The Finance Foundation
Reinventing capitalism for all
AUTHOR
Michel
Gabrysiak
President of the Finance Foundation

A new Powerful 7 countries group is bigger than the old G7. A totally new world
October 10, 2014 , Michel Gabrysiak - Financial Markets
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         A huge event is happening in 2014. For the first time, the G7, the 7 most powerful and wealthiest countries in the world, Canada, France, Germany, Italy, Japan, the UK and the USA, are not leading the world anymore.

         A new G7 is born out of, what was called a few years ago, under-development. The rich were looking at the others with a measure of commiseration. Today the situation is exactly the opposite. Brazil, Russia, India, China, Mexico, Indonesia and Turkey have a combined GDP of 37.8 trillion dollars, compared to 34.5 trillion dollars of the old G7.

         This calculation is made for the PPP . Those letters mean the Purchasing Power Parity.  That means simply that you can purchase more things with your dollar in India, China, or Indonesia, than in England, or in the USA.

         At market exchange rates, the USA represent 17.4 trillion dollars, and China only 10.4 trillion. If you transform that into relative prices, or your Purchasing Power, it gives the result above. In other words, it is a currency and a wealth approach. In absolute terms the seven new G7 countries have a long road to go. But China, in that calculation overtakes the USA. India is bigger than Japan and Germany. France is Nr 8; the UK is No10.

         Our whole concept of rich and poor is changing dramatically.

         And after all, the IMF experts are absolutely right. What counts is what you can get for your dollars.  It is true in another case, for example in Greece. A dollar in Greece is worth much more if you buy things than in England, France or the USA. This new way to look at wealth will revolutionize mentalities, if not realities. What is absolutely clear is that, the demographic masses on the march are beginning to prevail on the tiny countries of Europe and the big continental mass of the US.

         A sign of times.

 

 

 

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