Tag Archives: Global economy

The end of the age of globalisation, by Phil Mullan

The war will push the global economy in the opposite direction—towards more decentralization and autarky—than the globalists want. From Phil Mullan at spiked-online.com:

How Russia’s invasion of Ukraine could hasten the demise of the US-led economic order.

The economic consequences of Russia’s bloody and despicable assault on Ukraine are very much a secondary consideration to the immediate human and geopolitical implications. And since the various national responses to the conflict are still so fluid, it is far too early to be able to identify the war’s precise longer-term economic effects. Nevertheless, it is possible to tentatively suggest what could unfold on the international economic front.

At least in the short term, the direct and indirect disruptions to economic relations arising from the invasion will almost certainly damage prospects for economic growth and boost inflation far beyond the combatant countries. In particular, the relative toughening of sanctions will generate economic difficulties in many areas beyond Russia itself.

While the war is of huge importance geopolitically, it would, however, be misleading to overstate its economic effects, given all the other enormous economic challenges already in place. For example, the Financial Times claims that the war has ‘shattered hopes of a strong global economic recovery from coronavirus’. But this implies that a strong recovery was already on the cards. There has long been a prevalent complacency that ignores the fundamental atrophy afflicting most advanced industrialised countries. War or no war, the high debt and weak investment common to many Western economies are likely to mean a continuation of the sluggish growth of the past decade.

More broadly, the repercussions of the war are likely to reinforce existing economic trends towards autarky and regionalisation, rather than taking us in entirely new directions. Analysts at Goldman Sachs, for instance, suggest that the war is going to damage globalisation and reinforce de-globalisation forces. But this conventional counterposition of ‘de-globalisation’ to ‘globalisation’ does not help clarify what is happening. In practice, market capitalism has always operated both nationally and internationally at the same time. As a result, economic internationalisation (‘globalisation’) can easily co-exist with a heightened focus on national economic considerations (‘de-globalisation’).

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The Worst Case, by The Zman

The Ukraine-Russia war may well inflict a blow on the global economy from which it won’t recover. From The Zman at thezman.com:

It is assumed that the worst case scenario for the Russo-Ukrainian conflict is the direct or even indirect involvement of NATO in Ukraine. If NATO forces came into direct conflict with Russian forces, the result would be total war and total war could easily and quickly lead to nuclear war. This is a remote possibility as NATO has been adamant about not getting militarily involved. The West is content to use the economic weapons at its disposal that it assumes the Russians have anticipated.

While there is nothing worse than nuclear war, the fact that it is the least likely outcome means it is not the worst probable outcome. The fact is, the Cold War was a good lesson in the use and non-use of these weapons. Nuclear weapons are last resort defensive tools. A nation will use them as a last gasp at survival. This is why Israel stole the technology from America in the last century. It is why North Korea is developing the ability to deliver a nuke to North America.

If nuclear holocaust is off the table and a wider scale war in Europe is off the table, then that leaves the softer, less predictable outcomes. We are already seeing big ripples in the financial markets as people try to figure out the downstream consequences of the economic sanctions on Russia. Despite what the media may claim, Russia, Belarus and Ukraine are not hermit kingdoms. They have a lot of economic links to the rest of the world and are a vital part of the global supply chain.

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The Demographic Time Bomb, by James Rickards

Demographics will be economic destiny. From James Rickards at dailyreckoning.com:

The reason humans are dying out is simple and straightforward. It’s best summarized in the famous line from Walt Kelly’s 1970 Pogo cartoon: “We have met the enemy and he is us.”

Humans are the reason humans are dying out. We’re not having enough babies. It’s that simple.

When I use the word “enough” it’s important to put a mathematical value on that. This is not guesswork. The key number is 2.1. That refers to 2.1 children per couple, known as the replacement rate. The replacement rate is the number of children each couple must have on average to maintain global population at a constant level.

A birth rate of 1.8 is below the replacement rate of 2.1. This means your population is declining. It may be aging also as the existing population lives longer and new births neither replace the dying nor lower the median age.

A birth rate of 4.1 is well above the replacement rate. This means your population is expanding and your median age is falling even as individuals live longer. Behavior is complex, but the math is really that simple. The replacement rate of 2.1 is the dividing line between population growth and decline.

Why isn’t the replacement rate 2.0? If two people have two children doesn’t that maintain the population at a constant level? The answer is no because of infant mortality and other premature deaths.

If a couple has two children and one dies before reaching adulthood, then only one child can contribute to future population growth as an adult. A birth rate of 2.1 makes up for this factor and contributes two adult children per two adult parents.

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The Global Economy Was Sinking Long Before The Coronavirus Appeared, by Brandon Smith

The global economy has shown no growth for several years if you back out the debt that was used to “buy” what the statisticians call growth. The coronavirus will undoubtedly make things worse, and the globalists won’t let a good crisis go to waste. From Brandon Smith at alt-market.com:

In order to determine if a geopolitical or economic threat is legitimate, I find it helps to watch how the mainstream propaganda narrative flows and changes. For example, for the past year as almost every fundamental indicator was flashing warning signs on the global economy the primary message in the mainstream was that central banks would never allow any major shocks to the financial system.  In other words, they would pour in cash at the slightest hint of trouble.  The conclusion for the investment world?  To “buy the F’ing dip!”   Why not?  You can’t lose.

Despite the fact that fraudulent stock markets artificially inflated by corporate stock buybacks are irrelevant to the health of our system, they still represent a psychological placebo for the masses.  Very few people care that it is a historic bubble; as long as everything is in the green they assume that all is well with the economy.

In the past, anyone who pointed out that this attitude was a recipe for disaster, anyone who argued that the system was breaking and the Everything Bubble was popping was called a “doom monger” or “chicken little”.

I’ve noticed very recently (in the last week) that this attack response is shifting in an interesting way. Where propaganda peddlers used to call us “paranoid”, now they argue that “our prepping or precious metals stacking won’t save us…”  People are “coming to take our supplies…” they say. That’s quite a 180 degree flip flop. As preppers and alternative economists are proven more and more right everyday, the narrative has changed from telling us we’re wrong, to telling us we will be sorry for being right.

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These New Numbers Are Telling Us That The Global Economic Slowdown Is Far More Advanced Than We Thought, by Michael Snyder

Perhaps the whole string of stock markets around the globe that topped out in 2018 were trying to tell us something. From Michael Snyder at theeconomiccollapseblog.com:

We continue to get more confirmation that the global economy is slowing down substantially.  On Monday, it was China’s turn to surprise analysts, and the numbers that they just released are absolutely stunning.  When Chinese imports and exports are both expanding, that is a clear sign that the global economy is running on all cylinders, but when both of them are contracting that is an indication that huge trouble is ahead.  And the experts were certainly anticipating substantial increases in both categories in December, but instead there were huge declines.  There is no possible way to spin these numbers to make them look good…

Data from China showed imports fell 7.6 percent year-on-year in December while analysts had predicted a 5-percent rise. Exports dropped 4.4 percent, confounding expectations for a 3-percent gain.

China now accounts for more total global trade than the United States does, and the fact that the numbers for the global economy’s number one trade hub are falling this dramatically is a major warning sign.

And of course it isn’t just China that is experiencing trouble.  In fact, we just witnessed the worst industrial output numbers in Europe “in nearly three years”

Adding to the gloom were weak industrial output numbers from the euro zone, which showed the largest fall in nearly three years.

Softening demand has been felt around the world, with sales of goods ranging from iPhones to automobiles slowing, prompting profit warnings from Apple among others.

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The Global Economy Is Not Recovering—Just Look at the Data, by John Mauldin

The data are contradicting the popular synchronized global recovery narrative. From John Mauldin at mauldineconomics.com:

Central banks think the US and global economies are about to break from the post-recession doldrums. They believe their aggressive monetary policies—along with tax cuts and other factors—are finally bearing fruit.

As a result, the Fed is now tightening policy to prevent this inevitable growth sparking too much inflation. My friend Lakshman Achuthan of the Economic Cycles Research Institute (ECRI) is not convinced.

He recently sent some slides I want to share with you.

Economic Growth Is Slowing Down

The first one shows that the present, low-grade expansion phase is the slowest in a series. By the way, the ECRI is as close as we have to an “official” economic cycle watch service in the country.


Source: Economic Cycles Research Institute

This is growth during times when the economy is not in recession, which should be considerably higher than the full-cycle averages. It has been falling steadily since the 1970s and is now below 2%.

If the best we can do is 2% (not counting recessions), it’s hardly time to proclaim victory.

The next chart looks at the ECRI US Coincident Index, which is their alternative growth measure. The shaded areas are cyclical downturns, the three most recent of which did not reach recession status.


Source: Economic Cycles Research Institute

The important point here is we see little or no improvement in the growth rate. Since 2010, it has moved sideways in a tight range. In the last two years, it moved up to about the middle of the range, which is positive but doesn’t mean the US economy is off to the races.

GDP Growth Stalled in the Largest Economies

Finally, and most ominously, Lakshman shows this chart of quarterly GDP growth in the three largest developed market economies.


Source: Economic Cycles Research Institute

We see in all three places that quarterly growth peaked in mid-2017 and then fell in the last quarter. Yet the experts tell us a synchronized global recovery is forming. Really?

What I see here is a synchronized downturn. Granted, it’s just a couple of quarters but early data makes Q1 2018 look lower still.

If a recession is coming, GDP growth will decline from its present level to 0% or below. That process will likely unfold over a few quarters—and may already be beginning.

To continue reading: The Global Economy Is Not Recovering—Just Look at the Data

What Will The Global Economy Look Like After The ‘Great Reset’? by Brandon Smith

Brandon Smith speculates on what happens after the crash. From Smith at alt-markets.com:

A very common phrase used over the past couple years by the International Monetary Fund’s Christine Lagarde as well as other globalist mouthpieces is the “global reset.” Very rarely do these elites ever actually mention any details as to what this “reset” means. But if you take a look at some of my past analysis on the economic endgame, you will find that they do, on occasion, let information slip which gives us a general picture of where they prefer the world be within the next few years or even the next decade.

A few goals are certain and openly admitted. The globalists ultimately want to diminish or erase the U.S. dollar as the world reserve currency. They most definitely are seeking to establish the International Monetary Fund’s Special Drawing Rights basket system as a replacement for the dollar system; this plan was even outlined in the Rothschild run magazine The Economist in 1988. They want to consolidate economic governance, moving away from a franchise system of national central banks into a single global monetary authority, most likely under the IMF or the Bank for International Settlements. And, they consistently argue for the centralization of political power in the name of removing legislative and sovereign barriers to safer financial regulation.

These are not “theories” of fiscal change, these are facts behind the globalist methodology. When the IMF mentions the “great global reset,” the above changes are a part of what they are referring to.

That said, much of my examinations focus on these macro-elements; but what about the deeper mechanics of the whole scheme? What kind of economic system would we wake up to on a daily basis IF the globalists get exactly what they want? This is an area in which the elites rarely ever comment, and I can only offer hypothetical scenarios. I am basing these scenarios on the measures that the establishment most obsessively chases. If they want a particular social or economic change badly enough, the signs become obvious.

Here is what the world would probably look like after a global economic reset…

Initial Crisis

Who knows what the trigger will be? There are so many potential catalysts for economic instability that there is no way to make a prediction. The only thing that is certain is that one or more of these catalysts will be triggered. A Saudi depeg from the U.S. dollar, a large scale terrorist attack, a general rout in stock markets due to a loss of faith in central bank policy, a confrontation between Eastern and Western powers. It doesn’t really matter much. All of it is designed to produce one outcome — chaos. To which the globalists will offer “order,” their particular order using their particular solutions as “objective mediators.”

In our highly interdependent system in the West in which more than 80 percent of the population has been domesticated and is psychologically incapable of self-reliance, it is very likely that a disruption of normal supply chains and services would result in considerable poverty and death. Such a threat would invariably lead frightened and unprepared people to demand increased government controls so that they can return to the level of comfort they have grown accustomed to within the grid.

To continue reading: What Will The Global Economy Look Like After The ‘Great Reset’?