Stock markets used to be a reliable indicator for the global economy, and for national economies. But that was before the central banks started targeting them as part of their stimulus programmes. They have increased debt levels by around $30tn since the start of the Crisis in 2008, and much of this money has gone […]
Chemicals and the Economy
Debt, demographics set to destroy Trump’s GDP growth dream
Unsurprisingly, Friday’s US GDP report showed Q1 growth was just 0.7%, as the New York Times reported: “The U.S. economy turned in the weakest performance in three years in the January-March quarter as consumers sharply slowed their spending. The result fell far short of President Donald Trump’s ambitious growth targets and underscores the challenges of […]
Ageing boomers are no longer spending
The Financial Times has kindly printed my letter below, suggesting that President Trump’s focus on tax cuts is misplaced, given the headwinds created for spending and economic growth by today’s ageing US BabyBoomers. Sir, Gillian Tett provides an excellent analysis of the wishful thinking that seems to dominate US economic policy today (“Trump tested as […]
US GDP growth stalls with participation rates near all-time low
US GDP growth is slowing, again, as the chart of the Atlanta Federal Reserve’s “GDP Now” forecast shows: Forecast Q1 growth has slipped to just 0.6% from an initial 3.4% at the end of January Consensus economic forecasts are still much higher, but even they have fallen to 1.7% from 2.2% […]
Recession the base case scenario for 2017
It is hard to be optimistic about the outlook for 2017. The good news is that policymakers are finally giving up on the idea that stimulus can somehow return us to the growth levels seen when the Baby Boomers were young. As the Bank of England note in a new Report: “Economic theory suggests that a […]
Interest rate and US$ surge mark start of the Great Reckoning
The bond market vigilantes are back. And they clearly don’t like what they are seeing. That is the clear message from the charts above, showing movements in 10 year government bond interest rates for the major economies, plus their exchange rate against the US$ and the value of the US$ Index: As I warned […]
Budgeting for the Great Reckoning
One thing is certain about the 2017 – 2019 Budget period. “Business as usual” is the least likely Scenario to occur. The IMF chart above highlights the key issue: for the past 5 years, all its forecasts of a return to “normal” levels of growth have proved over-optimistic: Back in 2011, the IMF was […]
1 in 5 of world population will be in New Old 55+ generation
An amazing development is taking place in the world today. For the first time in human history, more people are joining the 55+ age group than the 25 – 54 age group: 600m people will be joining the New Old 55+ cohort between now and 2030, taking their numbers to 1.8bn This is twice the […]
US interest rate dilemma highlights fragile global economy
Should it really matter that the US Federal Reserve might raise US interest rates by 0.25% tomorrow? Surely the IMF/World Bank should not need to argue that such a small increase could really be critical for the world economy? The fact that such a debate has been taking place at all, highlights the damage done by stimulus […]
Stock markets weaken as ‘Ring of Fire’ fault-lines open
“Central banks have created a debt-fuelled ‘Ring of Fire’, and we will no doubt have felt many tremors (large and small) as a result, by the time my next 6-monthly update appears in September“. That was my forecast for world stock markets back in March, and I imagine few would argue with it today, as we review developments […]
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