Friday, April 17, 2009

Book Review: Global Future Analysis (2008) by Planck Foundation

Global Future Analysis (2008) by Planck Foundation,

Summary of findings:

1. Rising energy prices would adversely affect transportation, mobility and tourism. It will push up prices. Rising inflation without rise in effective demand would lead to stagflation.
2. Price of resources like ‘crude’ would go up due to fall in supply and rise in demand.
3. Credit crisis has squeezed demand, thus, affecting economic growth and leading to stagflation. Instead of holding their assets in currency or stocks, people prefer gold.
4. Water crisis has become prominent in Midwest of USA, South of Europe, China, large parts of Africa, the Caucasus and the Middle East. Water crisis can give rise to food crisis and food price inflation.
5. Lack of banking regulation has affected the US economy. The report has criticized the role of former Treasury Secretary Paulson to bail out the irresponsible banks (with a sum of US$ 700 billion) under the Troubled Assets Relief Programme (TARP).
6. The Report points out that the credit crisis, the energy crisis, the water crisis and the mineral crisis have given rise to the food crisis, the economic crisis (stagflation), the currency crisis, the governmental crisis and the geopolitical crisis.
7. The world has really become flat because there exists no difference between the First and Third World.
8. A rare kind of socialism where profits are privatized and losses are socialized has come into being after the bailout measures undertaken by the Bush regime.
9. The derivative market is worth more than US$ 51.6 trillion.
10. Iceland, like Russia, has faced the currency crisis. The trade deficit of Iceland has increased over the years. Switzerland, Hungary and Ukraine are going to face similar currency crisis.
11. The local Raiffeison model of co-operative banking can become the business model in the future.
12. Apart from the TARP, the Fed has lent more than US$ 2 trillion to banks. The Fed is not ready to disclose to which banks, and under what conditions, the capital has been lent. It is now part of Fed’s ‘trade secret’.
13. The main cause behind the credit crisis is the presence of credit-based economy instead of a production-based economy. In the recent times, there was more emphasis on consumption led boom instead of a production based one. It is production, which provides more power to the economy.


1. The size of the document is huge. It comprises of 207 pages.
2. There are lots of grammatical errors, which make it difficult to read the Report. Wish the hard copy of the publication has been properly edited, before coming out as a book.
3. One would face hurdles while going through the Report due to lack of illustrations and graphs.