Monday, December 10, 2012
World Economies Of the Living Dead
First, I'm sort of back. The first week after major surgery is always difficult; if you can stay conscious past noon and still accomplish something positive in the afternoon, you're far ahead of the pack. It's been about a week and a half, and I'm OK. I still get tired in the afternoon, but less and less so. The hip is healing nicely. It's still very stiff and difficult to move, but it's more like having a giant charlie horse that's about the size of two fists than a source of extreme pain. And the right hip -- which was done about 8 weeks ago -- feels like a normal hip again. Also -- thanks for the many well-wishing communications. They were all greatly appreciated.
Last week, NDD noted that the US economy was "shambling along" (see here, here, here, here and here). Unfortunately, this characterization also applies to most world economies -- most of which can be correctly characterized as economies of the living dead -- hence this week's zombie theme. Japan printed negative GDP growth for the last two quarters; the EU is in a recession, the UK has had nearly two years of shambling (despite the obviously beneficial aspects of their continued austerity program). Brazil has printed continued slowing growth with high inflation, greatly limiting their central bank's ability to effect the economy; China is in the middle of a political power change which has hampered their ability act. Australia is greatly dependent on their export relationship with China for growth, meaning that as China moves to a consumption based model, Australian growth with slow. India is mired in negative loop created by the bureaucracy from hell. The only bright spot is Latin America from Mexico to Peru, Columbia and Chile. And these economies are just not big enough to pull world growth along. (I've already provided some overarching detail in this area; see this link).
The point to all the above is that as we approach the end of the year, there is no bright spot to point to, signaling that the world enters 2013 with great prospects. Instead, we'll be entering the new year on the knife's edge, where any little shock could greatly increase the ongoing EU recession or broaden the number of countries in a recession.
This week, I'll be touching on Japan, the EU, and the UK's economy to show that all is not well the world over. In fact, all is actually pretty scary the world over.
I'll start running these posts on Tuesday.