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A New Interview On The Collapsing Global Economy

I recently spoke with Cris Sheridan, the Senior Editor of The Financial Sense Newshour. We discussed the reasons behind the global economy’s rapid slide back into severe recession, China’s economic breakdown and how we got into this mess in the first place. We also discussed what investors should anticipate next. I hope you’ll listen. Here’s the direct link to the interview:




Also, let me remind Macro Watch members to log in and watch the video I uploaded on Wednesday: Monetary & Fiscal Austerity Explain The New Global Recession.


In that video, we take stock of The State Of Stimulus. We begin by updating the Index of Global Liquidity first introduced last October. The index measures global liquidity by adding together the balance sheets of the world’s four largest central banks (the PBOC, the Fed, the ECB and the BOJ) along with the foreign exchange reserves of the rest of the world. What we find is that, after many years of rapid growth, the increase in global liquidity has come to a near standstill. This sharp monetary tightening is the main reason our global economic bubble is now deflating so rapidly.


Next we consider fiscal policy by looking at the budgets of a dozen or so of the world’s largest governments. Again, the general pattern we find is one of rapid fiscal tightening that is also acting as a heavy drag on global economic growth.


Like it or not, our global credit bubble cannot remain inflated without ongoing, large-scale government stimulus. Instead, we now have both monetary and fiscal austerity. That means the chances of a new worldwide economic breakdown are once again on the rise.


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One comment

  1. So do you like gold and other hard assets? Seems inevitable that we are moving towards a higher inflation world. Unless of course governments pull as oopsie and allow the system to slide into a depression. Your thoughts?

    Thanks Richard.

    Jack – CFP and worried.

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