Maurizio d’Orlando

Beijing begins to acknowledge the failings of its economic model. Its steel sector is in trouble because of overcapacity and a drop in profits -98 per cent). As the economy's main engine, exports, stutters, fears are growing of economic and social implosion. Currency wars in the Far East could threaten the peace.

A report by the World Bank’s Food Price Watch confirms rising prices, 15 per cent higher between October and January. For the poorest nations, this has had serious consequences and is causing social tensions and uprisings.

Asia, Africa, Latin America and Europe have seen huge increases in food and fuel prices. The cost of wheat and other agricultural products has risen not because of shortages, but because of inflation generated by the Federal Reserve. The gap between economic elites and the population is widening.

In a note to Congress, US Defense Department reveals Israel bought huge amounts of fuel for jet planes and land forces. In Jerusalem, debate heats up over the suitability of an attack against Iran’s nuclear reactors. In Tehran meanwhile, leaders continue to favour nuclear energy because of US embargo on oil refining technology.

‘Caritas in Veritate’ reiterates the key notion of the Church’s social doctrine in a globalised world. It urges everyone to rediscover the notions of responsibility and merit which are found in each of us, in the family, the firm, the local and national community, which in turn are more than a collection of nameless atoms with neither past nor present. As ‘actus personae’ economic activities must have a specific and concrete meaning in relation to a body, a plural one, wherever necessary, but one that is united internally and close-knit. The Encyclical issues a warning against the dangers of technological absolutism.

The depth of the current economic crisis is leading many people to favour a form of governance that would place economic and political life under the trusteeship of international organisations. Barack Obama’s new cabinet, which is made up of those responsible for the crisis, will ensure the ascendancy of financial interests. In the meantime no one is calling for the people to have power in the monetary sphere. The result is that democracy is being killed by financial power.

Economic forecast for the next three months indicates storm ahead as stock and credit markets collapse. The cost money is set to go up as the fight against inflation gets rougher. The dollar’s plunge could be followed by that of the euro, because of politics.

As the number of prophets of doom multiplies, the demand-side structural imbalance of the world economye, now under scrutiny in many economic studies, lies in the artificial compression of Chinese domestic consumption.

As involvency grows in the US subprime market the banking system becomes more dysfunctional. As lending to firms, consumers and governments is tightened, the crisis spreads to the whole economy.

Mistaken political decisions and irrational economic demands of those who could build refineries have led Teheran to institute electronic cards to limit the use of fuel. The crisis is sparking the biggest domestic protests that Ahmadinejad has faced since being elected.

Beijing is setting up companies for research and production, in coming years, of third-generation nuclear energy, wind and solar power plants. But the present is still made of coal mines, which kill thousands of workers each year, and (sometimes illegal) petroleum sourcing.