Elliott Eisenberg The World In Depression: Living With Crisis (Many articles concerning many countries have been placed below) The Ruling Elites Are Shaking In Their Boots: Perhaps Nothing Will Work In The Attempt To Exit The Crisis! “Today, no one talks anymore about the beneficial effects of unimpeded capital movement. Todays issue is secular stagnation... Capitalism in the 21st century is a capitalism of uncertainty... Politicians and business leaders everywhere are now calling for new growth initiatives, but the governments arsenals are empty. The billions spent on economic stimulus packages following the financial crisis have created mountains of debt in most industrialized countries and they now lack funds for new spending programs. Central banks are also running out of ammunition. They have pushed interest rates close to zero and have spent hundreds of billions to buy government bonds. Yet the vast amounts of money they are pumping into the financial sector isnt making its way into the economy. Be it in Japan, Europe or the United States, companies are hardly investing in new machinery or factories anymore. Instead, prices are exploding on the global stock, real estate and bond markets, a dangerous boom driven by cheap money, not by sustainable growth. Experts with the Bank for International Settlements have already identified worrisome signs of an impending crash in many areas. In addition to creating new risks, the Wests crisis policy is also exacerbating conflicts in the industrialized nations themselves. While workers wages are stagnating and traditional savings accounts are yielding almost nothing, the wealthier classes -- those that derive most of their income by allowing their money to work for them -- are profiting handsomely. ... the crisis of capitalism has turned into a crisis of democracy.” (1) “M&A (Mergers And Aquisitions) Deals Fail At Highest Rate Since 2008 The value of deals that fail to complete has reached its highest level since 2008... Three large deals collapsed last week, adding to the list of wrecked deals and coinciding with a sharp jump in equity market volatility that sapped confidence in stocks and put a chill on the market for initial public offerings. A total of $573bn worth of deals have been withdrawn, setting this year up to surpass the $640bn in deals that went uncompleted in 2008... “(2) “The collapse in iron ore prices may have further to run as global supply increases and steel-demand growth slows, according to Moody’s Investors Service, which said it may reduce ratings on producers. About 300 million metric tons of new and expanded supply will come on stream over the next few years, analysts including Carol Cowan said in an e-mailed report received today. Global steel-production growth in 2014 remains muted with China, the key driver of consumption, continuing to slow... Iron ore production in China has probably been contracting since April and further mine shutdowns in the largest importer are forecast as a global seaborne glut expands... Monthly output from mines in the country may have dropped about 20 percent from a year earlier... Iron ore tumbled 40 percent this year...” (3, 3a) “Copper prices have declined after the official data showed that China’s economy, during the Jul-Sep quarter, grew at a slowest pace since the first quarter of 2009... “The attention is going to shift to China,” Tim Evans, the chief market strategist at Long Leaf Trading Group Inc. in Chicago, said... “If we continue to see poor data there, where does the growth come from?... Trading was 35 percent below the average in the past 100 days... Zinc, lead and nickel declined in London...” (4, 4a) “Nickel is poised for the longest run of weekly losses since 2001 as stockpiles increase to a record amid concern that demand is slowing in China, the world’s biggest user of industrial metals... China’s September imports of nickel, including alloys, fell 28 percent from the same month last year... ‘Huge LME (The London Metal Exchange) inventories, especially in Asia, have worsened nickel’s fundamentals,” said Hwang Il Doo, a senior metals trader at Korea Exchange Bank Futures Co. in Seoul. “Without a recovery in China’s consumption, it won’t be easy to rebound to levels seen earlier this year.’... On the LME, aluminum, zinc and lead fell... “(5) “The worlds biggest fertilizer company by market capitalization... Potash Corp of Saskatchewan Incs... net income fell 11 percent, hurt by lower contributions from overseas investments... The company said its investments in potash companies in Jordan, Israel and Chile contributed $24 million to third-quarter earnings, compared with $85 million a year earlier.” (6) “High oil prices are terrible for economies of oil importing countries. How much lower do they really need to be to fix the problem? Past history suggests that prices may need to be below the $40 to $50 barrel range for a reasonable level of job growth to again occur in countries that use a lot of oil in their energy mix, such as the United States, Europe, and Japan... it appears that we can have oil prices that do a lot of damage to oil producers (say $80 to $85 per barrel), without really fixing the world’s low wage and low economic growth problem. This does not bode well for fixing our problem with prices that are too low for oil producers, but still too high for customers... The easiest way to reduce consumption of oil is by laying off workers, because making and transporting goods requires oil, and because commuting usually requires oil. As a result, the biggest effect of a cutback on oil production is likely to be huge job layoffs, far worse than in the Great Recession.” (7) “A significant decline in commodity prices in recent weeks–coupled with a worsening global economic outlook and major corrections in global equity markets–could result in a Great Deflation, namely a vicious circle of price/asset deflation around the world. The risk of such a scenario occurring is rising as crude oil prices tumbled last week and major equity markets witnessed a significant correction. If these trends continue and unless governments around the world stimulate domestic demand through additional government spending, a Great Deflation is likely to occur and significantly worsen the already weak outlook for the global economy... The deflation concern is particularly pronounced in Europe and Japan, two economies where policy makers are struggling to come up with solutions to counter especially slow economic growth... Overall, global commodity prices are down 8.3% in the first nine months of 2014 and have fallen further in early October...” (8,8a)
Posted on: Sun, 26 Oct 2014 19:16:56 +0000
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