State of the Union. Report on Danish Economy

We finally got the long awaited report from the so called "wise men". The report to the Economic Council contains economic analyses and policy statements on economic policy.

I will shorten the 300+ pages into a small summery.

growth rates are expected to be negative and unemployment expected to increase significantly despite introduction of an array of monetary and fiscal measures. GDP growth in 2009 is expected to fall by another 3 per cent, which would be the biggest fall since the 1950’ies. Unemployment is expected to rise up from a historic low of around 47,000 persons (1.6 per cent of the workforce) in the middle of 2008 to 165,000 persons in 2011.

In total, the general government budget balance is reduced with approximately DKK 115 billions over the period 2008 to 2010. The public deficit will thus be around 3 per cent of GDP in 2010.

It has been decided to release the savings from the Special Pensions Savings (SP), which is a small gov- ernment controlled pension fund with mandatory payments in the period 1998 to 2003. it is assumed that a quarter of the savings are converted to private consumption evenly divided among 2009 and 2010 thus increasing GDP growth in 2009 by ¼ percentage point.

The new tax reform which primarily transfers taxation from labour income to VAT and other taxes is underfinanced in the short run, thus stimulating GDP growth.

The report want to boost incentive not only to more public sector investments but also subsidize private investments.

Overall, monetary policy has worked appropriately and inflation has been stabilised at
a level around 2 percent.

To sum the report it states that Denmark is severely hit by the financial crisis and we must prepare ourselves on some lean year with a pressured economy and an upturn will wait until 2011.

Global Financial crisis...put into perspective.

Just as I began to look more positively on the outlook of the global economy devastating news schock once again.

More layoffs and yet another drop in house prices. How low can it go...?! As long as people keep their jobs you can keep the worst effects off from affecting your life directly. That is unless you work as a banker and have front row seats to bankruptcies every day!

Amidst all the aching, and the fact that people like me who have a love for entrepreneurship and venture capitalism miss the good ole days, there could possible be some rays of sunshine in the middle of all of this. At least the fact that we learn so much about fundamental macro economics and the vast amount of dependency we have between nations.

But who exactly sets the agenda for the crisis - the invisible hand or does retoric come into play? And who will be hit the hardest (if any) by the crisis?

I will be writing some articles on the issue and give you my thoughts on the many reports that are being published on the matter.

PROJECT AROUND THE WORLD

So what does it really take to go around the World on bike? Except cool cash and being away from family and friends for a whole year.

After a recent biking trip across Spain I have been thinking about going around the world. My first obvious concern has been the financial one. I simply need sponsors. My approach has been to see if I can get 5000 people to join my "5000 members and Kasper bikes around the world on bike" group on Facebook. Hopefully this would show potential sponsors that there is a legitimate interest from many people.

If you want to join the group is called:

5.000 members and Kasper bikes around the World

(just click on the link. You must have a facebook account)

I am still thinking about how to approach the project besides Facebook. Can I come up with some great idea of how to do this, to secure financing or maybe just places to sleep on the trip.

Any comments or ideas on the matter are greatly appreciated.