NEW RECESSION THREATENS the GLOBE
[slideshow]
NOTE: The following statistics come from the Telegraph’s International Business Editor.
Our Christian response? – Be prepared,
be praying, be out of debt, be ready to help. Forewarned is forearmed.
“NEW RECESSION THREATENS the GLOBE”
-Ambrose Evans-Pritchard (Nov 10).
The OECD’s index of leading indicators for China, India, Brazil,
Canada, Britain and the eurozone have all tipped below the warning
line of 100, with the pace of the decline in Europe exceeding the
onset of the Great Contraction in early 2008.
Professor Simon Johnson, a former chief economist at the IMF,
rattled nerves earlier this week by warning the world is “looking
straight into the face of a great depression”.
The grim data is coming thick and fast. Japan’s machinery orders
fell 8.2pc in September as the post-Fukushima rebound lost steam
and the delayed effects of the super-strong yen began to bite.
Export orders have been declining for eight months. “Outright
contraction is possible in the quarters ahead,” said Mark Cliffe
from ING.
Exports in the Philippines dropped 27pc in September, the sharpest
fall in two years. Korea’s exports have showed sharply, caused by
a 20pc slide in shipments to Europe. Manufacturing has been
contracting for the past three months.
Christine Lagarde, the IMF’s chief, warned in Asia that “there are
dark clouds gathering in the global economy. Countries need to
prepare for any storm that might reach their shores”. She said
“adverse feedback loops” are at work as financial stress and
economic woes feed on each other.
China’s carefully managed soft landing has turned uncomfortably
hard, with ripple effects through the commodity markets. Spot
iron-ore prices have dropped 30pc since July to $126 a tonne.
Copper prices have fallen 20pc since August.
Barclays Capital said the risks of contagion to China has become
serious. The bank is monitoring the country’s “key high frequency
data” for early warning signs of the sort of sudden crash in metals
demand seen during the Lehman crisis…
“The credit spigot has been turned off in the US,” said Chris Whelan
from Institutional Risk Analytics…
Fiscal and monetary stimulus has disguised the underlying sickness
in the debt-laden economies of the West over the past two years.
This heavy make-up has at last faded away, exposing the awful visage beneath.
It is a delicate moment. The risk of a synchronised slump in Europe,
the US and East Asia is bad enough. What is chilling is to face such a possibility with the monetary pedal already pushed to the
floor in the US, UK and Japan.
Worse yet is to do so with Europe spiraling into institutional self-destruction