Yesterday, we spotlighted Brazil’s economy as perhaps a leading indicator for where things stand. Today, it’s China’s turn. Neither are very encouraging. Both offer instead only growing concern. The reason isn’t just the possibility of the world economy rolling over in 2018, rather it’s from what level any deceleration might have begun.
Despite the characterization of especially the US economy as some powerhouse reborn from supply side do-gooders, Reflation #3 never really got going. Markets were up but none outside of stocks actually did all that much, most only having retraced a small part of the “rising dollar” collapse.
Many of the world’s national economies performed in exactly the same way, not that that has been surprising. One follows the other. Brazil has behaved like that, being utterly devastated by the global downturn in 2015 and 2016. They have proved the “L”, an exclamation point further provided if their economy is indeed on its way down again already.
The same for China. Globally synchronized growth was supposed to speak Chinese more than any other language. And yet, there wasn’t near enough momentum at any point along the way. Now, like Brazil, the downside re-emerges from a far shorter peak than anyone has been able to imagine.
That’s really the corruption here. Economics as a discipline is thoroughly, irredeemably corrupt. They’ve learned absolutely nothing, as I wrote here:
There is still no evidence that the US economy is doing anything but continued sputtering. This is not news to the rest of the world, however, as the persistent lack of actual American “demand” has been felt nearly everywhere. Domestic economists, and a great many foreign counterparts, continue to see the US as the sole engine of economic hope. But even just writing that doesn’t make sense, as how can every other place in the world be in economic trouble when the one place that drives economic activity in the rest of the world is “booming?”
No Comments