Archive for year: 2016

Underrated Mexico, Rise of Chinese Robots and Man Vs. Machine II

We averted our eyes this week from the solar eclipse, presidential debates and the latest episode of The People Vs. O.J. Simpson just in time to provide the long awaited write-up on Mexico’s underrated economy, tell you which country is most at risk to a robot attack and provide the latest on man vs. machine in Korea. So even as we battled a flooded basement and celebrated the 7th anniversary of the U.S. bull market (we just deleted The 7 Year Itch from our Netflix queue), it’s this week’s International Need to Know, where we shine the sun’s non-eclipsed warm rays of economic enlightenment on the crucial happenings of our little globe.

Without further ado, here’s what you need to know.

Underrated Mexico

We’ve been teasing for a while that we would provide more info on Mexico’s underrated economy. It’s time to head south. Did you know Mexico’s economy is bigger than Canada’s at $2.2 trillion to our neighbor to the north’s $1.6? Or, how about the fact that nearly 40 percent of auto jobs in North America are located in Mexico? Mexico’s economy is bigger and more robust than most people realize. In real estate it’s all about location. It can be helpful in economies too. Mexico is the 15th largest exporter in the world due in large part to being next door to a bunch of ravenous American consumers. Nearly 80 percent of Mexico’s exports are to the good ole United States. In fact, Mexico is the United State’s third-largest trading partner (behind only Canada and China). And although voters in Michigan don’t want to hear this, Mexico is the United States’ second-largest export market. And what Mexico makes and exports is impressive. Mexico is a big exporter of high tech equipment, exporting 19.3% of its GDP in high-tech products. That’s third best in the world, trailing only South Korea and Germany but ahead of China. Of course, Mexico does face challenges. In certain provinces, violent crime is high, but as we noted a few weeks ago, most of the country is as safe as Finland. Low oil prices are affecting Mexico’s economy but in the long run that’s a plus, as it will force the country to continue to diversify its economy. There is also an inequality problem that has worsened over the last decade. According to Forbes, “In 2002, the assets of Mexico’s elite 16 were worth 2% of the country’s GDP. By 2014 these private fortunes accounted for 9% of GDP.” Mexico is not perfect but it has been operating under the radar–it’s economy is stronger , more developed and bigger than people realize.

Rise of the Robots…in China

We’ve discussed innovation in China, we’ve delved into their economic slowdown (more foreboding economic data came out this week showing a continued decline in exports and imports year over year in China–exports were down 25%!), but one thing we haven’t talked about is robots.  As you see in the chart below, starting in 2012, about the time worker abuse controversies were making news, the use of robots started to really take off. What does increased and more sophisticated automation mean for China’s economy’s future? For the world’s? We’re going to find out soon.*


Man Vs. Machine, Round Two!

In a recent INTN, we told (warned?) you that artificial intelligence made a big breakthrough when Google’s AlphaGo beat a ranked Go (an ancient Chinese board game)player not through brute computing power but by using neural net technology.  And, we told you to keep an eye on an upcoming match pitting the computer against the top ranked Go player in the world, Lee Sedol.  The first two games of the 5-game match took place in Seoul yesterday and this morning with Alpha Go winning both and taking a commanding 2-0 lead.  Can Sedol make a comeback?  Have computers again permanently surpassed us in another human realm thought safe from machine?  Grab a beer, make some nachos and let’s get ready to rummmmbbble (while the computer quietly whirs). You can watch the matches live here.

*International Need to Know is one hundred percent written by humans…at least so far…as you know.

Innovative China, Its Slowing Economy and a Mexican Appetizer

International Need to Know ditched the winter blues to see the funk, hip-hop, neo-jazz New Orleans band, Galactic, at a local club and discovered in the opening band, Con Brio, a rising star full of youthful rhythm and blues vigor (the lead singer is known to do an occasional backflip when performing). But even a musical Ferdinand Magellan moment did not distract us from answering last week’s question about China, raising new worrisome ones, revealing who is number one at the box office, and providing Donald Trump’s least favorite statistic. So even though Chris Christie is unlikely to endorse us, it is this week’s International Need to Know, where we bust some international economic moves, Con Brio-style, on the world stage.

Without further ado, here’s what you need to know.

The Yang: Why China has Become Innovative

As we learned last week, despite difficulties, lots of good things are happening in China, including companies innovating, not just copying. But how did this happen? We promised we would tell you why they’ve become an innovative economy and unlike presidential candidates we here at INTN always fulfill our promises. The answer, of course, is scale. Yes, China is big and that matters.  For example, China has as many 4G phone users as the entire U.S. population. There are more than 500 million mobile internet users in China. These mobile users are young with the average age 15 years younger than the average U.S. user. To service this enormous, young user base, Chinese companies have to innovate. Yes, Chinese companies have been protected from foreign competition but despite that, the sheer scale of the market has forced them to innovate.  A population of 1.3 million, a middle class of 150 million – 260 million (depending on whose counting), compels companies to meet market demands with new innovations. You gotta give the people what they want. Here’s your bonus how-large-is-China statistic: for the first time ever, China’s monthly box office receipts were larger than North America’s thanks to the smash hit, The Mermaid. Regrettably, this is unlikely to spur innovation in Hollywood.

The Yin: China’s Economy is slowing

New underlying economic data raises fears that China’s economy is growing at a much slower pace than the official 6.9% GDP growth rate. China’s purchasing managers index for manufacturing dropped to 49 in February. Anything below 50 indicates contraction. In fact, this is the lowest level since January 2009, which was smack dab in the middle of the world financial crisis. It’s not just manufacturing. The services PMI has also slowed to 52.7 from 53.5 in January.  This is still above 50 but is nonetheless at its lowest level since December 2008. Another sign that jobs are not as plentiful as they were before, at least not in the developed cities, is that for the first time in 30 years the migrant population has decreased, by 5.7 million in 2015. We’ve noted before that imports are down and beer sales too. Given the preponderance of the evidence, it is very difficult to believe that the economy is growing 6.9%. The question remains of whether this is a normal business cycle recession? Despite opinions to the contrary in recent years that China is invulnerable to business cycles, China is not the Golden State Warriors and President Xi is not Stephan Curry, China is going to lose every once in a while. Or, is there something deeper afoot? We’re scared to end up like Alice but soon INTN may dive into the China banking system rabbit hole to find out what is really happening.

A Mexican Appetizer

We teased you a few weeks back when talking about the relative lack of crime in most of Mexico that we would come back with more on their underrated economy. And we will, but for now, in honor of a certain presidential candidate frontrunner, we leave you with this chart on net migration between Mexico and the United States. Go ahead and peek, there has been zero net migration from Mexico since 2008. In fact it’s slightly in the other direction. Maybe Mexico willpay for that wall to be built to keep us out of their country?


Oil, China’s Innovations and the Most Popular Person in the World

You may hope that what happens in Vegas stays in Vegas, you may wish that Chris Rock puts Hollywood in its place on Sunday, you may leap to conclusions about what you’re going to do with an extra day in February, but rest assured that regardless of your hopes, wishes and leaps, we will provide answers on Saudi Arabia’s ability to control the price of oil, China’s role as a copy cat or innovator and who is the most popular person in the world. Yes, even if it means we end up in Gitmo just before closing time, it is this week’s International Need to Know, the road less taken to key global knowledge.

Without further ado, here’s what you need to know.

Greasing the Skids of Oil

Some worry that OPEC will try to increase oil prices by limiting supplies. Yesterday Saudi Arabia threw cold crude on the idea, claiming it is willing to let oil go down to $20 per barrel to drive other producers out of the market. Can Saudi Arabia control the market price?  Is there a supply-side solution to low oil prices? Here’s a table of the largest oil producers’ share of worldwide oil production since 1980.


If I was betting, and if you’re in the stock market you’re already gambling on oil, I’d guess that OPEC and Saudi Arabia will find it difficult to drive up prices by freezing production, at least in the long term. Perhaps they can have a short term effect, but it will be short-lived, as more production will come on-line quickly. And, as we noted in this space previously, we are nearing peak oil consumption. The laws of supply and demand are not in Saudi Arabia’s favor in the medium-to-long run.

Yes, China Innovates

When I was in China recently I was reminded of the misperception that China only copies, it does not innovate (loyal readers know INTN’s distaste for perception over reality). During the trip, we saw amazing innovations in mobile apps, mobile phone technology and plant genetics, to name just a few. I ate millet that grows in extreme weather with less water, played with phones that had more features than a Tim Cook-FBI mashup and saw new ways to monetize social media services. AsConnie Chan notes, Chinese companies’ innovation is being rewarded: “last year, investors both in and out of China deployed $37 billion into Chinese startups (more than double 2014 and more than 8x of 2013).”  Sure this may indicate a bubble but unlike, say, real estate bubbles, technology effervescences generally only happen in innovative places. North Korea would kill for a bubble. Come to think of it, they may just kill for kicks. Argentina would be delighted to have a technology bubble; it would mean they are home to lots of innovative companies. Technology bubbles are dangerous but they are also a sign you have a strong base of innovative technology companies. Count China as one of those with a strong base. China has many economic problems and challenges, but as Jay-Z says when commenting on the Chinese economy, innovation ain’t one of them. Next week we tackle why Chinese companies were forced to innovate.

Who is the Most Popular Person in the World?

With good reason it is neither you nor me   But now you can explore the rankings of the most globally known athletes, artists, mathematicians, business people and other “cultural producers.” It’s all courtesy of the good folks at MIT. The number one most globally known human in the world according to MIT?  That old philosophical rascal Aristotle. Even as we quibble with their methodology, in the meantime pour yourself a Belgian beer, Chilean wine or Seattle organic, fair trade coffee and delve into the rankings. Here’s a teaser: the 10 most globally known musicians since 4000 BC*:

1. Jimi Hendrix

2. Bob Marley

3. Bob Dylan

4. John Lennon

5. Louis Armstrong

6. Paul McCartney

7. Niccolo Paganini

8. Franz Liszt

9. Eric Clapton

10. Ray Charles

*There’s a lyre player from ancient Mesopotamia whose gotta big beef with this list.

Negative Rates, World’s Fifth Most Important Graph, Taylor Swift and the NIKKEI

As we savor the banana pudding we ate at Roux restaurant on Valentine’s Day, rue that we are not joining pitchers and catchers this year, and mourn the passing of both a supreme court justice and the last vestiges of civility in political campaigns, we examine the list of countries with negative interest rates, ponder the world’s fifth-most important graph and wonder at the relationship between Taylor Swift and the Japanese stock market. Yes, even at the risk of being the target of a crazy Kayne West tweet, it is this week’s International Need to Know, your loving guide to matters of the world that count.

Without further ado, here’s what you need to know.

Why Are You So Negative?

Is 2016 the year of the negative interest rate? A few weeks ago the Bank of Japan instituted negative interest rates and Sweden recently joined the monetary party too. Here’s the growing list of countries currently with negative interest rates:

  • Bank of Japan: Rate is minus-0.1 percent for some reserves
  • Danish National Bank: Deposit rate is minus-0.65 percent
  • European Central Bank: Deposit rate is minus-0.3 percent
  • Swedish National Bank: Main interest rate is minus-0.5 percent
  • Swiss National Bank: Main interest rate is minus-0.75 percent

Some think Canada, Norway, Israel and even the UK may soon join in the fun. The fantastically named Robin Wigglesworth, an editor at The Financial Times, tweets “that eurozone banks are down 41% since ECB introduced negative interest rates…and Japanese bank stocks have done worse this year than in the 6 weeks following Lehman collapse.” So the question is will the negative interest rate policies work? If more countries join the parade will it have an effect on those already using negative interest rates? Does it signal we have entered a new economic era? These are some of the most important economic questions we can ask. And, we don’t have the answers. Sorry!  But we hazard a guess that even those who think they know the answers should listen to Noah Cross from the movie, Chinatown—“You may think you know what you’re dealing with, but, believe me, you don’t.”

The World’s 5th Most Important Graph

What are the top four?  Oh I’m sure we’ll cover them at one point or another here at INTN, but for now let’s concentrate on number 5. Below you see that the working age population for much of the world is either flat, decreasing or increasing at a much slower rate than previously. That makes achieving a fast growing economy more difficult and has implications for countries who want to export. There are less of the people who do the most buying and producing.  GDP growth is built on such people.  There are two big exceptions to this demographic trend: sub-Saharan Africa and India. It will be interesting to see if they can propel world economic growth or whether their other challenges will hamstring their economies despite a growing working age population.


Taylor Swift and the Japanese Stock Market

Planning your investments? Here’s a not so fun factoid. On December 1, 1989, the Nikkei closed at 38,916. Twelve days later, Taylor Swift was born and the Nikkei has never come close to those heights since. In fact, nearly thirty years later, even after large increases since 2012, the Nikkei is at 16,022, still less than half what it topped out at. Unlike Kanye, we don’t blame Taylor Swift for the Nikkei’s inability to fully recover. We do remember, however, that the experts say invest for the long-term. It’s been a long time.  With Japanese exports decreasing at the largest rate since the financial crisis (more evidence of a slowdown in the Chinese economy) and Japan’s population decreasing (5th most important graph!), it will be longer still.    


Iran’s Opening, China’s Consuming and Safe Mexico

In a week that again saw markets more wobbly than a Peyton Manning pass, caught us picking up stray Mardi Gras beads while dreaming of Kermit Ruffins and surprised us when we ran into both Adam Sandler and Jeff Bezos in a bar in Seattle, we still kept our laser focus on the possible promising market of Iran, the location of the world’s largest middle class and the safe harbor of Mexico. It is, of course, this week’s International Need to Know, the furthest thing away from a bad Adam Sandler movie that our crazy, complicated world can comprehend.

Without further ado, here’s what you need to know.

Iran Open for Business?

The nuclear agreement with Iran is a big deal for all sorts of reasons. Economics is one of them. Because Iran has been so problematical for so long some basic facts about the country are often forgotten. For one thing it’s a larger market than most people realize. With a population of 78 million, Iran is the 18th largest-country in the world, bigger than the UK, France, South Korea and Italy. It’s also geographically large, the 17th-largest country by area in the world. The stereotype of a Middle East country is one of vast desert expanses, the opening of a David Lean movie. Certainly for Iran the stereotype misses the mark. Iran in many areas is mountainous with the Zagros Mountains dividing the country in half. In fact, there is good skiing in Iran we are told, though the knees here at INTN no longer abide such sports. It is also a highly educated society and like in the United States and most Western countries, more women are attending college than men nowadays. In other words, if Iran ever truly opens up, it is an excellent and intriguing market to do trade and business in. Ah, but always that darn word, “if.” Europe and Asia are acting as if the word is “when” with Airbus selling airplanes to Iran and the Iranian Finance Minister welcomed in a recent visit to Japan.  And Iranian business people are beginning to explore possible business opportunities internationally, including here in the United States. We ourselves have been contacted by an entity in Iran about possible collaboration and we hosted someone from Iran last summer in Seattle who was beginning to explore what is and is not possible. It’s definitely worth keeping an eye  on “when and if” those two uncertain conjunctions.

When Consumption is Not a Disease

In a Jane Austen novel people were always dying from consumption. Not today. Now companies are dying to find the biggest consumers. That’s why China, for all its problems, false data and complicated markets, is as alluring as Fitzwilliam Darcy or Emma Woodhouse. China’s middle class is now larger than America’s as you see below. It is the lever by which China is hoping to transform its economy from investment to consumption. Let’s hope they don’t end up like a Jane Austen character taking to their bed faint during the economic transformation.

China Middle Class:      109 million
U.S. Middle Class:         92 million

To be safe, go to Mexico

Perception is more important than reality is one of my least favorite sayings. In our estimation it’s an excuse to be lazy. For example, everyone thinks it’s dangerous to do business in Mexico. That’s the popular perception but what is the reality? Other than a few states—Chihuahua, Guerrero and Sinaloa—Mexico is as safe as that notorious den of violence and crime that is Finland. It’s certainly safer than the United States which has higher rates of murder and assaults, not to mention presidential candidates every bit as fanciful as Mexico’s. In fact, as the chart below shows, you are far more likely to be kidnapped in Canada then Mexico. Perhaps you should be avoiding Winnipeg rather than Guadelajara. So cut Mexico a break the next time you’re thinking of where it is safe and easy to do business. More on Mexico’s underrated economy in a future International Need to Know.


Top Protectionist Countries, AI Go and China in Africa

This week at International Need to Know while political eyes shift from one state’s corn fields to another’s granite quarries, we focus on the world’s largest protectionists, computers playing ancient board games and one possible cause of slowing growth in Africa. Welcome to this week’s edition of International Need to Know, your go-to place for understanding this mixed-up, muddled-up planet we call home.

Without further ado, here’s what you need to know.

The World’s Top Protectionist Countries

Ever since Smoot met Hawley for an American-made beer (unbeknownst to them served in Irish-blown glass) in some dark corner of Washington, D.C., economists have warned of the dangers of protectionism.* But who are today’s greatest protectionists? The Economist Intelligence Unit lists the top ten countries with the most protectionist policies among the G-20 major economies. Your mileage on their methodology may vary.

1. Russia

2. Argentina

3. India

4. Brazil

5. Indonesia

6. Germany

7. USA

8. Japan

9. China

10. Italy/UK

*What? You don’t believe Smoot and Hawley drank beer in Irish-made glass?

Go Dog Go

Last week we noted in passing (no pun intended) that artificial Intelligence pioneer Marvin Minsky died. In what perhaps could be a sign of intelligence in the universe, a significant milestone in AI was achieved that same week when for the first time a computer beat a highly ranked player in the ancient Chinese Board game, Go.Bloomberg tells us that Jon Diamond, the head of the British Go Association (not to be confused with the UK Go Go Association), didn’t think this would happen for another five to ten years, “It’s really quite a large, sudden leap in strength,” he said. In addition to it happening sooner than we humans expected, the other significance of this milestone is how the computer achieved the victory. Computers beating humans in chess is done through brute processing power. However, Go, which has 200 choices per move, is more complicated than chess in which there are only 20 choices per move. In playing Go, the computer won through the use of neural networks that learned from human players and then gained further knowledge by playing itself a multitude of games. Such a learning process lends itself to applications in disciplines perhaps more useful than playing Go, such as health care, economics and autonomous vehicles. Last week’s victory was against the 675th ranked player in the world (INTN is ranked 70,567,356th).  A bigger test looms. In March, the computer will play the world’s best human player in a match that will take place in Seoul, Korea.  We here at INTN will be watching.

File Under Correlation or Cause?

In 2015, Africa’s GDP grew at its lowest rate since 1995. The continent’s GDP growth rate was only 3.6% last year. According to the Washington Post, “China accounts for more than 40 percent of exports in more than a half-dozen African countries, including Zambia, Angola, and Sierra Leone.” How much is China’s economy slowing?  How much is that affecting Africa? These are not unrelated questions.

Africa’s GDP Growth


The Wandering Yuan, Largest Employers and China’s Trade Partners

This week at International Need to Know as we mourn the death of a pioneer in artificial intelligence*, Fish and all non-Golden State Warrior teams in the NBA, we also examine just how much the Yuan has devalued, who are the largest employers in the world and the extent of China’s dominance as a trade partner. Welcome to this week’s edition of International Need to Know, providing the facts and figures needed to understand our rotating orb.

Of course, if you don’t want to know, just hit “unsubscribe” at the bottom or reply to this email and I’ll remove you from the list. Alternatively, if you want others to be in the know, hit “tell a friend” which can also be found at the bottom. Without further ado, here’s what you need to know.

The Wandering Yuan

You often hear folks express concern about China unfairly devaluing the Yuan. We here at International Need to Know are always skeptical about the utility of devaluing currencies to promote one’s exports  In China’s case, we are skeptical they are devaluing much at all.  As you see in the graphic below, it’s those darn Canadians and Mexicans whose currencies have greatly devalued against the dollar over the last 12 months. Of course, that might have something to do with the drop in oil prices not currency manipulation. The Chinese Yuan dropped against the dollar at roughly the same rate (5.6%) as the British pound. Clearly it’s time to introduce trade sanctions against the UK.  Will China purposefully devalue the Yuan this year to export more?  China is a large exporter but in order to export they have to import. That smart phone or tablet you’re reading this on? It may say “made in China” but probably 70 to 90 percent of its components came from outside China. If China suddenly devalues the Yuan, the cost of imports will rise making goods assembled in China more expensive which will counteract any advantages from cheaper exports. The knee bone is connected to the… Now, whether the Yuan will suffer devaluation for market reasons ala Canada and Mexico? That’s a more important question.

The Largest Employers in the World

We should celebrate those who want to employ us, right? Well, via Ian Bremmer, here are the world’s largest employers.

World’s largest employers (workforce #)

1. U.S. Dept of Defense: 3.2m

2. People’s Liberation Army: 2.3m

3. Walmart: 2.1m

4. McDonald’s: 1.9m

5. UK NHS: 1.7m

It’s interesting to note that Walmart perceives Amazon (151k employees) as its biggest competitor and many U.S. politicians perceive China as America’s.  One also wonders if every time an order of McDonald’s fries are sold in Liverpool whether UK NHS hires another employee.   

Traders to the World

Why is the slow down in China such a big deal?  A whole lotta reasons but here’s one via Connectography: 

  • Countries for which China is the largest trading partner: 124
  • Countries for which America is the largest trading partner: 56

   *Stand by in next week’s INTN for news of a big advancement in AI

Peak Globalization, A Solar Moore’s Law and Cheap Phones

This week at International Need to Know we light up your life with the exponential growth of solar energy, darken it with the decline in world trade and note where the cheapest and most expensive phone bills are in the world. Welcome to this week’s edition of International Need to Know, your global gift of information and data.

Of course, if you don’t want to know, just hit “unsubscribe” at the bottom or reply to this email and I’ll remove you from the list. Alternatively, if you want others to be in the know, hit “tell a friend” which can also be found at the bottom. Without further ado, here’s what you need to know.

Peak Globalization?

Since World War II, world trade has grown at a faster rate than world GDP. In fact, according toBernard Hoekman at the Robert Schuman Center, “Global trade increased 27-fold between 1950 and 2008, three times more than the growth in global GDP.” Global trade grew even faster than GDP during the period from the early 1980s to mid-2000s thanks in large part to China’s reintegration into the global economy and the fall of the Iron Curtain. But the world has changed the last ten years. Even before the financial crisis, trade growth has been below GDP growth. So, the trade to GDP ratio, after rising from 25% in the 1960s, is now stuck at 60% today and falling. Is this peak globalization? Probably not, globalization is more than trade, it’s investment, immigration, cultural transference and more. But, at least for the moment, world trade is not driving the economy. In fact, in a worrisome sign, world trade has been shrinking in recent months. More on that soon.


A Moore’s Law of Solar Power?

We alluded to this in last week’s INTN (the latest hip acronym—memorize it, use it)—solar power is increasing rapidly. In fact, the amount of solar generation is doubling every two years or so. The futurist Ray Kurzweil pointed this out in the late aughts and yours truly decided to track solar power and see if Kurzweil, to use a technical term, is full of it.  Well, at  least in this regard, Kurzweil is on track—the solar power increase  phenomenon continues as you can see in the graph below from the International Energy Agency (IEA). As solar costs continue to decrease and as finally there are real strides in energy storage technology, it seems likely this exponential rate of growth will continue. If this doubling continues, then by the 2030s (not that far from now if you think about it—sure at current rates most rock gods will be dead, but Keith Richards is likely to still be alive), basically all our energy needs could come from solar generation and storage. This will have a profound impact on our economy, jobs, stock market and efforts to combat climate change. Something to keep in mind as that same mind reels from today’s falling oil prices, stock markets and rock idols.

Expensive Smart Phone Bills? Move to Iran

I’ve managed to use a question mark in every headline. Question marks are an under utilized punctuation in human discourse. To paraphrase the Atticus Finch of modern lawyers, Dean Strang, much of what ails us is certitude. At any rate, International Need to Know is amazed at his monthly smart phone bill. But, it could be worse, he could live in Tuvalu (for those not acquainted, it’s a Polynesian island nation and also would be a great lyric for a 1960s R&B song), which has the most expensive monthly phone usage costs. Or we could save some Rial and move to Iran, the third cheapest place to have a phone. For your travel and shopping pleasure we present the top ten cheapest and most expensive places for phones.



Real Peak Oil, Self Driving Cars and Beer, Star Wars and China

Welcome to this week’s edition of International Need to Know–three pieces of information that will help you understand this complicated globe we call home. Even as we mourn the loss of Major Tom to other environs, this week we look at Peak Oil (not what you’re thinking), the future of the automobile and what beer sales in China portend.

Of course, if you don’t want to know, just hit “unsubscribe” at the bottom or reply to this email and I’ll remove you from the list. Alternatively, if you want others to be in the know, hit “tell a friend” which can also be found at the bottom. Without further ado, here’s what you need to know.

The Real Peak Oil

Ten years ago or so it became fashionable to worry about peak oil, the idea that we were soon reaching the moment of maximum rate of extraction of black gold. It’s a legitimate worry since at some point we’ll run out of the stuff, right? But whether we have or will soon reach peak rates of extraction, we have now reached peak consumption of oil in the United States. In fact, as you see in the graph below, U.S. oil consumption was lower in 2014 than it was in 1997. Couple this data with the fact that we are seeing steady improvements in electric car battery technology, exponential increases in the use of solar energy (a subject for a future Need to Know) and it appears oil’s expiration date looms. We have not yet reached peak oil consumption worldwide but I wager we will be there soon. No, really, last year I made a bet with Stand Up Economist Yorum Bauman  that we will reach peak oil consumption within 10 years. Any other takers?


Money Flowing into Self-Driving Cars

Speaking of cars (or at least of the fuel we once put in them), perhaps you are reading this on your smart phone while driving. If so, cut it out. But, in the much sooner future than you think, you can safely read International Need to Know in your self-driving car. It was announced last week that Lyft raised $1 billion, with $500 million coming from General Motors for a partnership on self-driving cars. Uber is in this game as is Google as is Microsoft along with our international friends, BMW, Toyota and others. And two days ago, Tesla announced its new Summons feature  and outlined their road to fully self-driving cars. Last month while visiting Chinese electric automaker BYD in Shenzhen, I saw a demonstration of their self-driving capabilities. All over the world the drive is on for fully autonomous vehicles.  What’s that line from Poltergeist? “They’re here…”

Beer, Star Wars and China

Figuring out China is tough since the official statistics are like NFL referees, neither overly accurate or helpful. But there is other data that might tell the real story. To paraphrase Deep Throat, follow the beer.  According to U.K. beer-research firm Plato Logic (how do I get a job there?), beer sales in China last year were flat (though the beer itself had a good head). Until last year, beer sales averaged 6% growth for over a decade. If beer is a good barometer than growth is likely much lower than the official GDP growth rate of 6.9%.  On the other hand, the new Star Wars movie had the biggest film opening in China history so folks in China do spend on some luxury items. But still we ask how fast is the Chinese economy growing and more important how fast will it grow this year?  You must use the Force to determine whether the beer glass is half empty or full.

World Debt, Electric China and the World is Getting Richer


Welcome to the inaugural edition of International Need to Know. Each week we’ll send you three pieces of information you need to know about what’s going on in the world. Our little globe is small and no matter where you are or what you do, you know you need to know what’s happening in the global economy. We’ll try to avoid the headlines (but a heads up: we don’t follow any hard rules here at Intl Need to Know) and tell you some under told stories and data. And, we’ll try to make knowing fun.

Of course, if you don’t want to know, just hit “unsubscribe” at the bottom or reply to this email and I’ll remove you from the list. On the other hand, if you want others to be in the know, hit “tell a friend” which can also be found at the bottom. Without further ado, here’s what you need to know.

World Debt

Markets have begun 2016 like they had a few too many at their gilded New Year Eve’s parties and are still reeling from the hangover. But fortunately if there is economic trouble ahead we have deleveraged and there is plenty of room to combat slowing economies, correct? Well, Eurofautlines tells us that total public and private debt to GDP for the world is 265%. It was only 220% at the height of the financial crisis. That percentage will likely rise in the coming year as countries try to pump up their slowing economies. Whether that’s good or bad, we leave to you armchair economists.

Electric China

This title would be a good name for an EDM band but what we’re talking about are electric car sales. When I was in China a few weeks ago, the government issued a red alert on air pollution in Beijing. Well, perhaps some optimistic news is that in the first 9 months of 2015, 135,000 electric cars were sold in China compared to 81,000 in the United States. Not wanting to disappoint pessimists in the International Need to Know audience, let’s ask them how China generates the electricity to power the electric cars? Is it those lumps you got in your stockings on December 25th?

The World is Getting Richer

We finish on a positive note. Courtesy of the World Bank, for the first time ever, those living in extreme poverty is below 10 percent.