Category: Global Economy
The analysis published under this category are as follows.
Saturday, February 17, 2024
Why Rising Shipping Costs Won't Cause Inflation / Economics / Global Economy
By: MoneyMetals
Defining inflation as "rising prices" creates all kinds of confusion.
As I explained in-depth, historically, inflation meant an increase in the amount of money and credit in the economy, or more succinctly, an expansion in the money supply. Rising consumer prices - price inflation - is one symptom of this monetary inflation.
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Sunday, December 18, 2022
2023: Preparing for tectonic shifts in the world economy / Economics / Global Economy
By: Dan_Steinbock
Colossal structural shifts are taking place in the global economy, as evidenced by the huge challenges during the ongoing year. In 2023, China seeks recovery, but the West – the US, the Eurozone and the UK, and Japan - will cope with recession and the specter of a debt crisis.
In a recent Foreign Affairs commentary, Mohamed A. El-Erian warned that we are not facing just extraordinarily challenging business-cycle fluctuations, but structural and secular long-term pressures. As a result, “the global economy may never be the same.”
In reality, the “old normal” has been history since 2008 and the consequent debt crises. During the past decade, world economy has been driven by geopolitical agendas, not by economic priorities. And the results have been predictable: catastrophic.
Sunday, November 06, 2022
US Dollar Strength Implications for Global Economies / Economics / Global Economy
By: Nadeem_Walayat
US Dollar Big Picture
Ultimately the fate of the dollar bull market is to spike in a blow off top and then collapse in spectacular style, probably at a faster pace then it is currently going higher.
Now don't take this chart as a literal trend forecast as I don't have the time to undertake such a study right now but it is a rough picture of what I have in mind of how the dollar trend could play out. There will be plenty of time to define a forecast trend pattern over the coming years.
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Tuesday, February 22, 2022
Global Economic Recovery challenges amid new data on lingering pandemics / Economics / Global Economy
By: Dan_Steinbock
There is a common denominator between the Chinese holiday season and the COVID fight. That’s the effort to recover the pre-pandemic demand even amid new global waves of variants. There are lessons, too.Around the world retailers aspire to reinforce sales during major holidays, which have a “multiplier effect” on revenue generation. Such efforts have greater impact when authorities implement additional policy measures to foster consumption.
With the new COVID-19 flare-ups in several cities, including Omicron infections in several Chinese cities, the country’s top economic planner, the NDRC (National Development and Reform Commission) took measures to increase holiday spending and boost the economy during the Spring Festival and the Lantern Festival, along with the Valentine’s Day.
What was the outcome?
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Monday, February 21, 2022
US stagflation overshadows China’s Economic recovery and global prospects / Economics / Global Economy
By: Dan_Steinbock
Recently, the IMF downgraded global growth prospects, due to projected slowdowns in the US and China. Negative prospects could be overcome with right policies, such as trade cooperation.Recently, the International Monetary Fund projected that global growth rate will slow to 4.4% in 2022. In the dire international landscape, global recovery has remained elusive dream since 2017, when US trade wars derailed the impending expansion. Today, unwarranted geopolitics escalate tensions.
Worse, the failure to roll out vaccines could knock another $1.5 trillion from incomes across the South, according to UNCTAD report last fall.
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Saturday, February 13, 2021
US-China Reset Key to Brighter Global Economic Prospects / Economics / Global Economy
By: Dan_Steinbock
After four years of US-Sino tensions, the Biden administration could speed up US recovery, while restoring bilateral trust with China. That would foster global economic prospects. The reverse would undermine those prospects.
In the United States, the third wave of the COVID-19 peaked with 250,000 confirmed cases daily after the holiday period. Following the catastrophic mishandling of the pandemic by the Trump administration, total cases are approaching 27 million and the 440,000 deaths exceed US military fatalities in World War II.
After effective containment, confirmed cases in China remain below 90,000. With the Spring Festival holidays just days away, recent resurgences have renewed concerns about outbreaks and people have been urged to avoid travels during holidays. Despite some unease, public-health authorities believe a major outbreak is unlikely.
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Monday, April 13, 2020
Global Trade: The War of the Throne / Economics / Global Economy
By: Stephen_Merrill
Now scribers, hear the tale of the mightiest battle of humankind. It is the war over the throne of global trade. The ongoing duel between the Rightful King and the Irresistible Force.With the Joker in the mix now, too.
Five Millenia of Global Trade
What tamed the tribalistic human into a more civilized state long ago was the logic and obvious benefits of trade and travel. From its very beginning, the global means-of -exchange facilitating trade was ultimately gold and its monetary stepchild silver. Even when Western Europeans traded with China, India and many others, the primacy of gold and silver was easily adopted by both sides based on their separate tradition.
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Thursday, March 19, 2020
Coronavirus Most Likely GDP Economic Outcome for Q1 and Q2 2020 / Economics / Global Economy
By: Chris_Vermeulen
In this section of this multi-part research article related to the potential economic destruction of the Covid-19 virus event across the global markets (Part I, Part II).
We’re going to peer into data related to the GDP and other factors of the US economy. Remember, the US economy is the largest single economy and consumption component in the world. As we suggested in our earlier research, the US and China (combined) account for about 30% of the total global GDP each year. The top 12+ GDP nations on the planet account for just under 80% of the total annual GDP for the globe. What happens if economic activity and global GDP collapse for the next 24+ months because of the Covid-19 virus?
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Thursday, March 19, 2020
Coronavirus Impact on Global Economic GDP Numbers / Economics / Global Economy
By: Chris_Vermeulen
Continuing our earlier multi-part research post related to our extensive number crunching and predictive modeling systems expectations going forward many years, (Part I) this second part will highlight some existing data points and start to discuss the concepts of what the Covid-19 virus event may do to the immediate global economy. Remember, in the first part of this article, we shared research related to the US Fed Funds Rate (FFR) and how the Covid-19 virus event may create an environment of economic malaise over the next 12 to 24+ months as well as potentially disrupt the population and deficits over a 5+ year span.
This type of event is very similar to war (think WWII) in the sense that consumer spending changes, population growth, and levels change, GDP changes and deficits change for all involved. Our researchers modeled the GDP levels from 2017 will now with the intent of attempting to identify probable outcomes of GDP output throughout the world over the next 5+ years. Throughout these types of events, a massive capital shift takes place where consumers within areas impacted by war shift their spending and purchasing habits to address the immediate real needs of their attempted survival. Speculation vanishes. People only spend on things they are confident they can afford to risk their money on. Anyone who is able to take advantage of the displaced or disparaged has a real opportunity to create some real gains if they don’t become the next displaced or disparaged individual.
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Sunday, February 09, 2020
The End of the Global Economy / Economics / Global Economy
By: Richard_Mills
The Trump administration has just granted its Commerce Department sweeping powers to slap tariffs on countries it decides are manipulating their currencies to the detriment of the United States and its exporting companies.
For some this will come as news; at AOTH, it is confirmation that our earlier warning, reported here, has come true.
In our article ‘US prepares for currency war’, we warned readers about these new powers when they were first proposed by the US government several months ago, amid its trade war with China.
The Commerce Department now says it will proceed with the plan, which gives Commerce a wide scope of power to decide whether or not a country is under-cutting US exporters by keeping its currency artificially low. Whereas Commerce normally follows the advice of the Treasury Department - which issues a twice-yearly report to Congress on suspected currency manipulators - on whether to impose trade sanctions, the new rules allow Commerce to slap duties on goods from accused countries and individual businesses, even in cases where the Treasury did not find them to be guilty of currency manipulation. Bloomberg neatly explains what broadening the Commerce Department’s mandate to impose anti-subsidy duties could mean:
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Friday, January 03, 2020
Where the World Is Going in 2020 / Economics / Global Economy
By: Patrick_Watson
We all want to know the future. Unfortunately, the future isn’t talking. It’s just coming, like it or not.We can, however, make educated forecasts. I think John Mauldin is broadly correct: the future is bright, but we’ll go through darkness first.
In fact, many of us are already in pretty dark situations, “left behind” in a supposedly thriving economy. We’re told there is no inflation even as the real cost of living rises ever higher.
Where is it leading us? To answer that, we have to think about how we got here.
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Tuesday, November 26, 2019
This Artificial Economic Boom Is Coming to an End / Economics / Global Economy
By: John_Mauldin
Nothing is forever, not even debt. Every borrower eventually either repays what they owe or defaults. Lenders may or may not have remedies. But one way or another, the debt goes away.
One of Western civilization’s largest problems is we’ve convinced ourselves debt can be permanent. We don’t use that specific word, of course, but it’s what we do and is why government debt keeps rising.
Tuesday, October 22, 2019
U-Turn or Perfect Storm? Globalization at Crossroads / Economics / Global Economy
By: Dan_Steinbock
Only 12 years ago, globalization peaked. Today, it is in the doldrums and the Trump trade wars have nullified the recovery. We are at a crossroads, where globalization may further stagnate or fall apart.According to the new IMF outlook, global growth is forecast at 3.0% for 2019. That’s the lowest since the global crisis of 2008-9. It is largely due to the US tariff wars, which have contributed to the projected slowdown in the US and China.
The IMF projects growth to pick up to 3.4% in 2020. That, however, is predicated on improvements in a number of emerging economies in Latin America, the Middle East and developing Europe, which, in turn, would require a trade recovery. Thanks to the global slowdown, world growth prospects now hover at levels where they were last in the darkest moments of 2008/9.
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Wednesday, October 02, 2019
Economics of Geopolitic - Why US Senate Targeted Philippines and Other Countries / Economics / Global Economy
By: Dan_Steinbock
The new Senate bill targeting the Philippines and some other countries – Turkey, Egypt, Saudi Arabia - is fueled by controversial political and economic agendas that have caused turmoil since the 1980s.
For some time, US Senators Richard Durbin (Dem, Illinois) and Patrick Leahy (Dem, Vermont) had pushed for an amendment in the 2020 state and foreign operations appropriations bill by the US Senate appropriations committee. Essentially, the amendment would deny entry of Philippine government officials involved in the detention of Philippine opposition Senator Leila de Lima.
Last week, the US Senate panel approved the amendment. Durbin considers De Lima’s detention a “politically motivated imprisonment.” According to Philippine government, De Lima was arrested and detained in 2017 for allegedly asking money from drug convicts to fund her senatorial campaign and for allowing the drug trade to continue in the national penitentiary while she was the justice secretary. Despite evidence, she claims the cases against her are “politically motivated.”
Saturday, September 28, 2019
Trade War - There Are Two Sides to Every Trade. And Both Sides Benefit / Economics / Global Economy
By: Frank_Hollenbeck
In a recent tweet, the US president said, “When you’re almost 800 Billion Dollars a year down on Trade, you can’t lose a Trade War! The U.S. has been ripped off by other countries for years on Trade.”
Trump continues to ratchet up tariffs on China claiming it is stealing billions of dollars by running large trade surpluses with the USA. If this view was held by a country bumpkin it would be irrelevant, but it becomes a serious problem when held by a man who can reduce the real incomes of billions of people, both American and Chinese.
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Friday, September 06, 2019
Globalization Hits a Brick Wall Named Trump / Economics / Global Economy
By: Patrick_Watson
Until about 50 years ago, people paid attention to the area where they lived. They read local papers, shopped at local merchants, and socialized at local events.
Technology ended all that. Now we get our news from the internet. We buy imported goods. We converse on social media with friends thousands of miles away.
This “globalization” process changed the world, sometimes for the better but with significant side effects. Hence, today’s dissatisfaction.
Now, technology is swinging the pendulum back. Globalization is going in reverse. And again, the process will hurt some people.
Monday, July 29, 2019
RIP Global Economic Cooperation, 1944–2019 / Economics / Global Economy
By: Patrick_Watson
By Patrick Watson
Last month, world leaders observed the 75th anniversary of D-Day, when Allied troops stormed the beaches of Normandy, France. It was a critical day in world history.
However, other things happened that year.
As that massive invasion took place, a smaller group quietly planned how to reshape the world economy.
The Second World War was, in part, a result of failure to establish a stable currency system after the first one. That led to tariffs and other trade barriers in the 1930s. Economists and bankers wanted to keep it from happening again, and spent the war years discussing solutions.
Monday, July 08, 2019
Slowing Western economies will force new QE: Trading Setups and Deep analysis / Economics / Global Economy
By: QUANTO
The world is slowing down dramatically. At the same time, the largest economy is hurtling towards an election. Al governments who go to election will try to massage the numbers and pump the stock markets. So while the economy slows, the governmment is buzy pumping markets higher with his tweets.
The slowing down economy can be seen in numerous metrics and we believe central banks will be forced to begin a new round of QE. This time they will need to face up to inflation even as they pump in money.
Key metrics and charts shown below.
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Friday, April 19, 2019
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” / Economics / Global Economy
By: John_Mauldin
After World War II, Japan experienced rapid growth as the US and others helped rebuild its economy. This led to a roaring expansion that culminated in the 1980s Japanese asset bubble.
It popped in the early 1990s bringing what came to be called the “Lost Decade.” It was really more than a decade, as the early 2000s brought only mild recovery.
GDP shrank, wages fell, and asset prices dropped or went sideways at best. Japan is still grappling with it today.
Now the rest of the world is approaching a period that may be an equivalent of Japan’s “Lost Decade.” It won’t be the end of the world, but it might be more painful than in Japan.
Thursday, March 14, 2019
2019 Economic Predictions / Economics / Global Economy
By: Boris_Dzhingarov
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