It seems that the world economy is about to enter a second recession, just 5 years after the 2009 crash.
What is happening?
- China is overheating as a natural part of its massive 7.5% growth rate boom. It has weakening electricity supply, coal mines going bankrupt, and falling house prices.
- Russia's economy is suffering from sanctions, falling oil prices and the rouble is losing value.
- The Eurozone is teetering on the edge of a second recession, high unemployment, worries about the Ukraine, and falling prices - the dreaded deflation.
- Japan's economy is shrinking again
- Emerging markets such as Brazil and India are slowing
- Still too much debt in the economy, because money is made out of debt
- Other stuff which knowledgeable people may enter in the comments below
Only the USA is showing any resilience. Part of the credit should be given to Obama who stimulated the economy with QE and green investment. Which must make Republicans and good ol' all-Americans hate him even more, if that were possible.
The banks and the derivatives markets are of course still there, still unstable, still too big to fail.
In the end, indefinite growth into a finite space is an impossibility. The economy as viewed by politicians is not tied to any reality, and as such it is subject to boom and bust. The next recession (which may or may not take place in 2015) is a result of the belief that "the economy" a thing-in-itself, not a way of enabling a stable human population to provide for their needs in a sustainable way.
So what will the Chancellor of the Exchequer have to say about all this complex economic stuff?
Yes, you guessed it:
"It's all Labour's fault".