Indeed, 2008 was the year about global economics and it is my contention, as well as the view of our think tank that 2012 will also be a year with global economics dominating much of the media. There are challenges all around the world, and I'd like to discuss a few these if I might.
One of the big challenges happens to do with Iran's nuclear weapons program, and the sanctions placed on that nation. Remember that Iran is a big oil exporter, and when the global community decided to do sanctions, it will hurt the economies of the world and raise the price of oil, causing more stress at a time when things are already tough globally.
Speaking of which the European Union will continue to be a slow motion train wreck, and the ECB will have to decide if it wishes to become a different kind of central bank with a lot more power, and if the member nations will be willing to go over that. In Asia, there are challenges with China's economy, not only inflation, but many other issues as well. Even if the economy slows down which it looks like it might, that doesn't mean prices will.
The challenges in Europe are affecting the United States and slowing our growth down to almost zero, although we are showing 1.8% GDP growth rate. I would submit to you that such estimates also have unknown factors, meaning they could be plus or minus 1.5% or practically zero. When the United States is firing on all cylinders, that high tide raises all boats, but we still have a drag on our economy namely the real estate market, and the unemployment issues.
The debt issues around the world are also going to be a challenge, not just in Europe but also in the United States. Corporate bonds have been doing well in the first quarter of 2012, but all these corporations with all that money in their coffers means that it's not flowing around for the consumer economy. As things appear to be getting back to normal in the United States, the federal government is still spending far more than it takes in. Cutbacks in the public sector after the election will also send more people to the unemployment lines.
If war does happen to break out this year in the Middle East, we will see a spike in oil prices, which will be a tax on all the economies of the world because everything moves by truck, ship, or plane. These are some of the issues and trends in global economics that we will see throughout this year. Please consider all this and think on it.