In recent months there has been an unrelenting wave of questions: Will there be another crisis? Will the Eurozone collapse? In the end - what are the objective criteria for the beginning of a problematic period in the economy of a country? Let's compare the criteria used to judge the onset of the crisis with the fundamental facts and social (based on news from the media).
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Crisis? That depends on how you look at it!
Awareness of the crisis phenomena in the world economy now recedes into the background after political eventsThe world economy, however, is going through a lot of really exciting things at this time. At the same time, there are a lot of really exciting things going on in the global economy itself at this time.
So, let's take apart and check some hypotheses:
- the world economy is in crisis;
- The European economy is also in recessionThis was officially announced;
- The U.S. economy is also in crisis, but through fabricated reporting and leading ratings agencies tells us otherwise.
If we talk about the indicators that really matter, we should note the following: GDP, inflation, unemployment, interest rates, and the level of government debt.
Reminder, The U.S. began recalculating GDP, attention, using a new methodology! And according to this data, the country's GDP has grown significantly, and the huge national debt has decreased decently.
Lies, blatant lies, and statistics
Why is this being done? Who needs it? Recall the words of Benjamin Disraeli: "There are three kinds of lies: lies, blatant lies, and statistics". So this statistic is the basis of public opinion, which directly and indirectly influences the stock markets, where we see a bubble in the form of rising indices of various indices. The figure below shows the volume of GDP by country, and the color indicates the situation with interest rates.
Now let's take a look at employment levels around the world and separately in the United States.
So, Unemployment in the world is high. This can even be seen in the creation of new nongovernmental organizations aimed at drawing attention to employment.
Separately from the civilized countries, we would like to highlight the Eurozone countries: Spain, Greece, whose unemployment rate is 26% and 27% respectively, to some extent France and Italy also show unfavorable rates of unemployment growth.
In the U.S., it is noted that positive dynamicAgain, judging by the official statistics. According to unofficial statistics, the figures are 2-3 times higher. They explain this by various factors: the government hides the real figures, the population applies for benefits less, and others.
Let's look at inflation rates (see Figure 6). The map is very simple - the darker it is, the higher the inflation rate. Russia looks like a prominent problem field on this map, with an indication of official inflation of 6.5%. But, people living in Russia know what the actual inflationThe inflation rate in Europe and the U.S. is higher than its own GDP growth rate. In addition, since the beginning of this year, both Europe and the U.S. are ahead of their own indicators of GDP growth in terms of inflation.
The Great Depression - reload
Many economists consider the Dow Jones Index at 16500-17000 units critical, the S&P500 at 1800 units. Only after these numbers are reached will begin to fallAnd it will not be smooth, but like in 2008.
What about oil? As long as the price is above 100$ all is well. But, what's really going on? Is oil getting more expensive or is the dollar getting cheaper? All methodologies point to the latter, and academic economists, not political economists, which is important, speak with one voice about the similarities of the current situation with the events of 2008 and 1929-33when there was the Great Depression in the United States.
How many factors are needed to make an objective forecast? There are wonderful scientists A. Akayev, V. Pantin, and A. Aivazov who have already calculated everything. Aivazov made the graph that alarmed the public back in 2010.
According to him, "the world economy is gradually sinking into a protracted and deep economic crisisIn 2013 the world will be hit by powerful financial and economic shocks, and the crisis will reach its peak in 2014. The Fed, the ECB, the Bank of Japan, the Bank of Great Britain and other financial institutions of developed countries are trying with primitive money printing and reduction of refinancing rates virtually to zero "flood" their economies with cheap liquidity". One of the conclusions, which should also be taken as a basis, is that the development of the economy is not linear, but discrete, i.e., discontinuous.
Now let's look at the Kondratieff cycles.
For your referencetheory was developed by the Soviet economist Nikolai Kondratiev (1892-1938). In the 1920s, he drew attention to the fact that there is a certain cyclical regularity in the long-term dynamics of some economic indicators.
Thus, looking at one example of spectral analysis (see Fig. 8), we can see where the world economy stands now and visually predict the near future in terms of GDP growth.
It is important that this theory has not yet received worldwide recognition, but is respected by many recognized economistsbecause it is very good at interpreting events in the world economy, especially recessions.
Let's look at the map through the eyes of one of the leading international rating agencies, Moody's (see Figure 9).
Moody's Analytics carefully tracks economic conditions in countries around the world and summarizes the results in this interactive map. Analysts examine broad range of indicatorsThe economic cycle is a key factor in determining a country's position in the economic cycle. In particular, they use indicators such as employment, industrial production and retail sales - high-frequency indicators that reflect the breadth of economic activity. Countries where indicators are falling are labeled as "in recession." Those where the decline has slowed are "stabilizing. Countries where indicators have begun to rise again are "recovering. Economies that have passed their previous growth peaks are labeled "expanding.
It is clear from these indicators that many processes are worsening. It remains to wait for the tipping pointwhen countries cannot be held accountable for their obligations. When the circle closes in which the Treasury issues treasuries (bonds), and the U.S. Fed buys them back with freshly printed money. And when the successful Eurozone countries will stop lending to their "dying" colleagues.
For us, official statistics are only the tip of the iceberg. It is important to consider other factors as well, making a complete, comprehensive analysis to draw conclusions. Good luck trading, everyone!