The Party IS over

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Global trade declined 13.5 percent (YoY) in 2015 – 2016 ain’t getting better.

In case you missed it.

A recent Bloomberg article by Citibank headlined “Here comes a global recession” – stated that

From Citibank’s Buiter

“The long-standing fragilities in the world economy relate to the structural and cyclical slowdowns in China and its unsustainable exchange rate regime, the excessive level of debt across many countries and sectors and ongoing regional and geopolitical uncertainty,” the economists said. The economists have accordingly revised their forecast for growth this year in advanced economies, from a 2.4 percent in January 2015 to 1.6 percent currently, and warns there is more to come.”

 

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Adjusting for ‘real’ China growth is amusing. Mind you China cannot assist the drop in global demand – they themselves – have far too much debt and policy problems internally – to promote more debt to the manufacturers.

 

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Full article can be read here (1) but a warning – Buiter is a tad clueless and does suggest fiscal stimulus is required – this on top of the existing debt.

But hey – Krugman – a Nobel prize winning economist – actually recommended this stupid theory to the Bank of Japan in support of Abenomics.

We can see how that turned out can’t we?

Amazed how idiotic economists and the world financial leaders actually are – can you imagine these people running your business?

Then from the Netherlands Bureau of Economic Policy Analysis’s World Trade Monitor – we learn that 2015 trade slump was 13.5 percent in USD terms.

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Note in USD terms.

Exported goods. Please notice that the ‘volume’ looks fantastic – this is existing contracts.

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Exported value. Slump due to the decline in commodity values – a precursor for what is coming.

One can actually understand all countries wanting to reduce their currency value in light of the ‘value’ of goods exported in USD terms.

Blame for the drop is attributed to China and Emerging economies – whilst develop nations rely on consumer spending binge on low interest rates – to boost their GDP.

The Memo and statistics are listed here (2).

The Wicked Witch of the IMF is privy to these figures before their release – one wonders why she advocates further global stimulus when it is obvious that the party has stopped – a big hangover season coming in 2016.

 

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Now the hangover – aspirin anyone? (

 

 

1. http://www.bloomberg.com/news/articles/2016-02-25/citi-here-comes-a-global-recession

2.http://www.cpb.nl/sites/default/files/cijfer/CPB%20World%20Trade%20Monitor%20December%202015/cpb-world-trade-monitor-december-2015.pdf

 

 

 

 

 

 

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