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View Full Version : Int'l Issues The recession is now worldwide.


Direckshun
06-01-2012, 08:54 AM
I think we all saw this coming.

Still pretty shocking to think about, however, on a planet-wide scale.

http://www.slate.com/articles/business/moneybox/2012/05/global_economic_crisis_china_india_brazil_are_slowing_down_plunging_world_into_possible_recession_.h tml

The Coming Global Recession
China, India, and Brazil are all slowing down simultaneously, plunging the entire world into economic crisis.
By Matthew Yglesias
Posted Wednesday, May 30, 2012, at 4:07 PM ET

America is still recovering from the Great Recession and Europe is melting down, yet from a global perspective, the economy has never been as healthy or prosperous. The world economy enjoyed amazing growth from 2002-08, took a small dip in 2009, and then went back to growing. Sadly the good news seems to be coming to an end in Brazil, China, and India, and that’s horrible news for us.

Mercedes-Benz, Brazil’s No. 2 maker of trucks and buses, announced early Wednesday morning that it would be laying off 1,500 workers in Latin America’s largest market. Volvo AB has also announced a temporary halt to Brazilian truck production. The first half of May saw a staggering 22 percent year-on-year drop in Brazilian heavy vehicle purchases. Overall economic growth slowed last year to a bit under 3 percent, and Brazil’s finance minister recently had to cut the 2012 growth forecast to a number many private forecasters think is still too high. And problems for Brazil aren’t just problems for Brazil, as neighboring Argentina (and other smaller countries like Uruguay and Paraguay) rely on Brazil to buy their exports.

More alarmingly, both China and India are running into trouble. Catch-up growth, in which a poor country improves its public policy, begins importing foreign production techniques, and gets rapidly richer is a time-honored Asian tradition. We saw it in Japan, then South Korea, then Taiwan and other Asian “tiger” economies in the 1980s and ’90s. China and India are so large that their catch-up growth was able to raise the entire worldwide rate of economic growth. That’s why the world economy kept growing through the 2008-09 financial calamity.

The slowdown in India, which remains a much poorer country than China, is very alarming. Even as its economy surged recently, the country did little to raise the productivity of the agricultural sector in which most Indians work. The Indian government had a promising idea on that score: to open the retail sector to foreign firms such as Wal-Mart and Carrefour. Large international chains have experience working with farmers in more productive countries and could be the mechanism for transferring better methods to Indian growers. That could have meant higher agricultural wages and better living standards for India’s urban poor. But faced with pressure from incumbent retailing interests, the government backed down from the plan. That was both a lost opportunity and a blow to the confidence of foreign investors.

And then there’s China. Most of China’s growth takeoff in the aughts was powered, famously, by exports to rich countries—especially the United States. When we stumbled into recession, China needed to change. And change it has. The country’s total trade surplus is now modest enough that it runs deficits in some months.

But rather than rebalancing to a more conventional consumer-focused economy, the Chinese government weathered the recession by engineering an unprecedented boom in domestic real estate and infrastructure investment. Investment is a good thing, but there was simply no way for the country to sustain double-digit growth in investment. Inevitably, the real estate market has started to unravel and even though the official GDP figures still look strong, other data less amenable to manipulation such as electricity demand and railroad shipments show a sharp slowdown.

Which brings us back to Brazil’s trucks. The world’s developing economies are now tightly linked. China’s boom has been excellent news for Brazil’s exports of airplanes and agricultural products, and, as we’ve seen, Brazilian growth has powered Argentine exports. That in turn has produced a market throughout the region for local car and truck production. Commodity exports have also spurred Africa’s best decade on record. The continent is such an economic minnow that its solid growth has gone largely unnoticed, but in terms of human welfare, increased incomes in the poorest part of the world have meant huge gains, including a very rapid decline in child mortality.

The Chinese growth dynamo that rescued the world economy after the financial crisis isn’t going to reappear this time around. That means the stakes as Europe confronts the ongoing meltdown of its banks and America faces the prospect of a new debt ceiling standoff are higher than ever. The bad economic news of 2008-09 came with the major silver lining that growth continued in the places that needed it most. This time around, if the rich countries can’t get our act together, the whole world will spiral into recession.

Bewbies
06-01-2012, 09:07 AM
Next thing you're gonna tell me is that we put a man on the moon!

Seriously, this is news to you?

Direckshun
06-01-2012, 09:11 AM
Next thing you're gonna tell me is that we put a man on the moon!

Seriously, this is news to you?

Um.

I think we all saw this coming.

mikey23545
06-01-2012, 09:41 AM
We're transitioning from "It's Bush's fault!" to "It's the rest of the world's fault!"

fan4ever
06-01-2012, 09:47 AM
Well at least we have company.

BucEyedPea
06-01-2012, 11:07 AM
Of course, it's global—we're all interconnected with global ( govt created ) financial institutions such as: central bank using global Keynesianism that prints money out of thin air.

Stewie
06-01-2012, 11:25 AM
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BucEyedPea
06-01-2012, 11:32 AM
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He says the "UNDERLYING STRUCTURE" is weak. That's exactly what Ron Paul, Peter Schiff and the Austrians have been saying for awhile now. This has to do with the last 16-20 years of damage, much of it under Greenspan time at the Federal Reserve.

Ace Gunner
06-01-2012, 01:43 PM
Well at least we have company.

and misery loves that :D

but look at the bright side -- central and south america has never been wealthier than now

Taco John
06-01-2012, 02:04 PM
http://i.imgur.com/Bu9Mw.jpg

RaiderH8r
06-01-2012, 02:16 PM
http://i.imgur.com/Bu9Mw.jpg

This needs to be said again.

Amnorix
06-01-2012, 02:25 PM
Of course, it's global—we're all interconnected with global ( govt created ) financial institutions such as: central bank using global Keynesianism that prints money out of thin air.


Ah yes, back to the gold standard, which couldn't support 1/100th of the world economy. It's so nice having you around to show us how many different forms insanity can take.

Stewie
06-01-2012, 02:35 PM
Ah yes, back to the gold standard, which couldn't support 1/100th of the world economy. It's so nice having you around to show us how many different forms insanity can take.

Why are the central banks buying gold hand over fist? If you noticed in the past couple of days bank holdings of gold is the benchmark for solvency. The ownership of devalued real estate, crappy company stock holdings, derivatives and the like are no longer "valued."

Gold is up $60+ today!... not because you bought, but because sovereign nations and smart money did. It's a 12-year bull market.

RNR
06-01-2012, 03:14 PM
Ah yes, back to the gold standard, which couldn't support 1/100th of the world economy. It's so nice having you around to show us how many different forms insanity can take.

Just for the heck of it, I did a quick search. Here is what I found:
There was approximately $1.1 trillion dollars in circulation as of May 23 2012, of which $1,06 trillion Was in Federal Reserve notes. http://www.federalreserve.gov/faqs/currency_12773.htm
The consensus of the sites I checked report our gold holdings at around $262 billion. I think anyone who would wish to return to the gold standard is, as you describe insane.
Nixon killed that years ago, and Roosevelt already set another standard in case that system would be implement again. This is another reason I get a chuckle out of people thinking they have beaten the system in case of a total financial collapse by owning gold. They will surrender it by force at whatever price is set by our government. That value will be determined by how serious the collapse is~

Stewie
06-01-2012, 03:21 PM
Just for the heck of it, I did a quick search. Here is what I found:
There was approximately $1.1 trillion dollars in circulation as of May 23 2012, of which $1,06 trillion Was in Federal Reserve notes. http://www.federalreserve.gov/faqs/currency_12773.htm
The consensus of the sites I checked report our gold holdings at around $262 billion. I think anyone who would wish to return to the gold standard is, as you describe insane.
Nixon killed that years ago, and Roosevelt already set another standard in case that system would be implement again. This is another reason I get a chuckle out of people thinking they have beaten the system in case of a total financial collapse by owning gold. They will surrender it by force at whatever price is set by our government. That value will be determined by how serious the collapse is~

Gold has killed any other investment over the past 12 years... by miles.

Fiat money is... well paper, hence the reason gold has skyrocketed.

Put your money in a CD or real estate or sovereign debt. MONEY!

RNR
06-01-2012, 03:26 PM
Gold has killed any other investment over the past 12 years... by miles.

Fiat money is... well paper, hence the reason gold has skyrocketed.

Put your money in a CD or real estate or sovereign debt. MONEY!

LMAO where in my post did you conclude I said or even imply gold was not performing well?

HonestChieffan
06-01-2012, 03:31 PM
How do you say its Bushs fault in German?

RNR
06-01-2012, 03:35 PM
How do you say its Bushs fault in German?

I recall people saying he is a Nazi...wait...I recall people saying Barry is a Nazi...they both must be involved~

Stewie
06-01-2012, 04:04 PM
LMAO where in my post did you conclude I said or even imply gold was not performing well?

You posted the boiler plate BS about gold. Gold sucks because FDR, Nixon, blah blah blah. It's not money, yet in the last two days it's the asset international banks must hold because of its value.

The sheeple are stupid investors.

RNR
06-01-2012, 04:25 PM
You posted the boiler plate BS about gold. Gold sucks because FDR, Nixon, blah blah blah. It's not money, yet in the last two days it's the asset international banks must hold because of its value.

The sheeple are stupid investors.

LMAO what did I say about Roosevelt or Nixon that was false?

BucEyedPea
06-02-2012, 09:01 AM
LMAO what did I say about Roosevelt or Nixon that was false?

that gold sucks.

BucEyedPea
06-02-2012, 09:01 AM
Why are the central banks buying gold hand over fist? If you noticed in the past couple of days bank holdings of gold is the benchmark for solvency. The ownership of devalued real estate, crappy company stock holdings, derivatives and the like are no longer "valued."

Gold is up $60+ today!... not because you bought, but because sovereign nations and smart money did. It's a 12-year bull market.

...and China. I believe even India.

mikey23545
06-02-2012, 09:07 AM
I recall people saying he is a Nazi...wait...I recall people saying Barry is a Nazi...they both must be involved~

Barack is a Communist, not a Nazi.

Well, maybe a bit of both, but mostly Communist.

BucEyedPea
06-02-2012, 10:25 AM
Barack is a Communist, not a Nazi.

Well, maybe a bit of both, but mostly Communist.

I'd say he's a frustrated Communist ( or Socialist ) since checks and balances stifle his natural urge toward these ideologies. That winds up making him a corporatist, which is was Romney is. This is why we wind up with no real changes in the direction of "liberalizing" our economy but instead move into more authoritarianism. Remember, liberal once mean free-markets as in free-enterprise—not govt steered systems. Obama practices crony socialism and Mitt will practice crony mercantilism. Either one would make Mussolini proud.

RNR
06-02-2012, 11:10 AM
that gold sucks.

So you think returning to the gold standard is a good idea?

bandwagonjumper
06-02-2012, 03:40 PM
I'd say he's a frustrated Communist ( or Socialist ) since checks and balances stifle his natural urge toward these ideologies. That winds up making him a corporatist, which is was Romney is. This is why we wind up with no real changes in the direction of "liberalizing" our economy but instead move into more authoritarianism. Remember, liberal once mean free-markets as in free-enterprise—not govt steered systems. Obama practices crony socialism and Mitt will practice crony mercantilism. Either one would make Mussolini proud.

The american political system isn't geared towards radical policies. Even if Ron Paul were president, Congress and Senate were full of Paulistas there couldn't pursue all your idealistic policies. The constitution with its check and balances prohibit it.