[CAMWEST-discuss] Economists say 50% chance of new recession
danny_hannan at yahoo.com
Thu Aug 4 01:02:17 UTC 2011
In my not so humble opinion; economists do not use true and relevant measures and metrics, consequently they have no way of making accurate forecasts. If you look at the US GDP since 2007, it has not made a significant recovery, a measure that is not included in the US GDP is the change in the value of the US dollar that the US GDP is measured in. If you take the small GDP growth of the US economy from the "bottom" in March 2009 and factor in the devaluation of the US dollar in that time into the GDP numbers the US and probably the world has been in one continuous recessionary decline.
Coming up in 2012 are a peak in both:
The maturation of a range of bonds issued across the western economy by local, state and sovereign governments and companies.
The refinancing of commercial property mortgages again across the western economy that are some 30-40% larger than current valuations of the relevant properties.
Both have high (40%) projected rates of default.
Neither the US nor the European. Japanese nor UK banks have anything like sufficient reserves to cope with any but the smallest defaults.
Add to that the sovereign debt crises that are unfolding in Europe and the US, the debt and over-capitalisation in China and the projected global shortage of liquid fuel for 2012 and beyond 2014 and the projected global peak coal production for 2012-2015 and you can see why I think that the projection (below) I made in 2001 is right on track.
"The level of debt in western countries and around the world is high. The USA is the prime example requiring 20% of its GDP to service its debt. Escalating oil and energy prices will cause economic downturns and recessions as is current in 2001. As the price of oil and energy increase through this decade it will cause further economic recession, the burden of debt will increase. As the GDP reduces due to recession, the percentage of GDP required to service that debt will increase. Companies and individuals will start to go bankrupt under the burden of debt. These collapses will have effects on other companies and individuals and will eventually cause a domino collapse leading to a depression. I believe some time 2011–2015 but very possibly much sooner."
And because my analysis of my research indicates that the world is currently at or near global peak energy production, there can be no economic recovery because energy is the true currency of our modern world. With energy and particularly fossil fuel production in decline and with increasing energy production costs we need to have a planned and managed global economic contraction. To keep simulating economic growth in such circumstances is just accelerating and exacerbating a catastrophic economic collapse.
danny_hannan at yahoo.com
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