What are we supposed to believe these days? There's plenty of opinions out there but with so much misinformation, negativity, and over-analysis, how can we decipher what's real? It's really amazing to look at comments on news articles and videos; there's an incredible amount of hostility and pessimism directed at other people, countries, even the world. Personally, I believe many of these people only represent a small population who either like to complain unnecessarily, blame others for their mistakes, or simply have been caught up in the negativity themselves. But it begs the question, what really is the future outlook of the world and how will this affect your financial planning and expectations?

It's the Asia century. The world economic focus will shift to Asia and the Pacific region.

US hegemony will decline as we are unable to afford showing military force everywhere in the world.

Energy will not be a serious problem for most of the world but it will be for the US. Clean water will be a serious problem in much of the world.

Africa and the Middle East will be volatile. Latin America will be little changed...generally prosperous but growth will slow in most countries.

Most of this will play out over decades and if you're old enough to read this you probably will not see it completed.

For personal finance the best strategy will be to live within your means, work hard, educate yourself, and invest wisely.

Personally I don't think that Asia will be immune or that it is Asia's century. Japan still has not recovered, China is heavily dependent on exports to Europe and the States, Australia is dependent on exports to China, So if Europe and the States crumble, we're screwed.

I have copied one of my blogs below that goes into this and what people should do in regards to their personal finance to weather the potential second global economic crash. From an Australian point of view:

Unless you've been living under a rock for the past few years, you will
no doubt be aware that the world is in financial turmoil at the moment.
As a country, Australia and Australians have largely escaped this until
now. But can our seemingly endless boom last forever, if the world
around us crumbles? The answer is maybe, but probably not. You see, we
are not a country in economic isolation (even though we may be a very
expensive plane fare from everywhere else), and our economy depends
heavily on the ability of other countries to buy our products.
According to tradingeconomics.com, "Australia exports were worth $25372
Million AUD in January of 2012. Rich in natural resources, Australia is
a major exporter of agricultural products, particularly wheat and wool,
minerals such as iron-ore and gold, and energy in the form of liquefied
natural gas and coal. The agricultural and mining sectors account for
57% of the nation's exports. Australia's largest export markets are
Japan, China, European Union, South Korea and United States." Not only
do we export to the two world regions currently facing economic
collapse (Europe and the U.S.), but the rest of our largest export
markets use our products to manufacture and sell to these exact same
regions. This makes us very vulnerable and should something happen in
one or both regions, or god forbid GFC2 - bang! There goes our economy!
And whether this leads to a worldwide depression or just a recession is
uncertain.

Although, unlike the U.S. and most of Europe, we are lucky that our
government does have some room to move to 'weather' any minor storms.
Should a major storm hit us there is nothing we can do. But there is
something you can do. And you can begin preparing now!

1. Learn how to stick to a tight budget - this will not only give you
great training should the worst happen, but if the world's economic
leaders do pull something magical out of their hats, hey, you'll
have some significant savings! Bonus!

2. Get out of debt, and get out fast - believe me, you don't want to
be in debt with no way to pay it back. Last depression Australia
recorded an average of 23% unemployment.

3. Build up some savings as a buffer - should you lose your job, rent
and food costs rise, how will you afford this? Building up a buffer
of as much as you can, but at least six months living expenses will
help you weather any storm.

4. Learn, learn, learn - "investment in knowledge pays the best
interest", Benjamin Franklin. Learn and research about how you can
make money and survive in a recession or depression. Get to know
new employment growth areas and get qualified. Or learn about
invest strategies that work during these times. Don't follow the
pack, learn how to stand above them!

5. Plan for the future - if everything turned out fine, where do you
want to be in 5 years time. What do you want to be doing with your
life and how can you get there. Break it down to the little simple
steps that you can do now and get going!

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+1. Trying to base your personal finance decisions on uncertain future global events is like trying to plan a dinner party when you don't know how many guests will arrive or when they'll show up. You don't want to spend a lot of time, energy, and money on an elaborate dish that needs to be eaten the moment it comes out of the oven. Instead you want to make something like pasta salad that's flexible, versatile, cheap, simple, and low maintenance.

The only quibble I have with the above advice is that it's hard to know whether you're actually "investing wisely" when you don't know what the future will bring. Will index funds continue to be a wise investment? Who really knows?

So I think the one overarching advice I'd add to the equation is "diversify." And not just diversify your investments but diversify your skills and experience. The more baskets you have for your eggs, the more you'll be able to roll with the punches. The people most vulnerable to economic changes tend to be those who've developed deep, narrow specialties with few skills that can be transferred to other professions. I'm friends with a couple in New England: the guy specializes in high-end tile installations for bathrooms and kitchens; his wife is an administrative assistant and events coordinator. The current recession has practically put him out of business but she has more work than she can handle.