China’s 7.9% growth in Q2 stunned pundits, equities surged, oil jumped back to 63, dollar moved up, and Goldman Sachs and JP Morgan grinned ear-to-ear last week, though Paul Krugman said the world economy has been excessively ‘financialised,’ accusing markets of having directed “capital to unsellable houses and empty shopping malls.”

OECD says pensioners lost over US$ 5 tn in 2008, US is proposing extensive mandatory reporting for hedge funds, and may ask those writing derivatives to hold enough money to meet their obligations. Meanwhile, French travel agencies are insuring tourists against bad weather!

US budget deficit is set to cross the two trillion mark while China’s forex reserves are already there. A rather small part of the $185 bn China added to its reserves in H1 has gone to US treasuries. Obviously, money is moving into unknown terrains, contours of which are still not clear. China is moving to ensure that at least one half of its external trade is yuan denominated by 2012.

If there is no room for Asia’s savings, what will happen when Americans and Europeans also start saving? Are fears of a collapse of the global monetary system and hyper inflation real? Who knows how much money is being printed by whom and who is parking how much, and where.

The global landscape continues to change with China and Russia moving aggressively to expand their influence in Africa, though the US too appears to be waking up to the forgotten continent. Activist groups in border states of the US are trying to address illegal migration directly, setting up citizens watch posts. South Korea and EU are working furiously on a free-trade deal. Russia is preparing to rejuvenate its aerospace industry by resuming production of the world’s largest cargo plane.

Ethiopia devalued its currency by 10% last week, Iraq is looking for investments of $50 bn for increasing oil output from 2.4 to 6 mn bpd, and 4,021 (2,551) Czech companies filed for bankruptcy in H1.

The French have started smiling to make tourists feel comfortable, Evian intends to use recycled plastic for packaging its pricey mineral water and even robots are being idled in Japan. Merchants across US, including Wal-Mart, have started battling the cost of credit cards once again, and Hyundai is offering fixed rate gasoline supplies to buyers of its cars in US. While Russian millionaires are buying property in US left and right, a Chinese American has been elected to the US Congress for the first time. The latest Harry Potter movie netted over $100 mn on day one of its release.

Americans continue to spend $30 bn on medicare of 160 mn pet cats and dogs; sales of obesity and anti-depressant drugs for dogs are growing much faster than human drugs. WHO insists that swine flu is a distant cousin of the virus that killed 50 to 100 mn in 1918 and every human being needs to be vaccinated, and a brothel in Germany is offering discounts to those who arrive on bicycles.

Scientists at Liverpool University are developing laser-based ignition technology for automobiles that may replace the conventional spark plugs, and a Chinese company has sued Wal-Mart and others for infringement of its patent rights in respect of dashboard navigation devices.

PetroChina is to buy a 49% stake in Nippon’s Osaka refinery, is mulling investment in a Scotland plant, has signed an agreement with a Costa Rica refinery and with RECOPE for a refinery in the US, and has started pumping oil through its 3,000 km Kazakhstan–China pipeline, besides concluding talks with Exxon for an LNG terminal. Russia’s Gazprom is to set up a $2.5 bn JV with Nigeria to develop oil and gas fields and a pipeline from Nigeria to Europe.

ExxonMobil is being accused of sabotaging US oil wells that it has stopped exploiting, to ensure others are unable to tap them later. After earning a profit of $45 bn in 2008, it had $25 billion in cash as at the end of Q1.

Posco of S Korea is buying 90% of a stainless steel processing unit in Vietnam and is increasing its steel output, Kimberly-Clark is selling face masks briskly in Mexico, Sulzer of Switzerland experienced a 31% decline in orders in H1, and LG Chem is to invest nearly a billion to produce LCD glass.

BAIC of China, Qatar and Fiat are gunning for Opel, Daimler has introduced a natural gas powered truck, Syngenta of Switzerland and Germany’s Bayer and BASF are accepting crops instead of cash for weedicides, and Dow Chemical will permanently close three Louisiana factories. Sony and Nintendo experienced a 50% plunge in sales of playstations in June, and Nordic banks are taking control of businesses which can’t repay their debt. Vale of Brazil is making a $25 bn bid for fertilizer producer Mosaic.

McGraw-Hill has put BusinessWeek magazine up for sale, Microsoft is to release a free version of Office (sales $14.3 bn in the first three quarters), India’s ADAG group has invested nearly a billion with Steven Spielberg to produce movies, and Citi, which already earns nearly three fourth of its revenue outside the U.S. and Canada, is pushing its global ambitions even further.

Whether crude would actually collapse to 20, as forecast by a former US govt adviser Verleger, is a trillion barrel question but if Obama is serious about putting America back on educational map of the world, setting up educational and training institutes in the US of A may be the right thing to do right now. On Michelle Obama’s prodding American wives have already started developing their kitchen gardens and some are now asking her to lead Americans to the vast national parks and natural habitats to help her husband address healthcare. So what else the Obamas can or should change? Well, there are so many innovative ideas floating around. A recent research has actually told Americans what Asia has always known - swearing reduces pain and tension.

xxxxx