vlivk for ginormpous graphic

Source: NYT

 

 

Floyd Norris points out that “industrial production has been stagnating in many advanced economies around the world and is beginning to damage the German economy, which has been the strongest in the troubled euro zone.”

The US remains the healthiest of the bunch, but even Germany is tipping into contraction . . .

Category: Digital Media, Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

18 Responses to “World Production Stagnates”

  1. Iamthe50percent says:

    Notice the more the austerity, the worse the economy. Keynes was right and Hayek was wrong.

    The US is going to reduce the deficit either by the Fiscal Cliff or a Grand Bargain. Either puts us on Europe’s path. This country needs massive spending to return production jobs to the USA. The Buy American Act must be restored, even if it means direct Government investment in plants and software.

  2. Iamthe50percent says:

    Germany is trying to export into countries that German banks are squeezing the life out of.

    Every other systemic bank failure in US history was resolved by reforms. This meltdown did not generate reform but had bailout instead. Barry is totally correct in his book. Without the reforms we will go the way of Japan and Europe.

    End of rant

  3. ellsworth says:

    Iamthe50percent — …from where does all of the money come for the massive spending spree you recommend?

  4. mathman says:

    As far as i can see it’s down hill all the way til we’re done as a species, especially if global population keeps rising, resources continue to decline – including fish, potable water and fertile land – and climate change really gets going like the past two years have indicated. If the electrical grid goes, it’ll just be a more rapid descent into mayhem, chaos, violence and death.

    We blew it and should have stayed hunter-gatherers. Human civilization is an unsustainable myth on a finite planet, especially since we aren’t wise enough to keep our numbers down and are riddled with “design flaws” that prevent us from correcting our errant behavior, idiotic thinking and poor ability to avoid damaging ourselves in countless ways .

  5. Futuredome says:

    This would be all ended if insolvent banks were nationalized and orderly resolved with money pumping into main street.

    Deficits would fall, interest rates would surge as portfolio’s would be rebalanced.

    Instead the elites that pump up think tanks like the Trilateral Commission(the godfathers of deregulation and Jimmy Carter) want weak growth and rates to stay low so they can destroy pensions and such.

    There is no accident. Everything happens for a reason.

  6. Iamthe50percent says:

    Ellsworth, from the Fed of course. They are the lender of last resort and will buy trillions in low interest bonds. Yes, I am aware that this is tantamount to printing press money. What do you think Civil war greenbacks were?

    This was done once before in 1941-1945 wherein the Aerospace and Electronics Industries were created with federal dollars and ran 24/7 three shifts.

    It’s a whole lot better than printing trillions in an attempt to buy every bad derivative to keep billionaire banksters out of poverty.

  7. Fortunately, when one adds in the service sector, global GDP is on a 3.3% pace and Italy is the sole G-20 nation in Recession.

    G-20 Recessions Monitor: http://trendlines.ca/free/economics/G20RecessionMonitor/G-20RecessionMonitor.htm

  8. malinvestment says:

    Time to change the measurement stick. GDP is a dead end street for humanity. Wouldn’t Gross Sustainable Product make more sense? Is this really debatable???

  9. danm says:

    Without the reforms we will go the way of Japan and Europe
    ————
    You can’t just load up your wagon, head west and plant a stake where your please. You HAVE become the Europe many left a hundred years ago to make a new life in America.

    Today, there is no new continent t to raid. All land belongs to someone and hard assets is all that counts.

  10. danm says:

    It’s a whole lot better than printing trillions in an attempt to buy every bad derivative to keep billionaire banksters out of poverty.
    ———–
    It’s not just the 1%…. these bailouts were about keeping those pension plans going…. you know the ones serving the top 15-20%. Only when the top 15-20% start feeling the real crunch will they start getting off their sofas and doing something.

  11. crutcher says:

    On seeing the title I wondered if this post were about oil production – curious, BR, if you have formed a view on the concept of “peak oil.”

    @mathman Once you get over the initial shock of reading Hardin or Diamond, you may find a world of opportunity in solving problems our ancestors couldn’t.

  12. DeDude says:

    With reduced demand production go down. Nothing new or surprising – unless you believe in trickle down. US did not go all out on killing demand with austerity so it is in better shape than the fools in europe.

  13. debrabradley says:

    We have enough liquidity – we need a culture and leadership that encourages growth, productivity and a positive attitude toward business. It is pyschological. Look at yourself not Washington ( either side) to.provide the answer.

  14. ellsworth says:

    debrabradley – I agree. it is pathetic that people think that the answer is to either print more money or tax the wealthy. that’s almost like saying the answer to a hangover is to drink more.

    for arguments sake, let’s say we print a bunch of money and take money away from the rich to pay off our national debt immediately. then what?

  15. Jim67545 says:

    I think mathman is correct. It’s probably impossible to dramatically reverse a couple million years of imprinting in a couple generations. The monkeys have soiled their cage and there is nowhere else for them to go.

    Nowhere do I see POTUS (or anyone else) saying, “Look folks here are the hard and unpleasant facts. Like it or not we have overspent on wars, drug benefits and other things we cannot afford now. Now is the time when we ALL have to reach into our pockets and pay this off. AND we need to give some things up and change what we are doing, even though it is going to be painful for us all, to prevent our country from sliding into this situation again. So here is the plan. First we are going to do this, then phase into that….”

    Nobody wants to pay more taxes or receive less benefits of some sort. But let’s ALL get on with it. We know we will have to eventually. Looking around for the weakest ox to gore (someone else’s ox of course) will have us chasing in circles indefinitely.

  16. Jack Damn says:

    It’s just a cycle. It’ll pass. A new crop of consumers will sprout and the cycle will begin anew. Credit is tight, atm, but it will loosen and we’ll begin the bubble again. This always happens after a financial meltdown.

    Normal – Bubble – Meltdown – Normal – Bubble – Meltdown…wash, rinse, repeat.

    Credit/production follows the same general cycles of the stock market. Like so:

    - http://i.imgur.com/pXBu0.jpg (chart)

    We’ll stagnate for awhile, years maybe, and then it’ll all begin again.

  17. constantnormal says:

    http://www.businessweek.com/news/2011-11-10/imf-s-lagarde-warns-of-risk-of-lost-decade-for-global-economy.html

    A rough cut at understanding this would be to examine the size of the initial impact to the national economy — the hit taken by real estate markets from the mortgage mess — and compare that to the hit to the national economy delivered by the stock market crash in 1929. A simple estimate of the size of the resultant toxic debts in each case, relative to the GDP, would provide a clue, I think.

    The toxic debt from the ’29 Crash washed through the economy pretty quickly, via a cascade of bankruptcies that progressed with no safety nets to slow the wake of defaults.

    We have opted to place our toxic debts in stasis via FASB 157, papering over them cosmetically with ZIRP, and metering out the foreclosures (while hiding the banking failures) over time. We can see that the foreclosures will be largely processed by sometime in the 2016-2018 time frame, but the downstream damage to the banksters remains hidden and unknown.

    That particular benchmark of the Crash of ’29 (the most recent one that bears any similarity to the current depression) is muddied by the onset of WWII, which may or may not have played a part in the eventual economic recovery (a prodigious amount of government war spending, coupled with a million-man reduction in the labor force and a strong global demand for goods — courtesy the War, likely had some influence on the timing/pace of the recovery) … but if there was an alteration in the progress of the economic recovery from WWII, it almost certainly shortened and steepened the recovery. Without the multi-pronged stimulus of WWII, the Great Depression may have hung around for a decade or two longer.

    Regardless of whether anyone is nuts enough to think that a global war would be a helpful thing in getting out of our current depression, it is an impractical scheme, as global wars nowadays (and I’m not referring to our policy of wars against small, primitive nations that pose no significant threat to us) would be fought with weapons that would make those of WWII look like paint-ball warfare. Nobody wins if everyone winds up dead.

    And aside from the impact of the deflation of the fraudulently-inflated housing bubble, there are three more factors that have a real impact on any economic recovery here … the retirement of the baby boomers, who are woefully prepared for retirement; the long-term decline in the fraction of the labor force that have jobs; and the impact of economic inequality resulting in less money in the hands of the middle class. We cannot look to the bulk of the people/serfs to provide any significant help in providing demand for the products of the Corporatocracy.

    This IS a Perfect Economic Storm.