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Millennial generation has suffered the consequences of an increasingly unequal global economy


After a year-long reporting effort by The GroundTruth Project, a clearer picture is emerging of a millennial generation facing an uncertain global economy. Our team of 21 GroundTruth reporting fellows journeyed to 11 countries to tell the story of their own generation. It’s a complex picture which combines devastating realities for many young people who economists believe will be the first generation to be worse off than their parents.

But it is also a demographic group, typically defined as being born between 1980 and 2004, that holds out great promise for innovation and an entrepreneurial spirit that seems woven into their identity as digital natives. And this generation is actively, some might say desperately, being courted by President Obama as the swing vote in American electoral politics.

This year, it seems the world has begun to realize that a large piece of the millennial generation has suffered the consequences of an increasingly unequal global economy that has fostered despair and in many places, from Brazil’s street protests to the uprisings of the Arab Spring, violent expressions of dissatisfaction.

In Brazil, they mobilized to boycott the World Cup, accusing the government of squandering their future to host wealthy tourists rather than create opportunities for the country’s residents.

Economy adds 248,000 jobs, Unemployment Drops to 5.9 percentCNBC

In Spain, they are known by the Spanish-language shorthand “NiNis” because they’re neither working nor in school in a country with a youth unemployment rate above 50 percent.

In the Philippines, which has one of the youngest populations in the world, a small cohort are fighting over jobs at call centers in a booming ‘outsourcing’ sector while a much larger number slipping deeper into poverty.

In Nigeria, young people represented a “kidnapped generation” long before Boko Haram abducted 270 schoolgirls in April as a seemingly indifferent government was shamed on the world stage by the #BringBackOurGirls campaign.

In Egypt, the young people who inspired what became known as a “Facebook Revolution” that toppled a dictator are redirecting their energies to building technology startups out in the desert, defying a sinking economy in an increasingly authoritarian political climate.

In America, young people living in the country’s former industrial heartland are finding jobs are scarce while an innovation economy is creating a thriving culture of digital startups on the coasts.

If there is one truth that cuts across the different cultures and histories of the countries where our young reporters went to find stories, it is that the problem is global and rising in its urgency.

GroundTruth Managing Editor Kevin Grant, who has headed up these reporting teams in the field, said, “Our reporting revealed that youth unemployment has remarkably similar effects on societies around the world. When the future looks so bleak, it’s very difficult for young people to feel like they are part of something that matters. The mundane tasks of seeking a job can feel like a waste of energy when there is so little payoff. That has led many millennials to organize, to lash out and in some cases, to give up altogether.”

But Grant hastened to add that while there is frustration there are also streaks of hope and innovation in a generation that, as President Obama put it in a recent policy speech on millennials, has “an entrepreneurial spirit in its DNA.”

Read more: GlobalPost Groundtruth

Research shows the youth unemployment crisis is not limited to any particular country or region. It is no kinder to developed nations than to developing ones. Catastrophic levels of youth unemployment have emerged since the global economic downturn began in 2008 as a sort of plague on a “lost generation,” with powerful implications for the planet.

And what is increasingly clear is that we are all in this together. If this generation continues to stumble, the economy will fall.

A research report by the Young Invincibles, a post-recession youth advocacy group, found that persistently high unemployment among young people accounts for up to $25 billion a year in uncollected tax revenue and additional strains on existing funding for social services.

Rory O’Sullivan, the director of the advocacy group and co-author of the report titled “In This Together,” explained, “When you have an entire generation of people that are out of work, it’s going to create tremendous costs for taxpayers both now and in the future.”

The report also highlights the fact that federal youth jobs programs have been cut by $1 billion a year since 2002, and it calls for the Labor Department to expand apprenticeship programs and national service programs such as AmeriCorps, which had 500,000 applications last year for just 80,000 positions.

The World Economic Forum, which focused on the problem at its gathering in Davos in January, has emphasized the need for an entrepreneurial, “collective approach” to the problem to better match open positions with potential employees with required skills, providing training and mentorship programs to those who might be otherwise unemployable.

And the European Union has committed to an initiative that “seeks to ensure that member states offer all young people up to age 25 a quality job, continued education, an apprenticeship or a traineeship within four months of leaving formal education or becoming unemployed.”

As London-based economist Umair Haque, a frequent contributor to the Harvard Business Review, wrote in January, “So let’s call it what it is. Not just unfair — but unconscionable. The world’s so- called laders have more or less abandoned this generation.”

As a culmination of our year-long reporting effort, The GroundTruth Project and International House are co-hosting a conference titled “Generation Jobless” that is a gathering of thought leaders, politicians, economists, advocates and talented young people to work together to find solutions to the problem. We hope our reporting around the world on this issue will provide a framework for understanding the complexity and the layering of the economic realities for young people today.

As our own Kevin Grant put it, “We coined the concept of ‘Generation TBD’ to describe a large and often neglected demographic whose future is ‘to be determined.’ The uncertainty in that can be awful, the lack of trust in traditional institutions as some of the old paths to success disappear. But there is also freedom in not knowing what the future will look like, in forging new paths, and in taking it upon yourself to make the future you’ve been dreaming of. Our reporters say that seeing that process firsthand has been the most inspiring part of this project. I certainly feel the same way.”


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Debt is out of control and foreign holders of U.S. Treasury bonds are getting antsy


To say that the U.S. economy is in trouble would be an understatement. According toShadow Stats economist John Williams, we may be on the very cusp of a crisis so severe that it promises to re-write the entire paradigm. Debt is out of control and foreign holders of U.S. Treasury bonds are getting antsy. Nowhere is this more obvious than in China and Russia, where leaders of the globe’s other super powers are feverishly working to distance themselves from the U.S. dollar by establishing new monetary relationships that completely bypass the world’s reserve currency.

A loss of confidence in America’s ability to manage its fiscal, economic and monetary policy coupled with a continued slowdown in growth could soon reveal what Williams calls “the end game.”

It’s coming sooner rather than later suggests Williams in a recent interview with Greg Hunter’s USA Watchdog:

“I can’t give you good reason for why the stock market is as high as it is. The fact you are seeing this volatility means there are a lot of people who are very nervous about what is going on and where things are in the market.It is probably one of the great bubbles of all time. It most likely will collapse along the lines of the U.S. dollar in response to the reality of no economic recovery. . . . I can’t think of a more vulnerable market than what we are seeing here.”

You are getting a confluence of extraordinary factors that are coming together that will cause the dollar to break. You’ll have a panic flight from the dollar along with dumping of U.S. Treasury bonds by foreign owners. We are coming in on the end game here.”

“I have been forecasting hyper-inflation in 2014 for some years now. We are coming to the end of 2014, and it hasn’t happened. A prerequisite is a collapse in the dollar. A collapse in the dollar can happen at anytime . . . and at this point, I am not looking to change the outlook.”

“I have had a lot of calls from clients recently to that effect, yes. I can tell you what they are seeing in terms of their business, after adjusting for inflation, and that’s using the government’s inflation number; they are not seeing any sales growth. How can you have no sales growth in 80% of the economy and have a booming economy? It’s not happening.”

Since 2010 John Williams has repeatedly warned of a coming hyperinflationary event that will leave the United States decimated. With the loss of purchasing power of the U.S. dollar will also come disruptions to the normal flow of commerce, including domestic supply chains.

As the dollar breaks down, you’ll also likely see disruptions in supply chains, including shipments of food to grocery stores. People should consider maintaining stockpiles of basic goods needed for living, much as they would for a natural disaster.

I have a supply of goods and basic necessities in case something terrible happens-natural or man-made-that will carry me for a couple of months. It may take that long for a barter system to evolve, which I think is what you’re going to end up with; at least until a new currency system is reorganized and you get a government that’s able to bring its fiscal house into order.
It’s an effect we saw happen in Greece several years ago when debt levels got to such levels that no one was willing to lend the collapsing nation any money. This led to a widespread breakdown – people were fighting for food, life-saving medicines were unavailable, power regulators almost shut down electricity to the entire country, andbarter networks sprung up because money was simply not available to the average person.

What became valuable in Greece is exactly what you might expect – physical assets.

The price of precious metals sky rocketed on the streets of Greece. Those with food were able to barter for other services. And those with specialized skills were able to trade their labor for essential goods.

The situation was dire, but with the U.S. and Europe eventually offering up billions of dollars in bailouts a complete collapse was averted.

This left many people with the impression that no matter how bad things get, there will always be a bailout.

But what happens when America experiences a similar crisis? Who will have enough money to bail us out? Which country will be willing to cough up trillions of dollars to support the U.S. financial system and economy?

Former Treasury Secretary Hank Paulson, who presided over the collapse of 2008, has said that the United States was on the brink of collapse. At the time Congress was warned that failure to pass the bank bailouts would have led to tanks on the streets of America.

Considering we have yet to resolve the fundamental issues that plagued our economy then, how bad will it get when the next crisis unfolds?

As Greece was falling apart one of our contributors contacted us to share how desperate things had gotten.

“My shotgun is full and well equipped. I hope i don’t need to use it.”
This is coming to America. Ayn Rand once said that we can ignore reality, but we cannot ignore the consequences of reality.

If you haven’t take steps to do so, it’s time to get prepared for the consequences.

China surpasses US as world’s largest economy based on key measure


China has surpassed the US in terms of GDP based on purchasing power parity (PPP), becoming the largest in the world by this measure, International Monetary Fund estimates show.

In 2014 China reached $17.6 trillion or 16.48 percent of the world’s purchasing-power-adjusted GDP, while the US made slightly less, 16.28 percent or $17.4 trillion, the FT reported citing IMF data.

PPP is recognized as the best way to compare the size of economies rather than using volatile exchange rates, which rarely reflect the true cost of goods and services. Thus a trillion US dollars are worth a lot more in China than in the US.

On the purchasing power basis, China is overtaking the US right about now and becoming the world’s biggest economy, according to the forecast.

The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019.

According to IMF estimates, in 2015 the gap between China and the US will increase to almost a trillion dollars: Chinese GDP PPP will amount to $19.23 trillion against $18.286 trillion in the US.

However in terms of a real GDP the United States remains the undisputed world leader with $16.8 trillion output, significantly outpacing China with $10.4 trillion.