Tuesday, Jul 14, 2009
Original piece, objective and reflects a lot of my observations
Old Holborn: Manning the barricades
Collapsing credit has plunged the world economy into the deepest recession in
more than 70 years. What began as a property bubble in the US has spread
rapidly as troubled banks have stopped lending and consumers and businesses
have stopped spending. As demand in the US and Europe evaporates, oncethriving
emerging markets are losing their best customers and biggest investors.
An increasingly synchronised global economy will contract in 2009 for the first
time since World War II...............Well worth reading, I promise.
Posted by george monsoon @ 02:13 PM (1169 views) Add Comment
11 Comments
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1. george monsoon said...
I know it is bad form to post on your own blog entry,but come on guys.. have I scared you away with this one?
I have read the whole thing. (which took some time I can tell you, even when speed reading)
There are some interesting views in here that match mine, and although the views are very pessimistic, they are also realistic and well within the realms of possibility.
Give it a read guys. It is very rare that I get chance to post something of note on here and you are all deafening in your collective silence.
2. 51ck-6-51x said...
When is the next in the series due? This is pretty old.
3. george monsoon said...
Its not old, this is recent, and relevant, because we can measure the scenarios against what is happening now.
4. growler said...
GM: It's the first time I read it - and it is a mega article to read.
What would be interesting is the apportionment of probablilty the next time they review it. Will it be >30% or less than 30%.
I think the 10% scenario is not realistic, but the 30% one coudl well be. Even something in between says years of effective stagnation and implicit currency flight that only barriers and exchange controls will be able to stop.
5. george monsoon said...
Growler, I agree, A collapse in the Dollar is possible, but the rest of the 10% posibility is pretty dire to say the least. One very striking point made in the 30% probabiliy scenario is the likelyhood of civil unrest and more strikes. I just took a look at the front page on the BBC and the main article is all about the Postal Strike.
This article is an awful lot to take in during one sitting, but I believe it is well worth the effort, especially for those of us that are not as familiar with economics. I have bookmarked the site and will be watching out for further articles of this type.
6. paul said...
The article tends to paint a very black and white picture - deflation or inflation, inflation good, deflation bad.
But actually its more granular than that isn't it? House prices are deflating and that's basically good for the economy and reducing debt but factory gate prices deflating is bad. The economist didn't make too much of a distinction there.
7. george monsoon said...
Paul, now I have had to read the whole thing again just to find the bits about inflation.
I don't think they are making out that inflation is a good thing, just an option for the governents to try, to "inflate" themselves out of debt.
8. rumble said...
Had a super quick skim. Before I tuck in, published in March, does it avoid the green shoots nonsense?
Like the table - not the first time I've seen Mauritius hanging out with the Scandinavians - Matt the Hat, of interest?
9. george monsoon said...
Rumble, no it actually talks quite a bit about the normal cycle of a depression where there are signs of a recovery that lull people into thinking its all over, but these are often generated by government intervetion and are short lived, then revert to the downward trend again..
10. rumble said...
Jolly good. Tea, anyone?
11. drewster said...
george,
Thanks for the post. It's quite a long read (34 pages).
The risk of social unrest seems relatively low, at least for the UK. The report suggests we might see localised riots in areas which have suffered heavy job losses. This makes sense - the fragile peace in Northern Ireland over the last decade was mainly brought about by heavy government spending on local jobs. The devil makes work for idle hands.
The risk of protectionism is hard to quantify. Protectionism would hurt the UK economy quite badly.
War is unlikely to affect the UK (who would we fight, the French?); except for refugees from overseas wars seeking asylum here.