Gold changing role as wealth moves East

mineweb.com / By Julian Phillips / February 25, 2013

In the last five years, we have seen the start of the decline of the developed world and the real impact of the economic rise of China on that world. What lies ahead? James Wolfensohn, the ex-president of the World Bank gave a short lecture recently in which he forecasts what the world’s cash flows would be like in 2030:

• For the last century and far more, 80% of the world’s cash flowed to what we know as the developed world where 20% of the people lived. Twenty percent of the cash flow went to the underdeveloped world where 80% of the world’s population lived.
• By 2030 these numbers will have changed dramatically, with 35% of the cash flow of the world going to the developed world and 65% of the world’s cash flow going to the ‘emerging’ world, primarily China and India.
• In addition, he says that there will be 1 billion middle class people in China by 2050 –a figure we had previously put at 300 million. This is more than the total population of the U.S.A. and the Eurozone put together. Worldwide there will be 3 billion people in the middle classes with two thirds of them in Asia.

Think for a moment what this will mean to you individually and the world in which you live. Unless one tries to understand them, we will become a victim of the changes. The ramifications are vast; they become almost impossible to detail in advance. We can forecast principal and principle changes but will almost certainly be wrong in specific details. We then look at the changes that will affect the precious metal worlds, but even here we can only make broad sweeps.

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