With the warm glow of the holidays quickly receding into memory, it's time to remember that there's a big scary world out there waiting for us in 2012. While we're not going to witness the Mayan apocalypse touted by nut jobs and supposedly educational cable television shows, there's enough potential for disaster in this upcoming year to make anyone reach for a stiff drink or a tub of Ben and Jerry's.
In no particular order here are four things to worry about in 2012
1) The Euro
The Bottom Line: 2011 was a rough year for the Euro, but 2012 is likely to be even tougher. Obviously a sick European economy doesn't bode well for the world economy.
There was a lot of news about the Euro in 2011, but it's more than likely that we haven't reached the peak of this crisis yet. In 2011 we saw Greece take center stage as the European Union failed to contain fears that Greece was just the first domino to fall in a multi-country debt crisis. Indeed, by the end of the year, fears had moved on from tiny Greece onto much larger Spain and Italy, which both saw governments toppled as austerity took a bite. In 2012, things look even worse. People fear that Italy and Spain might not have what it takes to finance their debts, and are looking increasingly suspiciously at French debt. At the same time, European banks which hold a lot of this debt, are also increasingly worried about their own ability to stay solvent. The bottom line is this: we could finish 2012 with a drastically different Euro and and Europe in something akin to a depression. A depression for Europe is certainly trouble for the rest of the world. While this scenario sounds alarmist, it's been increasingly brought up by notable economists like Simon Johnson of MIT and Tyler Cowen, who runs Marginal Revolution, among others.
2) North Korea
The Bottom Line: With an unsteady young leader in charge of the world's scariest nuclear arsenal, we may be in for some turbulence on the Korean peninsula.
North Korea perenially makes lists of things to worry about, and with good reason. The secretive totalitarian nation is not only run by a family of wierdos who have managed to brainwash their starving populace, but also has a huge conventional army and nuclear weapons just a few hundred miles away from some of Asia's most important population and economic centers. 2012, though, is different.
Article comments
1 - Glenn Contrarian
I disagree with three of your four.
The Euro - I agree. The Euro was a grand experiment with the best of intentions, but they did not foresee (even though they were almost certainly warned) of what would happen to the currency and by extension the rest of the nations if one nation or more would default. They set themselves up for failure just like setting up a row of dominos...and we may all wind up paying a huge price.
North Korea - Nah. I'm really not that worried about them. Sure, they'll continue down the path of idiocy, and when they get too far out of line they'll be told in no uncertain terms by Beijing to behave. And even if they did go all-out batcrap crazy and do something stupid, they could seriously damage South Korea and do some damage to the world economy before they fell, but that's about it.
Iran - This is the big misconception of the West, that Iran wants nukes because of America and Israel. That's NOT the real reason. Iran wants nukes because Iran is Shi'a and nuclear-armed (and not-so-stable) Pakistan has nukes. America and Israel are the excuse, but Pakistan is the reason. Also, Iran knows full well what would happen if they were to launch or to smuggle a nuke to the West...they're not stupid.
"Creeping authoritarianism of Europe" - Whether this is a threat really depends upon the economy. If the world economy gets better, then this will stop boiling and go back to simmering. Bad economies always open the door for regime change - Europe's not authoritarian yet...and if we can get the world economy back on track, they'll go back to having some common sense.
Other than apocalyptic extinction events, the single biggest threat, IMO, is H5N1. If it ever becomes as easily transmitted as H1N1, the world is in for a nightmare the likes of which humanity has not experienced. And no, I'm not exaggerating. Currently there's some real hope for a universal flu vaccine. If they can get that done in time. If they can't, it's only a matter of time.
2 - Christopher Rose
Not at all sure that any of these are the biggest problems facing the world. Sure, they all have the potential to kick off at any time but a proper understanding of the risks helps.
The problem with the Euro is actually the problem with Europe. The cradle of democracy has actually constructed something that is anything but democratic. The politicos have actually chickened out of forming the United States of Europe (for want of a better name) and have set up a democratically non accountable body to rule it, the European Commission, and an elected but non ruling body, the largely pointless European Parliament.
Add to this the egalitarian folly of using all member nation languages for everything and moving the entire thing back and forth between Brussels in Belgium and Strasbourg in France every two weeks and you have a recipe for chaos, which is exactly what we are getting.
As to North Korea, they neither possess the "world's scariest nuclear arsenal" nor are in a position to threaten anyone, so I don't see this as much of a problem.
As to Iran, I don't actually see why they shouldn't have nuclear weapons and it seems deeply hypocritical of we western powers to have them but insist others shouldn't.
If you look at a map of the region and overlay on it where all the west's military bases are, Iran is practically surrounded by what it sees as either actively or potentially hostile threats.
That's not to say their current leaders aren't bonkers, but that is true of many countries in the world, including some in the west and its allies.
As to creeping authoritarianism, that is a major problem, but not just in Europe and most of all in the United States, which is still very influential and has one of the most over the top security networks and aggressive penal systems in the world.
One of the real and largely unacknowledged major threats to the entire world is the overwhelming weight of dogma, which at both secular and spiritual levels is preventing everyone from speaking the truth.
When we can't even talk honestly any more, how can we ever start to solve any of the challenges facing us?
3 - Dr Dreadful
I can think of another one.
If, as seems likely, Barack Obama is reelected as President of the United States in November, and the GOP retains control of the House and makes further gains (or even becomes a majority) in the Senate, the resultant ideological deadlock could snuff out for good any dreamy ideas the American economy had about recovery.
That outcome would be just as bad, if not worse, for the global economy as the collapse of the Euro.
4 - Baronius
The Euro - Yeah, another shock could hurt Europe, but does that translate into an economic problem for the US? I'm not sure; I've never looked at the numbers, but the US boomed while Europe struggled in the past few decades. Definitely the US economy impacts Europe's, but I don't know how much Europe's impacts the US's.
North Korea - Yes. They've been a humanitarian crisis for years. I'm not so much worried about a formal armed conflict between outsiders as I am worried about what the collapse of North Korea could do to its people.
Iran - Any time you've got crazies running a government, you have to include them on a list of potential worries. I'm surprised that more Muslim countries didn't make your list. Iraq, Egypt, Libya, Syria...the list of unstable countries is pretty long. And Turkey always seems ready to jump on that list.
Europe Authoritarianism - You mentioned fears of a rightward turn, but European authoritarianism has many flavors. Ukraine and Russia both have internal problems and always border problems. And there are reasons to be concerned about the overarching European government overstepping its authority.
5 - Glenn Contrarian
Doc #3 -
I hate to say it, but I agree.
6 - A. K. Moore
Wow! The comments on here are awesome! Thanks so much for taking the time to read and comment on my article. With that said, some comments on the comments:
Glenn Contrarian, I agree with you that H5N1 is definitely a threat of the apocalyptic sort, but with that said, I don't think the likelihood of it being a major threat in 2012 is any different than recent years. I guess I was going for a more sort of "things to be more worried about in 2012 than in previous years." As far as your other comments, I would say that extreme damage to South Korea would be a very scary thing that would lead to drastic changes in the East Asian political landscape and have pretty serious global economic ramifications.
Christopher Rose,as far as your diagnosis of the problem in Europe, I would half agree. From what I understand, the main problem facing the Euro is that it is a common currency among countries at vastly different levels of economic development and only a loose body watching over fiscal policy in these different states as opposed to a fiscal union. I would disagree with your assertion that the Europeans are too chicken to form a United States of Europe. The countries that are in relatively good fiscal shape have a very good reason for not wanting to share in the debts of their less fastidious southern neighbors. As for North Korea, I do think that it, along with Pakistan, have the scariest nuclear arsenals in the sense that they are in the most volatile political areas. I think this means that they are the nuclear arsenals most likely to be used (as unlikely as that eventuality is). Also, I would like to point out that North Korea is in a position to threaten South Korea as well as Japan. While that would certainly end in tears for North Korea, I don't know how much the East Asian powers (Japan, China, Russia, South Korea, USA) are willing to gamble that the regime in North Korea is not going to do something unfortunate, particularly during a potentially unstable period of power transition.
Dr. Dreadful, I would put that as a threat for 2013, but I agree with the sentiment.
Baronius, I strongly disagree with you about the Euro. This recession in Europe is fundamentally different from ones in the past in that it is a multi-country sovereign debt crisis, and not just a regular recession. The issue with a Euro collapse is that it could cause credit crunches all over the world as banks try to protect themselves much as they did during the crisis in 2008. Since American banks also have exposure to European debt, this could be a problem. In addition to this, this would not be slow growth like Europe experienced in the recent past. I would likely be a full on major recession/depression. I think it would definitely have a pretty extreme impact on the world economy, particularly since it's already in a fragile state.