(Last week there was no posting because of the holidays. Wishing a very happy and prosperous 2010 to all readers.)

Failing to come up with something as catchy as Japan’s ‘lost decade’ (the 1990s), last week Krugman described the past decade as the Big Zero for the US – zero job creation, zero economic gains for the typical family, and zero willingness to learn from mistakes.

China has transformed itself into the new economic (and political) powerhouse, still growing at over 8%. India, Brazil and Korea are growing well and a large part of the developing world, including Russia, is comfortable.

Economic and political power has dispersed significantly but the number of those having the power to nuke the world is growing; nuclear energy is receiving as much attention as wind and solar and that also expands the probability of disasters. Even Sweden has started refurbishing its nuclear power plants. Number of airports using full body scanners is growing by the day.

The consumerist path China has taken is more important than it claiming parity with the US on the world stage. While wants of Americans, Europeans and Japanese are yet not satiated, just imagine how far the quest for worldly comforts, of a 1.3 billion strong nation, would go. Add the similar approach of the rest of the developing world, including India and Russia, and you don’t really have to think why Copenhagen failed. Prices of carbon credits have softened significantly since then. However, the silver lining is that even after having becoming the world’s largest market for automobiles, China is investing heavily in high speed trains.

The growing sense of stability means adequate regulation of financial markets may not materialise before the next crisis. Bankers would perhaps continue to play poker with hard earned money of their depositors in the near term. Tax havens, however, are under attack. Even Italians have repatriated over $130 bn under an amnesty scheme and Cayman Islands has started looking at alternative ways of creating jobs.

Willingness of major economies (US, China, EU and Japan) to keep interest rates low and force the man on the street to deploy savings in Ponzi schemes is the real trend. The US Fed is actually thinking in terms of accepting interest bearing deposits from banks, which means they can earn a spread without doing anything worthwhile. Deficits and borrowings can now be used almost indefinitely to sustain and support lives and economies. How this will impact long term real growth is the question.

US companies sold a record $1.24 tn of bonds in 2009, compared to $874 bn in 2008. Money market accounts have aggregate balance of $3.27 tn. Somehow figures for EU and Japan aren’t as easily available but the overall liquidity overhang is unmistakable. Value of global securitised corporate debt, currently estimated at $53 tn, declined marginally last year. How long can the financial industry keep this mass of money quarantined from markets for real goods and services? If and when oil declines, the dam may burst, washing away many vulnerable economies.

Christmas sales in US weren’t disappointing but most US retailers have extended the discounts beyond the holidays and there are no signs of unemployment abetting. After stability, there is a lull of sorts. It has become very difficult to gauge the direction the US economy is taking, or is likely to take.

Nothing illustrates Krugman’s allegation that the US is refusing to learn more than Obama pushing science and math education under his “Educate to Innovate” program, stubbornly refusing to recognize that what the St offers is too alluring for anybody with good IQ to think of some real innovation.

China is now producing about a ton of gold every day, Thailand’s exports have turned positive after 13 months of decline, and Brazil’s forex reserves are $238 bn now. Japan has raised taxes on cigarettes by 4 cents a cigarette. EU has extended customs duty on Chinese and Vietnamese shoes for 15 months. South Korea has emerged as the fastest growing economy among OECD countries, and China’s 60+ population has already exceeded 160 mn.

Apparently even currencies markets are steady but uncertainties lurking in shadows cannot be wished away. The Canadian dollar has started receiving attention from managers of currency reserves of developing countries, most of whom are increasingly reluctant to buy US treasuries.

Perhaps Apple is on its way to becoming the world’s technology superstar as its iPhone is changing the landscape. Besides AT&T, London’s O2 has also experienced difficulties in handling data traffic because of the growing population of iPhones. Apple is talking TV subscriptions with CBS and Disney. Nokia’s credit ratings were downgraded recently. Whether the atmosphere will be able to handle all the signals is perhaps the only question mark. May be they will find a way of compressing the signals to the extent required.

Loneliness is undoubtedly increasing. While a Japanese man recently married a character in a video game and went off for an overseas honeymoon, in China, 21 single billionaires were introduced to 22 single women by an agency at a party that cost $15K per head. In China, the latest high speed train got delayed because of a single errant smoker who didn’t know that there were sensors in the toilets also. Each of the dozen or so affairs Tiger Woods has had would cost his sponsors an estimated $500 mn to $1000 mn, said a researcher last week. In Korea, the cyber media has become so effective that even blogs are able to cause mass frenzy; a German journalist faced the ire of Koreans within days after she poked fun at Korean women wearing short skirts and the government is preparing to punish those who insult others on the net.

So where is the world headed in the new decade? How will life be different in 2020? Hell, when nobody knows what will be the scene in Dec 2010, what’s the point in talking of 2020?

xxxxx