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The Economist: The world economy: Watch out
It is only a matter of time before the next recession strikes. The rich world is not ready
THE struggle has been long and arduous. But gazing across the battered economies of the rich world it is time to declare that the fight against financial chaos and deflation is won. In 2015, the IMF says, for the first time since 2007 every advanced economy will expand. Rich-world growth should exceed 2% for the first time since 2010 and America’s central bank is likely to raise its rock-bottom interest rates.
However, the global economy still faces all manner of hazards, from the Greek debt saga to China’s shaky markets. Few economies have ever gone as long as a decade without tipping into recession—America’s started growing in 2009. Sod’s law decrees that, sooner or later, policymakers will face another downturn. The danger is that, having used up their arsenal, governments and central banks will not have the ammunition to fight the next recession. Paradoxically, reducing that risk requires a willingness to keep policy looser for longer today.
WNU Editor: Why this economics post? Economic crisis tend to bring about wars and conflicts 12 - 18 months later. The bigger the crisis .... the bigger the conflict. That is why these times are very troubling .... we are not talking about a minor correction or a short term recession .... we are talking about events that may have the capacity to overwhelm the system. The consequences of such a development .... I shudder when I think about it.
2 comments:
Obama did not back Mubarak, which helped lead to his ouster.
If we had said good words I do not know that he would still be in power. (We could have voiced support by saying he was elected. Of course cynics would say that it was a rigged election. Sure it was rigged. I might also say the same of American elections to some extent too.).
That aside people have pointed out the rise in wheat prices in 2011 led to a lot of economic distress and thus sparked or fueled the unrest.
The initial spark was a Tunisian street vendor, who despaired of feeding his family (& the general cost of living) and so he immolated himself in protest. The guy was working and was not a charity case.
http://en.wikipedia.org/wiki/Mohamed_Bouazizi
THis link has an interesting graph.
http://www.zerohedge.com/news/deja-food-will-social-unrest-surge-corn-prices-soar
Russian connection. Egyptians prefer Russian/Ukrainian wheat (& there was a drought).
http://www.theglobalist.com/egypt-wheat-and-revolutions/
http://www.globalpost.com/dispatches/globalpost-blogs/macro/amber-waves-uprising-wheat-and-mideast-unrest
http://www.pbs.org/newshour/updates/world-july-dec11-food_09-07/
Few economies have ever gone as long as a decade without tipping into recession
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That is because we unhinged ourselves from the self correcting golden anchor of the monetary universe and adopted central planning and have free floating currencies that can be printed out of thin air in order to fight foreign wars ie: WW 1 or rather the introduction of the US federal reserve ..
Foreign wars are impossible to fight and maintain when only gold is excepted as money because you cannot print gold.. sooner or later you simply run out of money ..
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