AuthorTopic: Global Recession Accelerating toward Depression  (Read 978 times)

Thomas Lewis

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Global Recession Accelerating toward Depression
« on: October 22, 2015, 04:32:37 AM »

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The weather forecast says sunny and mild. Let’s go shopping. (Wikipedia Photo)

Published on The Daily Impact on October 21, 2015


With the mainstream media devoting 80% of their time covering the contest to see what color uniform the captain of the USS Titanic will be wearing in 2017; with the Tea Party Taliban — 40 fundamentalist members of the House of Representatives — bringing the federal government to its knees; the storm clouds of a great global depression are building into our skies from all directions, largely unacknowledged even as they begin to blot out the sun.

Any economy is a pyramid whose broad base is comprised of the middle class — people who have enough money to provide a decent life for themselves. They do this by spending their money on the necessities of life, thus giving life to businesses organized to provide them with those necessities. This activity is called trade, and where there is no trade, there is no economic life.

Even as recession looms there is plenty of trade going on. But it’s not so much trade in the necessities of life, but gambles on the future value of necessities, on short positions and leveraged positions and junk debt and derivatives and indexes, indulged in by riverboat gamblers throwing around other peoples’ money. The one percent of the world’s population who own 50% of the world’s wealth are having a wonderful time at the casino, they’re getting richer by the minute and will tell you that everything is wonderful.

But the trade in the necessities of life, the trade that sustains economies instead of blowing them up, as the gamblers always do, is in desperate trouble, for one overwhelming reason. In most of the world today, the people who must buy the necessities of life don’t have the money to do so. Or to put it another way, the broad foundation of the pyramid is collapsing.

According to one of the world’s largest banks, Britain’s HSBC, global trade volume was down 8.4% in the first half of this year (the latest numbers are for June). That means, sayeth the bankers, that we — all of us, the whole world — are already in a dollar recession.

For decades, the driver of the world economy has been China, as it flooded the world with cheap exports and feverishly imported oil, coal, concrete, steel and dollars. Now the driver is coasting, rapidly losing power: imports to China were down 20% in September (year-to-year) and exports were off 3.7%. The China Containerized Freight Index, which has been tracking shipping volumes for 17 years, has been dropping precipitously for over a year and has just hit an all time low.

The Masters of the Universe (irony alert: this is the term of art used here to denote the class of hedge fund, equity management shadow bankers who routinely blow up the world for profit) who saw the Chinese decline coming assumed that the world’s other emerging markets, such as Brazil, Turkey, India, Russia and the like, would pick up the slack. Indeed, the Masters turned firehoses of capital on the emerging markets for the past several years, inflating bubble after bubble after bubble in their frantic rush to realize the returns on investment of their dreams.

The dreams have turned to nightmares. The collapse in commodity prices (a consequence of the slowing of the developed economies), among other things, has wrecked the frail emerging markets, and the firehoses of capital are pointing the other way. The International Monetary Fundand the Bank of England, among many others, are warning that the billions of dollars of investment capital now being sucked out of the emerging economies, and trillions of dollars in loans that can never be repaid, pose an existential threat to the economies of the world.

If you think the U.S. is immune from these raging financial fires, think again. Debt, like dry tinder, is everywhere and the hot winds are spreading and fanning embers everywhere:

  • American retail giants that once dominated the world — McDonald’s, Walmart, Sears, Microsoft, Hewlett-Packard, even Facebook and Twitter — are sick and dying, their revenue, profit and stock vital signs weak and thready, as they say in the ICU. The surgeons are hacking off limbs — closing stores and firing people — as fast as they can, trying to save the organism.
  • The shipping of goods within the U.S. — the bedrock measure of buying and selling, has declined every month (year-to-year) since February, and that includes September, the peak month for shipping holiday merchandise to stores for selling in the season in which many stores make their profit for the year.
  • A report from CNBC showing both retail sales and wages flatlining was headlined: “Consumers shutting down as US economy deflates.”

It’s happening all over the world.

This has been a bulletin from The Daily Impact. We now return you to our regular programs: financial advice from Don “I’m really, really rich” Trump and self-defense classes from Dr. Ben “shoot that guy behind the counter” Carson.


Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

« Last Edit: October 22, 2015, 04:33:36 AM by Surly1 »

Offline MKing

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Re: Global Recession Accelerating toward Depression
« Reply #1 on: October 22, 2015, 06:09:48 AM »
I didn't see any mention of the current world GDP having gone negative. So if the author cannot even claim a recession based on the standard definition of such things, how in the world can he skip that required step and accelerate right into a Depression? This was the same kind of nonsense proclaimed in 2008, which tuned out to be just a recession, and I suppose because this disappointed the chicken little blogosphere, they are now even MORE eager to recycle bad ideas that didn'tt work before? Except doubling down, to convince folks that they really MEAN it this time?
Sometimes one creates a dynamic impression by saying something, and sometimes one creates as significant an impression by remaining silent.
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Offline Ka

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Re: Global Recession Accelerating toward Depression
« Reply #2 on: October 22, 2015, 01:50:15 PM »
Without denying TL's overall message, I find it strange that he speaks of the middle class being unable to afford life's "necessities". What they (we) are unable to afford are things that are needed to be middle class: big houses with  yards, eating out, private automobiles, etc. -- all of which are optional, and all of which have got to go anyway.

Offline RE

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Re: Global Recession Accelerating toward Depression
« Reply #3 on: October 22, 2015, 02:38:20 PM »
Without denying TL's overall message, I find it strange that he speaks of the middle class being unable to afford life's "necessities". What they (we) are unable to afford are things that are needed to be middle class: big houses with  yards, eating out, private automobiles, etc. -- all of which are optional, and all of which have got to go anyway.

Another point is that once they can't afford the McMansion and Carz, they're no longer middle class.

In terms of "life's necessities", the best metric would be the ever increasing number of people on food stamps.


I think once you are getting food stamps, you are no longer middle class.  Fewer shoppers at Walmart, profits down, fewer container ships from China, etc.  The economy is clearly contracting and the middle class is a dying breed.

RE
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Offline Petty Tyrant

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Re: Global Recession Accelerating toward Depression
« Reply #4 on: October 22, 2015, 04:26:14 PM »
I didn't see any mention of the current world GDP having gone negative. So if the author cannot even claim a recession based on the standard definition of such things, how in the world can he skip that required step and accelerate right into a Depression? This was the same kind of nonsense proclaimed in 2008, which tuned out to be just a recession, and I suppose because this disappointed the chicken little blogosphere, they are now even MORE eager to recycle bad ideas that didn'tt work before? Except doubling down, to convince folks that they really MEAN it this time?

Recession doesnt normally happen after banks fail and need bailing out,  recession doesnt normally involve money printing full force for 7 years creating more debt than in the last hundred. The economy is in such great shape with the recovery since then that  the us fed says it will lift interest rates off zero,  and really means it this time, Right?
« Last Edit: October 22, 2015, 04:28:40 PM by Uncle Bob »
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Offline Mercury

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Re: Global Recession Accelerating toward Depression
« Reply #5 on: October 22, 2015, 07:10:17 PM »
I didn't see any mention of the current world GDP having gone negative. So if the author cannot even claim a recession based on the standard definition of such things, how in the world can he skip that required step and accelerate right into a Depression? This was the same kind of nonsense proclaimed in 2008, which tuned out to be just a recession, and I suppose because this disappointed the chicken little blogosphere, they are now even MORE eager to recycle bad ideas that didn'tt work before? Except doubling down, to convince folks that they really MEAN it this time?

Recession doesnt normally happen after banks fail and need bailing out,  recession doesnt normally involve money printing full force for 7 years creating more debt than in the last hundred. The economy is in such great shape with the recovery since then that  the us fed says it will lift interest rates off zero,  and really means it this time, Right?

Yeah the wreckovery is doing great. Look how well these titans of industry are performing!

Q3 Update:
Caterpillar revenue miss
Freeport MacMoran revenue miss
3M revenue miss
Dow Chemical revenue miss
Quest Diagnostics
American Express
Las Vegas Sands revenue miss
AT&T revenue miss
Hynix Semiconductor revenue miss
Yahoo revenue miss
Harley Davidson revenue miss
Chipotle revenue miss
Johnson & Johnson revenue miss
IBM revenue miss
Morgan Stanley revenue miss
Halliburton revenue miss
Netflix revenue miss
KeyCorp revenue miss
Honeywell revenue miss
GE revenue miss
Intel revenue miss
Goldman Sachs revenue miss
Wynn revenue miss
PPG revenue miss
JPMorgan revenue miss
Dominos revenue miss
EMC revenue miss
Monsanto revenue miss
Yum Brands revenue miss
Alcoa revenue miss
Adobe revenue miss
Illumina revenue miss
Dupont revenue miss
Oracle revenue miss

 :laugh: :laugh: :laugh:
Do you know what 'Nemesis' means?

Offline Mercury

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Re: Global Recession Accelerating toward Depression
« Reply #6 on: October 22, 2015, 07:18:40 PM »
Without denying TL's overall message, I find it strange that he speaks of the middle class being unable to afford life's "necessities". What they (we) are unable to afford are things that are needed to be middle class: big houses with  yards, eating out, private automobiles, etc. -- all of which are optional, and all of which have got to go anyway.

You're basically speaking about the entire economy here. If even one of these pillars crumbles it won't be long before it's "lights out". I don't  think there's a halfway house between the hyper-consumption system we have, encapsulated by big houses, dining out and cars and the termination of BAU. That's why the money-boys are doing "whatever it takes" to prevent it. Otherwise, they could have all let it slip away back in 2008, suffered a big fat recession, and waited for the reset. But they didn't...they fought against it, tooth and nail.
« Last Edit: October 22, 2015, 07:21:00 PM by Mercury »
Do you know what 'Nemesis' means?

 

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