Top 10 economic events of 2011

The top 10 economic events of 2011, ranked using the criteria of the likelihood of decisions being reached and the impact of those decisions.

Below is a list of the 10 most important economic events for 2011. The two ranking criteria used are the likelihood of decisions being reached and the impact of those decisions.

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Time : Varies for each country
Location: Varies for each country

In 2011, key decisions need to be made on the monetary policy front.

For the U.S., it will be whether the Federal Reserve will expand, cut back, or stick with the original $600-billion amount for its controversial program of quantitative easing. The European Central Bank needs to make decisions about the purchases of peripheral sovereign debt and the availability of various lending facilities to banks.

Conversely, central banks of emerging market countries need to determine how fast they will tighten monetary policy, especially in light of the rampant food inflation in several of these countries.

These monetary policy decisions -- made mostly at scheduled meetings -- will impact the movement of hundreds of billions of dollars.

Below is the scheduled meetings of the U.S. Federal Reserve.

January 25-26
March 15
April 26-27
June 21-22
August 9
September 20
November 1-2
December 13

Time: 7 meetings
Location: Mostly in Brussels, Belgium

The fate of the euro zone (and euro currency) looks precarious.

The key issue is that euro zone members share a common currency and monetary policy without the corresponding convergences in the underlying economy and fiscal policy.

To complicate things, experts and decision makers disagree on the solution. Some think the euro zone should be broken up in the fastest and most painless way possible. Others argue that the crisis is an opportunity to take the next step in European integration.

Moreover, the divergent wills of the citizens of individual euro zone countries are unpredictable and may force the hands of the European elites.

As the Euro Group -- which consists of the finance ministers of the euro zone -- meets, decisions will be made.

While no significant change may take place, volatile results in either direction (integration or dissolution) are quite possible. The consequences, especially those of dissolution, can ripple through the global financial system and economy.

The following are the meetings scheduled for the Euro Group.

17-01-2011        Brussels
14-02-2011        Brussels
14-03-2011        Brussels
08-04-2011        Budapest
16-05-2011        Brussels
14-06-2011        Luxembourg
11-07-2011        Brussels

Time: June 2
Location: Vienna, Austria

The price of oil will be a highly relevant issue due to loose monetary policy from the U.S. and burgeoning demand from developing countries.

If prices continue to increase and production doesn't ramp up in response, the burden of expensive crude oil will weigh on both consumers and industrial users.

In fact, some theorists believe that rising oil prices are the main cause of recessions.

(Since World War II, every single U.S. recession except for one has been preceded by a spike in oil prices, according the American Enterprise Institute.)

Just how much oil prices impact the real economy is debatable.

However, what's pretty certain -- and a major reason that the OPEC meeting is ranked 3 -- is the fact that OPEC makes real decisions about production quotas at their meetings and this quota can have significant impact on oil prices.

Time: January 18 to 21 (event already took place)
Location: The United States (White House)

This was one of those high impact but low probability events.

When Richard Nixon visited Chinese Chairman Mao Zedong in 1972, it paved the way for the rise of China and the enjoyment of cheap goods by Americans. This visit was easily one of the largest economic events in the last three decades of the 20th century.

Now, as China becomes the second largest economy of the world and continues to run persistent trade surpluses with the U.S., the two countries are at a crossroads again.

The key question is if China is ready to become a nation of consumers. To do that, it needs to make big decisions like providing more generous social safety nets and cutting back subsidies to exporters. Allowing the faster appreciation of the yuan, combined with other sensible reforms, is key to addressing both issues.

The U.S., on the other hand, needs to consume less and invest/produce more.

If China and the U.S. actually agreed to adjust their distorted economies for the benefit of themselves and the world, it would have been one of the biggest economic event of the 2010s decade.

However, Hu's visit to Obama ranks 5th on this list because nothing likely happened. For both sides, there was too much political inertia to make any real changes. Plus, the visit -- which already ended -- did not produce any publicized concrete results.

Still, even if a little progress was actually made behind the doors -- for example, if China agreed to appreciate the yuan slightly faster -- the impact would be noticeable given the sheer size of these two economies.

Time: November 3 to 4
Location: Cannes, France

The G20 Summit is the most important of the 'a bunch of powerful people gathering together' events.

The flaw is that like other such events, a real unified decision will not likely be reached.

However, the G20 Summit -- which gathers leaders from 20 of the most powerful countries in the world -- is the event that boasts the greatest concentration of power the world has ever seen.

Plus, the stated purpose of the G20 is to discuss (and possibly resolve) key issues in the global economy, so the participants are at least trying to produce real results.

Lastly, at 2008's G20 Summit, which took place at the height of the financial crisis, world leaders were moderately successful in reaching some actionable agreements.

Time: Spring meeting April 16 to 17, Annual meeting September 23
Location: Washington D.C., United States

The IMF/World Bank meetings address some of the same issues as the G20 Summit. However, the decisions reached at the G20 meeting tend to carry more weight.

Another difference is that the IMF and World Bank meetings focus on the role these two institutions play on the world's economic stage.

In particular, the issue of the over-representation of European countries and the under-representation of Asian countries at the IMF will likely be discussed again. This is a serious matter because the allegedly unfavorable treatment of Asian countries after the 1997 Asian Financial Crisis is often cited as a reason for their decision to accumulate foreign exchange reserves in recent years.

Moreover, the prominence of the IMF has also been elevated because of the role it played in bailing out failing euro zone members. In 2011, it may very well bail out more euro zone countries.

Lastly, any movement to shift away from the U.S. dollar as a reserve currency to a new global currency or currency regime will likely involve the IMF. This subject will probably not be officially broached at the 2011 meetings, but it's still something to keep an eye on.

Time: 4 meetings - March, June, September, and December
Location: Basel, Switzerland

The Basel Committee is the gathering of banking officials from the leading banking countries of the world. Their purpose is to make decisions that have serious implications for the global financial system.

If this list were made last year, the Basel Committee meetings would have ranked higher. That's because Basel III -- the overhauled regulatory framework that's meant to address the issues of the financial crisis -- was published then.

Fast-forward to this year, the committee will mostly hash out the regulations. It is still relevant, but its impact is not as great as it was last year.

Time: Not yet disclosed
Location: Not yet disclosed

The Bilderberg Conference is a favorite target of conspiracy theorists and it's easy to see why.

For starters, participants meet privately and do not disclose details of the discussions.

Moreover, the most powerful people in the world gather there. Past attendees have included Bill Clinton, Henry Kissinger, Ben Bernanke, Bill Gates, and Josef Ackermann.

These participants discuss similar topics as the IMF/World Bank and the G20 meetings.

However, because of the privacy afforded to the group, their discussions are more blunt.

Moreover, topics that these elites don't dare to openly discuss at the G20 or IMF/World Bank meetings -- like alternatives to the U.S. dollar as global reserve currency and the demise of the euro currency -- were discussed at the 2010 Bilderberg meeting, according to sources who claim to have obtained the leaked meeting minutes.

Time: January 26 to 30
Location: Davos, Switzerland

The World Economic Forum, hosted at Davos each year, boasts some impressive attendees in business, politics, academia, and the media. In 2010, attendees included Bill Gates, Bill Clinton, and Josef Ackermann, which belong to the same crowd as the Bilderberg and IMF/World Bank attendees.

However, Davos has evolved into somewhat of a social gathering for elites. In fact, people like Reuters blogger Felix Salmon and economics author Nassim Taleb openly mock it.

Moreover, it's not purely about economics as health and environmental issues are also discussed.

Nevertheless, power brokers do gather at Davos and their swapping of ideas may indirectly impact their real-life decision making.