A Quiet Crisis Whispers of Impending Poverty
June 28th, 2010Via: Automatic Earth:
“The ECRI leading indicator produced by the Economic Cycle Research Institute plummeted yet again last week to -6.9, pointing to contraction in the US by the end of the year. It is dropping faster that at any time in the post-War era.”
The latest data from the CPB Netherlands Bureau shows that world trade slid 1.7% in May, with the biggest fall in Asia. The Baltic Dry Index measuring freight rates on bulk goods has dropped 40% in a month.”
…
$2,5 trillion hasn’t done the trick, and neither will $5 trillion. Money velocity is way down and so is M3 broad money supply. How would Bernanke turn that around? The money simply isn’t going anywhere. Except into a deep dark void. It’s disappearing faster than Bernanke can print.
Once the deflation has run its ugly course, and it will be horrendous, printing presses may cause inflation, and given the level of ass-clowniness among economists it’s highly likely that they’ll pick such a course. They’ve never seen a crisis they couldn’t make worse.
Research Credit: dagobaz
my theory (yeah, boring, i know) is that the 2010 Shanghai Expo is not the symbolic event that signals the beginning of China’s ascendancy on the world economic stage but that it will actually turn out to be its high water mark. a brief and intense bubble and then “BOOM”, it all goes down in flames. probably over a period of five to 10 years. 20 max. anyway, it’s all looking quite ominous, “eerie quiet” before the catastrophic storm hits and sweeps it all away…
Look at the demographics – China has 10, maybe 15 years left as an economic powerhouse before its population demographic shifts dramatically towards old age as the ‘one baby’ rule since the 70’s bites very hard.
Meanwhile, India holds all the aces throughout the Twenty-First Century – barring a war or major catastrophe, India is the powerhouse of the world economy well past 2050/60.
The USA has bankrupted itself in the War on Terror and in the long term is a casualty of globalised economics. They literally priced themselves out of most markets whilst distracted by geopolitics and foreign wars.
So, my money is literally with India as the rising star amidst all the chaos, not on too big a catastrophic storm.
How will any super power get a plannable future without proper food and sparse energy?