Posted on 05/26/2015 6:06:34 PM PDT by 9thLife
The world economy is disturbingly close to stall speed. The United Nations has cut its global growth forecast for this year to 2.8pc, the latest of the multinational bodies to retreat.
It leaves a thin safety buffer against any economic shock - most potently if China abandons its crawling dollar peg and resorts to 'beggar-thy-neighbour' policies, transmitting a further deflationary shock across the global economy.
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Each of the past four US recoveries has been weaker than the last one. The average growth rate has fallen from 4.5pc in the early 1980s to nearer 2pc this time.
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The US cannot easily launch a fresh New Deal. Public debt was just 38pc on GDP when Franklin Roosevelt took power in 1933, and there were few contingent liabilities hanging over future US finances.
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It is now more likely than not that US economy has dropped through the Fed's stall-speed threshold of two consecutive quarters below 2pc growth. Exactly how far below is unclear. The Fed uses its own growth measure - gross domestic income (GDI) - and this data has not yet been published.
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Mr Perkins said China is now in a “classic debt deflation spiral” as excess capacity holds down prices.
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Russia, Brazil, Argentina, and Venezuela are all contracting sharply, casualties of the China-driven commodity bust. The UN says the growth rate for the emerging market nexus (ex-China) has dropped to 2.3pc from an average of 6.5pc in the glory years of 2004-2007.
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HSBC's Mr King says the global authorities face awful choices if the world economy hits the reefs in its current condition. The last resort may have to be "helicopter money", a radically different form of QE that injects money directly into the veins of economy by funding government spending.
(Excerpt) Read more at telegraph.co.uk ...
The massive dollar strength over the past 5 sessions has been incredible.
” a radically different form of QE that injects money directly into the veins of economy by funding government spending.”
Ain’t nothing new about that.
Could up growth a couple of percentage points if HSBC and the other TBTF banks were allowed to launder drug money again.
I weep for the youth
It might the tipping point if they quit laundering for the Clinton Foundation.
Why? They’re strong enough to loot.
Not me. Most of them voted Dummycrat and they get what they voted for.
I said youth not youts
How did such a mass economic delusion ever evolve where the best and the brightest (?) think they can print their way out of a recession?
Ain’t socialism grand?
The socialist billionares/millionares will make lit like bandits.
Our leaders are forcing us into this hole the world is in
HSBC,,, that’s a BIG dope bank. It was literally started for dope. The opium trade.
Many of them will grow out of it as the real world knocks some sense into their young brains.
I myself was a fool as a youth. It's a painful admission but I actually cast my first vote for McGovern! I liked his idea of having a guaranteed annual income... I was that f@#king stupid..lol
If their going to run red ink, they might as well cut taxes for the MC and LC.
At least they will spend the money into the economy.
Better than giving a couple of more Trillions to Wall Street.
Ok, I will admit I was a knucklehead when I was younger so I’ll give my post a teenie weenie regret emo but that’s it ;P
Why not a form of QE that injects money directly into the veins of economy — by not removing it as taxes in the first place?
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