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Two Harvard economists, Lawrence Summers and Lant Pritchett, say China is likely to revert to the mean of average long term growth of developed countries after this spurt of growth is over. Growth is likely to slow to 6% by 2016, and revert to the mean of 2% for industrialized countries in the long term. Goldman Sachs banker Jim O'Neill, says the growth at a higher rate could be sustained because of urbanization. Summers does not rule out this outcome as he accepts a range of outcomes, with the most likely outcome being a reversion to the mean. The factors often cited for slowing growth are lower of productivity of capital as corruption and close connections determine where capital is allocated, misallocation of capital, large increases in credit in the economy since 2009 leading to bad debt in the financial system, aging society and demographics with increasing numbers of older people. Other reasons are the choices being made by Chinese leaders for slowing down to address the problems of air pollution and contamination of water supplies, inflation in housing prices, overdependence on exports, need to shift to increasing domestic consumer spending but unable to do this with the lack of spending power of large parts of the population because wealth is excessively concentrated in the upper ranks of society. The need to manage these forces ensuring some measure of stability depends on finding ways to reduce the growing concentration of wealth and power, in itself a challenge for the Communist Party elite. A combination of different factors with some still unknown factors are likely to play a part in this reversion to the mean for China, a situation encountered by every country so far in North America, Europe and Japan. This makes it even more important that each developing society structure its development around the most optimal goals with the least costs attached to the development....

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The WSJ Dollar Index , which shows the strength of the U.S. dollar against a trade-weighted basket of currencies, jumped up by 22% from July 1, 2014 to March 17, 2015, according to FactSet. Since that time the dollar has risen slowly by 2.7%. Scott Mather, chief investment officer, U.S. core strategies, PIMCO, says the dollar normally rises faster in the period when there is an expectation of rising rates than when the actual increase of rates takes place. Analysts say if the Fed raises rates in 2016 this could strengthen the dollar further, complicating the Fed's rate increase plans with slower increase in inflation. U.S. S&P 500 companies have reported lower earnings by 10-12% in the third quarter of 2015- when actual earnings dropped by only 1.5%- because of the stronger dollar, according to Binky Chadha, chief global strategist at Deutsche Bank. He says core goods inflation would have risen by half a percentage point more without the stronger dollar, meeting the 2% Fed target, had the dollar not strengthened....

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David Malpass is the choice of the Trump administration to head the World Bank. He has worked with Latin American countries at the State Department, was the Treasury official responsible for the World Bank in the Reagan administration, and worked on Argentine currency, China trade matters in the Trump administration.

Malpass negotiated a $13 billion replenishment for the World Bank in 2017, with U.S. share of $1.2 billion. This capped the bank's lending at $25 billion.

Last year the World Bank provided China with $60.5 billion in loans for 400 projects, which this WSJ editorial says is loans China does not need with its $3.07 trillion in foreign reserves. This editorial is critical of the current World Bank head Dr. Kim for taking a job with a World Bank partner the private equity fund GIP.

The World Bank has played a significant role in development for South Asia and China in the early years after World War II.

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According to the chief economist at IHS Global Insight, Nigel Gault, his models show that $500 billion of purchases by the U.S. Federal Reserve will increase growth in the U.S. by only 0.1% in 2011, and leave unemployment at 9% or higher for two years. Moody's Analytics and Macroeconomic Advisors also point to small impact of quantitative easing efforts of the Fed. One economist said that the Fed's taking interest rate to zero had not worked, QE1 has not worked either, and now its a serious question how much difference QE2 would make.

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Analysts are forecasting an average oil price of $106 for 2011, according to FactSet Research Systems. Brent crude is $110 a barrel in the third week of August 2011. This implies Brent crude has to be at an average of $95 for the remainder of 2011- suggesting a decline of 14% from todays levels. Share prices of European oil companies Royal Dutch Shell, BP, Eni and Total are priced for long term crude oil prices at $75 per barrel, according to Citi.

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A plan appears to have been put in place by the U.S. and the European Union countries to strengthen the American position in negotiations with Iran underway in Istanbul. The impact on oil prices and on U.S. and E.U. growth as a consequence of higher oil prices, especially when the eurozone countries faced lowed growth, was one of the ways Iran hope to blunt the tightening of sanctions against Iran's nuclear program. It now appears from information released by the International Energy Agency that a plan was implemented by the Saudis in recent months to build up reserve supplies. At the same time a similiar effort was being implemented to increase production in Iraq and Libya so that it would add to reserves added by the Saudis. Daily output from OPEC countries increased by about 1.4 millon barrels in the Sept 2011- March 2012 period, as the confrontation with Iran took shape with increasing pressure using sanctions on Iranian oil, according to the IEA. Of this 1.4 million barrels a day increase, one third is from the Saudis and the rest from Iraq and Libya, according to IEA. In March 2012, OPEC oil production increased by 135,000 barrels a day to 31.4 million barrels, mostly from higher output in Iraq. The Saudis have filled up domestic oil inventories and placed an additional 10 million barrels of oil in storage close to markets in Europe and Japan. This suggests that this was part of a quietly implemented plan in cooperation with the U.S. and the EU countries to increase the effectiveness of sanctions and protect global oil supplies from disruptions; even as the U.S. pressured Japan, S. Korea, India and other countries to reduce purchases of Iranian oil. The economies of India, the EU and other countries were already beginning to feel the impact of higher oil prices in the 1st quarter of 2012....

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IMF economist Oliver Blanchard, says the euro's depreciation vis-a-vis the dollar "would be a good thing." Because "in a way Europe needs it more than the U.S., and the U.S. could probably offset it in some way." The IMF forecast is for a 0.3% contraction in the eurozone in 2012 and growth at 0.7% in 2013. Blanchard says a drop in the euro exchange rate of 10% would normally boost growth in GDP by 1.4%.

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Standard and Poor's changed its rating of U.S. Treasury securities from stable to negative. U.S. Treasury securites are still rated AAA. Moody's made no change in the rating. U.S gross debt as a percentage of GDP is 91.6%, with the comparable number for Germany at 80%, France 82%, Canada 84%, the UK at 77%, Japan 221%. The U.S. budget deficit as a percentage of GDP is 10.6%, the comparable number for Germany is 3.3%, France 7%, Canada 5.5%, the UK 10.4%. John Chambers, the head of the sovereign ratings committee at Standard & Poor's stated that "the sign of political gridlock was a key determinant in our outlook change." The budget deficit will go up to $1.5-$1.65 trillion, or over 10% of America's GDP in 2011. The gross debt for the U.S. is at $14.219 trillion, just short of the $14.294 trillion cap. With rising entitlement costs and the interest on debt this is expected to go over the debt ceiling as early as July 8, 2011. Again political gridlock and the divide between Republicans and Democrats about deficit reduction is causing concern about the delay in raising the debt ceiling....

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The Trump administration proposes a zero policy for Iranian oil imports which says the U.S. will grant zero exemptions to countries importing Iranian oil.  Big importers China and India are likely to resist this policy.

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China's GDP growth for the 4th quarter of 2012 was 7.9% over prior year, increasing from 7.4% in the third quarter of 2012, according to the National Bureau of Statistics. GDP growth for 2012 was 7.8%, down from 9.3% in 2011. Growth is stabilizing at 8% which shows China is managing the economy, slowing the growth rate with a smaller stimulus planned in 2013, and working on sustainable growth for the longer term. This is a significant positive as a new leadership takes over in China and sets priorities for stable growth, and improvements in housing and health care.

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The lower house of the French parliament approved the EU budget discipline treaty that limits deficits to 3% of GDP. It passed with a large majority of 477 votes to 70. About 284 members of the left parties voted for the bill. Sarkozy had pushed for passage of this treaty and Hollande agreed to it in his talks with chancellor Merkel of Germany. At the same time Germany and France agreed on promoting growth measures. The new French budget for 2013 reflects this committment to reducing the deficit to 3%. France's deficit declines from 4.5% in 2012 to 3% in 2013 under the new budget. It does this with shared sacrifices and higher corporate taxes and without sharp cuts in government spending that could hurt the economy.

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Krugman says the kind of spending on helping the US economy never happened. That is relative to the size of the US economy, not much happened uder the Obama administration. As evidence, he cites the figures that total government payrolls have declined by 350,000 since January 2009. And he says government purchases of goods and services increased only by 3% in the last 2 years.

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The problems divergence between developed and developing economies creates for companies- in slow growth on one side and fast growth with asset bubbles on the other side.

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U.S. unemployment declined to 7.7% in November 2012 from 7.9% the prior month, with 146,000 jobs created, according to the Labor Dept. The rate for the prior two months was revised downward by 49,000 jobs. The labor force dropped by 350,000 jobs, with fewer people looking for work, which suggests continued problems in finding jobs. The number of people saying they had a job fell by 122,000. The retail sector added 53,000 jobs, leisure and hospitality 23,000 and professional and business services 43,000.

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Over the last ten years average growth in real per capita income has averaged 1.6%, with declines only in two years of the last twenty years, 2008 with the global financial crisis, and in 1991 a year before President George H.W. Bush lost the election to Clinton. A forecast by Mark Zandl of Moody's Economy.com shows real disposable income per capita is expected to increase by 0.4% by the end of the third quarter of 2010 from a year earlier. This will show up in consumer spending and will weaken the recovery. It is also likely to be reflected in elections in the latter part of 2010.

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China's GDP growth for the second quarter of 2012 was 7.6% from the prior year. China set a target of 7.5% GDP growth in March 2012. About half of the GDP growth in 2011 was generated from investment spending. As part of a new Stimulus China is increasing bank lending and moving forward development projects in energy and infrastructure. Bank loans showed an increase from 793 billion yuan ($124 billion) in May 2012 to 920 billion yuan ($144 billion) in June 2012.