Every strong economy in the world is getting weaker at the same time, and when you look around the world, it’s hard to see an emergency booster engine lying in wait. [In fact,] the odds of a recession are climbing everywhere and the expectations for growth are falling everywhere. [That being said, might the U.S. be that engine of growth in that] residential investment finally seems ready to climb out of its five year hole and improve the earnings and spirits of the world’s largest national engine of consumption? [Let’s look at the graphs of the global growth index of a number of countries and a graph of the IMF’s forecast for GDP growth worldwide for a better understanding of how serious the situation really is and what could possibly provide a boost to the world economy in the coming year.] Words: 425
So says Derek Thompson, senior editor at The Atlantic (www.theatlantic.com), in edited excerpts from his original article* posted under the title Every Economic Recovery in the World Looks the Exact Same—and That Stinks.
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Thompson goes on to say, in part:
A measure of U.S. economic health from 2003 to today, accounting for GDP and indicators like employment growth, consumer confidence, and the stock market is a story of slowish growth, followed by a deep plunge, a heartening bounce-back (especially for financial markets) and, finally, the muddle. That’s America’s story, but it’s not exclusively an American story. It describes just about every advanced economy’s two-step recovery: for Canada, held back by a weak U.S.; for Australia and Japan, held back principally by a weakening China; and for Germany, the U.K. and France which are buying fewer goods from China, which is hurting Australia, and around we go.
Who in the world is currently reading this article along with you? Click here[Indeed,] as the Brookings Institution reported this month [see here], the advanced world’s economic recovery is sliding toward stagnation, in unison, [as shown in the graphs below].
Just because each country is tracing the same sickly line doesn’t mean we’re all suffering from similar maladies. Europe is uniquely constrained by a common currency that’s working well for nobody. Australia is battling a Chinese slowdown. The U.S. is proving that it’s hard to grow without a housing market.
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These crises are wide-ranging, but the upshot is that the world economy needs a power engine. After the Great Recession, China passed a monster stimulus, Brazil went right ahead with its borrowing, and world trade was surprising buoyant considering the scale the global housing and equity meltdown. That’s one reason why export growth returned so quickly to the U.S., Canada, and Europe. Today, however, every strong economy is getting weaker at the same time, and when you look around the world, it’s hard to see an emergency booster engine lying in wait.
As the WSJ beautifully graphed above, the odds of a recession are climbing everywhere and the expectations for growth are falling everywhere.
In fact, however, if any country is likely to provide a surprising boost to the world economy in the next year, it’s right here, in the U.S., where residential investment finally seems ready to climb out of its five year hole and improve the earnings and spirits of the world’s most largest national engine of consumption.
For the world’s sake, we should hope for a housing recovery very, very soon.
*Source of original article: http://www.theatlantic.com/business/archive/2012/10/every-economic-recovery-in-the-world-looks-the-exact-same-and-that-stinks/263419/
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
The Fed professes that QE 3 or as I call it, QE Infinity (QEI), will create jobs but I am not sure how they can expect anybody to buy their rationale. As we know, QE 1 and QE 2 did very little in the way of creating jobs. Might the Fed realize that QE Infinity could actually be counter-productive to economic growth?
For over two years now, I’ve been warning that the 2008 Crash was just a warm up and that the REAL Crisis would occur when the stock market realized that the Central Banks, lead by the US Federal Reserve could NOT actually hold the financial system together. Well, the Crisis I’ve been warning about is here. [Let me explain.] Words: 306