The Associated Press is out with a new report that lists the five danger signs flashing in front of our eyes of a pending financial disaster. The newswire agency takes a look at some of the reasons why the global stock market is crashing, the global economy isn’t getting better and the central bank can’t do much about it.
Here are the five danger signs the AP points out:
China
“A sharp slowdown in China threatens to remove a pillar of global growth. Slackening demand for raw materials there is hitting producers of oil and metals in other countries. Energy exporter Russia, for instance, slid into recession and its currency has plunged.”
Emerging Markets Going Underwater
“Money is flowing out of so-called emerging markets like Brazil, Russia, South Africa and Turkey. Investors pulled $735 billion out such countries in 2015 — the first year of net outflows since 1988, according to the Institute of International Finance.
“And emerging markets aren’t so emerging any more: they provide 70 percent of expected global growth.”
U.S. Government
The other pillar of the global economy besides China, the U.S., is also now showing signs of weakness. Maybe not a recession, yet. But growth was a weak 0.7 annually during the fourth quarter. Factory output has declined.
Banks Not Faring Well
“The spread of negative interest rates could reduce banks’ profitability, since it squeezes the different between the rates at which banks borrow and at which they lend.
“Sick banks can choke off credit to companies and dump huge costs on governments, shareholders and creditors.”
Central Banks Are Desperate
“With interest rates below zero in some cases, it’s much harder for central banks to apply more stimulus if needed.”
I can’t believe the banks are doing all that bad, with trillions owed in home, auto, student and credit card debt. The interest on my credit cards is 15 to 27 percent. I am ready for a recession, I love when things get cheaper. Or at least do not go up as much as they have over the last 25 years. I use the city bus, so I have not purchased any gasoline since July 2014 and the lower prices have not helped my budget. With the price in diesel being cheaper, I have not seen prices on food or anything else going down yet.
When the MSM starts to publicly point out the negative conditions, and in a manner that offer no sugestions for a solution, consider it as telegraphing a punch.
Its comming (Recession /Greater Depression), and it can not (or will not) be stopped.
Gee, Who or What would benefit from that?