World Economy Collapsing , Stock Market Crashing Because of The Coronavirus Outbreak

World Economy Collapsing , Stock Market Crashing Because of The Coronavirus Outbreak





For more than a decade, the global economy has steadily grown quarter after quarter, but it looks like that streak is about to come to a very abrupt ending. The coronavirus outbreak in China has brought the Chinese economy to a virtual standstill, and as a result critical supply chains are in a state of chaos all over the world. And since it doesn’t look like the Chinese economy will be able to return to normal for an extended period of time, it appears that a worldwide economic slowdown is imminent. I warned about this the other day, but now we have even a clearer picture of what is happening. According to Capital Economics in London, this coronavirus outbreak will cause the global economy to shrink this quarter, and that will be the very first time this has happened since 2009… The economic casualties from China’s coronavirus epidemic are mounting as Asian and European auto plants run short of parts, free-spending Chinese tourists stay home and American companies brace for unpredictable turbulence. That’s just the start of a financial hangover that is expected to linger for months even if the flulike illness is soon brought under control, economists and supply chain experts say. The Chinese epidemic’s aftereffects will likely cause the global economy to shrink this quarter for the first time since the depths of the 2009 financial crisis, according to Capital Economics in London. And if the global economy shrinks for two quarters in a row, that will officially meet the definition of a “global recession”. So here we are on the verge of the worst economic downturn in more than a decade, and even if this outbreak miraculously ended tomorrow it would still take quite an extended period of time for global supply chains to return to normal. In particular, the auto industry has been hit extremely hard…

Global Debt Bubble Getting Worse -- Economic Collapse - Stock Market Crash

Global Debt Bubble Getting Worse -- Economic Collapse - Stock Market Crash







Bank of America short while ago calculated that since the collapse of Lehman, government debt has intensified by $30Trillion, corporates debt by $25 Trillion, household by $9 Trillion, and financial debt by $2 Trillion. And with central banks awaited to support government debt, Bank of America warns that the biggest recession risk is disorderly rise in credit spreads and corporate deleveraging. From its side the IMF is warning that the world debt rises to 226% of GDP. Low rates fuel the risks. Expansive monetary policies have saved growth but push investors towards riskier and less liquid assets. Debt growth continues inexorably, especially in emerging countries. World debt reached 226.5% of GDP in 2018 and continues its inexorable growth, at a breath of 188 trillion dollars, according to preliminary estimates released on Wednesday 16 October by the IMF, during the press conference for the presentation of the Fiscal Monitor. The IMF then warns against the side effects of ultra-low rates: the difficult hunt for yields pushes investors, including insurance and pension funds, towards riskier and less liquid assets. Even for the non-financial sector, then, supervisory tools such as those introduced for banks are needed, the Fund warns in the Global Financial Stability Report, also released . Eight thousand billion dollars. Put like this they seem unreal numbers. From comics. But they are real numbers. According to the latest research by the Institute of International Finance (IIF), public and private debt globally in the first quarter of 2019 alone increased by this figure: by 8 thousand billion dollars. This is the largest quarterly increase since the first quarter of 2016, which brings global debt to the figure of 247 thousand billion dollars. A mountain equal to 318% of the GDP of the whole world. These numbers are the effect of a decade of ultra-expansionary monetary policies, which have increased global liquidity and brought interest rates to zero (or even below zero) in many parts of the world. This has favored everyone's use of debt: businesses, states and families.