There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.’ ‘
(Economist Ludwig Von Mises)
“China’s economy grew 6.6% in 2018 [Chinese economic data are routinely massaged – the real figure will be lower], its slowest pace in almost 30 years, confirming a slowdown in the world’s second largest economy that could threaten global growth.
“After years of breakneck expansion, the world’s second largest economy is losing steam, official data on Monday confirmed. China’s growth in 2018 was the country’s slowest reported rate since 1990 and down from 6.8% growth in 2017.
“China’s economy grew 6.4% in the fourth quarter from a year earlier, levels last seen in early 2009 at the height of the global financial crisis.
““We see that there are changes in stability, concern about these changes. The external environment is complicated and severe. The economy is facing downward pressure,” said Ning Jizhe, director of China’s National Statistic Bureau, adding that China’s economy remained “steady overall”…
“The latest economic figures suggest China may no longer be able to help shore up weakening global growth, as it has in the past.
“A government campaign to rein in risky debt has been compounded by a trade war with the US, hitting consumer and business confidence. Over the past few months consumer spending, manufacturing output, and investment have reached record lows.”
“A 2016 International Monetary Fund (IMF) report found 38 out of 43 economies whose national debt was 30 per cent higher than its GDP experienced “severe disruption” in the form of financial crises and a decline in growth.
“It also found the probability of a “bad outcome” was imminent if the boom lasted for more than six years — these are all criteria the Chinese economy meets.”
“China-focused investment managers in 2018 endured their most difficult year since the global financial crisis with equity funds suffering widespread heavy losses…”
“Chances that Japan will slide into a recession this coming fiscal year have grown over the past three months, a Reuters poll of economists found, pressured by a global economic slowdown and U.S.-China trade friction…
“The latest data showed Japan’s export growth slowed to a crawl in November as shipments to the United States and China weakened sharply.”
“[Japan’s] Banks, Fitch said in a Jan. 16 report, “have increased lending toward riskier companies in order to cushion profits in a negative interest rate environment.” As a result, Fitch says, capital adequacy ratios “have been declining” and posing “financial stability risks when the economy is likely to slow in 2019.””
“[US] consumer sentiment dropped to the lowest it’s been in two years, according to data released and reported by CNBC on Friday.
“The University of Michigan consumer sentiment index was at 98.3 in December but dropped to 90.7 in January, according to the report. Economists predicted the index to drop in the new year, but not nearly as low.”
“Data showed that 38 per cent of FTSE general retailers [UK] issued profit warnings in 2018, a 50 per cent increase on the previous year and the highest number since 2008, said the EY profit warnings report.
“Half of the profit warnings cited weaker consumer confidence, up from a quarter in 2017.”
“House prices in some of Britain’s wealthiest areas have had up to 25% wiped off their value in 12 months as Brexit turmoil continues, according to the estate agent Your Move.
“That has meant typical price falls in some cases of almost £500,000… On Thursday, the Royal Institution of Chartered Surveyors (Rics) said house prices were falling at their fastest rate in six years, and that the outlook for sales was the weakest in two decades.”
“The Bank of Italy has cut its growth forecast for this year and next while signalling that the euro region’s third-biggest economy might have slipped into a new recession at the end of 2018… Italy has been struggling to break out of a years-long trap of economic stagnation…
“The populist government is counting on its expansive budget and programmes to spur economic growth.”
“47.6 per cent Inflation, minus 2.6 percent growth, 34 percent of people below the poverty line… Argentina’s economy is in a mess, again.”
“There has been no quick respite for Zimbabwe’s battered economy following four days of a massive protest action against steep increases in the price of fuel, with the Confederation of Zimbabwe Industries (CZI) saying as much as $300 million in production had been lost out and the Zimbabwe Stock Exchange (ZSE) halting trade for two days this week.”
“Davos Man is richer than ever. A decade after the financial crisis poured flat champagne on the World Economic Forum, gold-collar executives set to gather there this week have bounced back, and then some… Data from UBS and PwC Billionaires Insights reports show that global billionaire wealth has grown from $US3.4 trillion in 2009 to $US8.9 trillion in 2017.”
“Financial analysts have been frustrated by the global elite’s failure to manage discontent from voters in Europe and the US who are expressing anger over wealth inequality and immigration.
““Judging by the state of the world right now, 10 years on from the financial crisis and the dysfunctional state of global politics, I would suggest that these annual events have achieved the sum total of diddly squat,” says Michael Hewson, chief market analyst at CMC Markets UK.”
“The window to restock monetary ammunition is closing for the world’s major central banks.
“With economic growth slowing and inflation lagging in big economies like the U.S. and euro area, a push to escape crisis-era policy settings that include rock bottom interest rates appears at risk of stalling. That will leave less firepower to fight off the next economic downdraft, threatening a prolonged downturn.”
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