortgage payments and in most cases, eliminate the need for appraisals.
FHFA said that Fannie and Freddie will waive certain fees for borrowers that refinance into loans with a shorter term, aiming for homeowners to pay down the amount they owe at a faster rate.
HARP, one of the Obama administration's anti-foreclosure efforts, was unveiled in March 2009 and expected to help as many as 5 million borrowers. So far, 893,800 borrowers have refinanced their loans through August by using HARP. FHFA said it will extend HARP until December 31, 2013.
With mortgage rates currently near record lows, allowing these underwater borrowers to refinance could help stave off a wave of foreclosures and free up cash for other spending that could help underpin the economy's recovery.
(Additional reporting by Caren Bohan, JoAnne Allen and Margaret Chadbourn; editing by Will Dunham)
Steve Jobs predicted Obama would be a one-term president
By Rachel Rose Hartman | The Ticket – Fri, 21 Oct, 2011
Steve Jobs, known for his aggressive and sometimes prickly personality, didn't hold back when he met President Obama in 2010: The Apple CEO warned Obama he wasn't going to win re-election.
"You're headed for a one-term presidency," Jobs said during a meeting with the president that took place a year prior to Jobs' death related to pancreatic cancer, according to his upcoming biography as reported by the Huffington Post.
Walter Isaacson, who wrote the forthcoming Jobs bio, reportedly reveals that Jobs argued that Obama was jeopardizing his re-election prospects because of what Jobs took to be a pervasive anti-business climate in his administration. Jobs cited excessive federal regulations and operating costs for businesses as harmful legacies of the Obama White House.
Also, Jobs nearly missed the meeting in the first place.
From the Huffington Post:
Though his wife told him that Obama "was really psyched to meet with you," Jobs insisted on the personal invitation, and the standoff lasted for five days. When he finally relented and they met at the Westin San Francisco Airport, Jobs was characteristically blunt. He seemed to have transformed from a liberal into a conservative.
After laying into the White House's purported anti-business outlook, Jobs offered to help Obama repair the rift by arranging meeting between the president and a group of CEOs. When the guest list began to grow, Jobs reportedly resolved to back out of the gathering. Instead, he attended, though he poo-pooed the fancy menu. "But he was overruled by the White House, which cited the president's fondness for cream pie," Huffington Post writes.
Jobs also offered to to help create political ads for the president in 2012. Jobs had scotched a similar effort to craft Obama ads in 2008, when Isaacson claims that Jobs was unhappy that Obama strategist David Axelrod showed insufficient deference to the Apple honcho.
This and other political news is just the latest information to leak from the hotly anticipated book.
Another revelation that Isaacson has teed up for a "60 Minutes" interview featuring the biography this Sunday is that Jobs wished he had chosen sooner to undergo cancer surgery.
5 Ways the World Will Change Radically This Century
By Natalie Wolchover | LiveScience.com – Thu, 20 Oct, 2011In terms of evolution, the species Homo sapiens is extremely successful. The populations of other species that are positioned similar to us on the food chain tend to max out at about 20 million. We, by contrast, took just 120,000 years to achieve our first billion members, and then needed only another 206 years to add 6 billion more. According to the United Nations Population Division, our population will hit 7 billion on Oct. 31, and though fertility rates have begun to decline across much of the globe, we're still projected to reach 9 billion by mid-century and level off at around 10 billion by 2100.
A panel of academics met at Columbia University's Earth Institute on Monday (Oct. 17) to discuss the impacts of the human population explosion, including the ways in which it will change the face of the Earth this century. Here are five striking changes you — or your kids or grandkids — can expect to see.
Shifting people
Currently, it's a well-known fact that China is the most populous country in the world, and that Africa, though riddled with problems, is not necessarily overpopulated considering its size. These facts will drastically change. China's one-child policy has significantly curbed its growth, while in some African countries, the average woman gives birth to more than 7 children. [How Many People Can Earth Support?]
According to Joel Cohen, a population biologist at Columbia University and the keynote speaker at Monday's conference, India's population will overtake China's around 2020, and sub-Saharan Africa's will overtake India's by 2040. Furthermore, "In 1950, there were three times as many Europeans as sub-Saharan Africans. By 2100, there will be five sub-Saharan Africans for every European. That's a 15-fold change in the ratio," Cohen said. "Could you imagine that that might have an impact, geopolitically and on international migration?"
Jean-Marie Guehenno, former UN Under-Secretary General for Peacekeeping Operations and director of the Center for International Conflict Resolution at Columbia University's School of International and Public Affairs, said the migration of people from Africa to Europe will present a major challenge in the near future. "You can look at it as an enormous potential from a European standpoint … or you can say, '[Africa] is a continent that still has 15 percent that are not going to school,' and that can be seen as a threat," Guehenno said. "How are you going to manage that immigration so that this aging continent of Europe benefits from it while managing it? That is going to be a huge question."
Urbanization
Globally, the number of people living in urban areas matched and then overtook the number of rural people sometime in the past two years. The trend will continue. According to Cohen, the number ofpeople living in cities will climb from 3.5 billion today to 6.3 billion by 2050. This rate of urbanization is equivalent to "the construction of a city of a million people every five days from now for the next 40 years," he said.
Of course, new cities don't tend to get constructed; instead, cities that already exist tend to balloon. Guehenno argues that megacities become chaotic. "Urbanization is going to change the face of conflict in a big way. When you live in small towns and rural areas, there are all sorts of traditional conflict- resolution mechanisms. They are not all nice, but they create a sort of stable equilibrium," he said. "With the megacities that you see now in Africa, such as Monrovia (Liberia) and Kinshasa (Republic of Congo), we see cities where the dynamics are no more under control or have been lost. We are, I think, heading toward new types of conflicts — urban conflicts — and we haven't really thought through the implications of that."
Water wars
Not only has the human population exploded in the past two centuries, but the per-person consumption of resources — especially in industrialized nations — has grown exponentially. Scientists think that resource shortages will cause an escalation of conflicts during this century, and will widen the gulf between the rich and the poor — the haves and the have-nots.
No resource is more precious and vital than water, and, according to economist Jeffrey Sachs, director of the Earth Institute at Columbia, there are already parts of the world that, because of the rapidly changing climate, are at a severe crisis point. "Take the Horn of Africa for example: Somalia's population has risen roughly fivefold since the middle of the 20th century," Sachs said. "Precipitation is down roughly 25 percent over the last quarter century. There's a devastating famine under way right now after two years of complete failure of rains, and [there is] the potential that this is entering a period of long-term climate change."
Conflicts over water shortages will probably play out as class warfare, said Upmanu Lall, director of the Columbia Water Center. "Wealth inequality tends to grow as a country's population grows, and this is a very important point to note because per capita consumption of resources has been increasing dramatically. Couple that with inequity in income and couple that with [the issue of] the availability of water," Lall said. [How Much Water Is On Earth?]
When you add it all up, you get this dire picture: As the population grows, there is less water per person. Meanwhile, the gap between the rich and the poor widens, and the rich demand more resources to accommodate their lifestyles. Inevitably, they will commandeer the water and other resources of the poor. In all likelihood, Lall said, this will lead to challenges, and perhaps class conflict.
Future energy
Currently, there isn't enough energy being extracted from known sources of fossil fuels to sustain 10 billion people. This means that humans will be forced to turn to a new energy source before the end of the century. However, it's a mystery what that new source will be.
"Energy is the basic resource which underlies every other," said Klaus Lackner, director of the Lenfest Center for Sustainable Energy. "And actually, technology is not quite ready to solve the [energy] problem. We know there's plenty of energy in solar, in nuclear, in carbon itself — in fossil carbon — for probably 100 or 200 years (if we are willing to clean up after ourselves and pay the extra to make that happen). But none of these technologies are quite ready. Solar has its problems and is still too expensive."
Carbon storage — a technology that prevents carbon dioxide and other greenhouse gases from escaping into the atmosphere when fossil fuels are burned — is still on the drawing board, though it looks possible, he added. "And lastly, nuclear energy: if we were betting on that, we may have just lost that one," Lackner said, referring to the nuclear disaster in Fukushima, Japan, earlier this year.
"Let me just give you a feeling how big today our energy consumption is: In New Jersey, the energy consumption exceeds the photosynthetic productivity of the same area if it were left pristine," Lackner said. "We have to have technology help us out. I am optimistic … that the technologies can be developed to solve these problems … but I am a pessimist because we lack the societal structures which would enable us to employ these technologies, and we could very well fall on our own faces."
In short, the future will match one of these two pictures: Either some new, superior form of energy extraction (such as highly efficient solar panels) will be widespread, or the technology, or its implementation, will fail, and humanity will face a major energy crisis.
Mass extinctions
As humans spread, we leave scant room or resources for other species. "There is good evidence that we are in the sixth massive species extinction of the history of the planet, because of the incredible amount of primary production that we take as a species to maintain 7 billion of us," Sachs said.
Aside from the lack of land and resources left for other species, we've also caused rapid changes to the global climate, with which many of them cannot cope. Some biologists believe that with the current rate of extinction, 75 percent of the planet's species will disappear within the next 300 to 2,000 years. These disappearances have already begun, and extinction events will become more and more common over the course of the century. [10 Species Our Population Explosion Will Likely Kill Off]
Al Gore has harsh criticism for U.S. capitalism
Al Gore lampoons 'insane' Wall Street
AFP – Fri, 21 Oct, 2011
Former US vice president Al Gore on Friday said he understood the Occupy Wall Street movement's anger at some of the "insane" elements of US corporate and political culture.
The Nobel Prize winner, Apple board member and environmental activist provoked guffaws at a digital technology conference in Hong Kong with a withering attack on the worst side of US capitalism.
"What were they thinking?" he said of the bankers involved in the sub-prime mortgage bubble that burst in 2008, triggering a financial downturn that is still playing out in the form of economic turmoil around the world.
He said investigations showed that many of the traders and bankers whose decisions led to the disaster knew that what they were doing was "toxic", but they didn't care as long as they made a "quick buck".
They exchanged emails with acronyms such as LQTM, standing for "laughed quietly to myself", and IBGYBG, or "I'll be gone you'll be gone", in reference to the risks they were taking, he said.
Gore has previously thrown his support behind Occupy Wall Street, writing a blog earlier this month calling it a first step toward fixing a democracy in crisis.
He repeated the "broken democracy" argument in Hong Kong on Friday, but said capitalism remained the "best system".
"If we are going to be committed to capitalism, as I am, we have to make it sustainable," he said.
Gore served as vice president from 1993 to 2001 under Bill Clinton, then remained in the public spotlight through his environmental activism, including a starring role in the Oscar-winning documentary "An Inconvenient Truth."
He shared the 2007 Nobel Peace Prize with the UN Intergovernmental Panel on Climate Change.
AFP – Fri, 21 Oct, 2011
Former US vice president Al Gore on Friday said he understood the Occupy Wall Street movement's anger at some of the "insane" elements of US corporate and political culture.
The Nobel Prize winner, Apple board member and environmental activist provoked guffaws at a digital technology conference in Hong Kong with a withering attack on the worst side of US capitalism.
"What were they thinking?" he said of the bankers involved in the sub-prime mortgage bubble that burst in 2008, triggering a financial downturn that is still playing out in the form of economic turmoil around the world.
He said investigations showed that many of the traders and bankers whose decisions led to the disaster knew that what they were doing was "toxic", but they didn't care as long as they made a "quick buck".
They exchanged emails with acronyms such as LQTM, standing for "laughed quietly to myself", and IBGYBG, or "I'll be gone you'll be gone", in reference to the risks they were taking, he said.
Gore has previously thrown his support behind Occupy Wall Street, writing a blog earlier this month calling it a first step toward fixing a democracy in crisis.
He repeated the "broken democracy" argument in Hong Kong on Friday, but said capitalism remained the "best system".
"If we are going to be committed to capitalism, as I am, we have to make it sustainable," he said.
Gore served as vice president from 1993 to 2001 under Bill Clinton, then remained in the public spotlight through his environmental activism, including a starring role in the Oscar-winning documentary "An Inconvenient Truth."
He shared the 2007 Nobel Peace Prize with the UN Intergovernmental Panel on Climate Change.
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