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Economic Outlook

Special Report: Chinese Sunset

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Posted by A. Gary Shilling via John Mauldin's Outside The Box

on Thursday, 14 January 2016 10:22

Earlier in the week I asked my friend Gary Shilling if he could give me a summary of his 2016 forecast. He agreed to do so and sent it on. Then this morning he sent out a special short report on China that offers what I think is a valuable perspective that differs from what we’re seeing in the headlines - John Mauldin

The current turmoil in the Chinese economy and financial markets is shaking security markets globally as the yuan nosedived in the first week of this year and Chinese equities lost $1.1 trillion. What a contrast to the 13.3% compound annual growth from 1992 through 2007 (Chart 1) that propelled China’s GDP from 9% of America’s total to 59% last year (Chart 2)! So China moved ahead of Japan in 2009 to become the world’s second-largest economy as hundreds of millions of Chinese rose from poverty.

Image 1 201601 OTB

Image 2 201601 OTB

Reveling in Success

The Chinese revel in that success. They view themselves as the world’s superior society, and have chafed at being under



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Economic Outlook

The Coming European Revolution

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Posted by Martin Armstrong - Armstrong Economics

on Wednesday, 13 January 2016 07:18

I have warned that 2017 will be the political year from hell. What I am illustrating here is the link between a sovereign debt crisis and the Revolutionary Cycle. In 1933, Roosevelt came to power in the USA and turned the country toward socialism. That same year, 1933, brought Hitler and Mao to power. So 1934 was the revolutionary year. Such revolutions do not always bring blood in the streets. The next one is due in 2020 and we should see the system we currently live under go completely upside-down.

European-Revolutionary-Cycle

 

....continue reading HERE



Economic Outlook

Is the Recession Starting?

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Posted by Martin Armstrong - Armstrong Economics

on Wednesday, 06 January 2016 10:41

380x368xECM2015-2020.jpg.pagespeed.ic.3v1xGN0sUBThe ISM purchasing managers’ index for the manufacturing sector in December 2015 in the USA has plummeted to its lowest level since June of 2009. This warns that the U.S. economy is entering a recession that is in line with the forecast of the ECM and the rise in the dollar.

However, keep in mind that this is simultaneously coming with the changing technology trend. By that, we mean that low-level jobs are being replaced rapidly by automated computers, in part, because of Obamacare and its Draconian tax burden upon business exceeding 25 employees. Therefore, unemployment will rise due to this expansion in technology and raising the minimum wage will accelerate that trend further.

In business, inventories are also shrinking as companies move to “just in time” methods by using technological advancements to minimize carried inventory. This trend is only further accelerated by the banks moving toward transactional banking where they are no longer interested in relationship banking. This also reduces the availability of loans for small business as banks do not want the risk.

The convergence of these trends will feel the recession ahead. Eventually, this will materialize in rising unemployment, a deepening crisis in student loans, and the fiscal mismanagement of governments demanding more and more taxes which will become a toxic cocktail of doom.

The ultimate rise in stocks in the years ahead (after a correction sling-shot move) will unfold simply as capital tries to secure its future by getting out of government bonds and banks.

 



Economic Outlook

Cubicle Hell Warning Signs Scream “Recession”

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Posted by Connecting the Dots - Mauldin Economics

on Tuesday, 05 January 2016 08:22

Have you ever worked in a mind-numbing cubicle? I did when I was younger, and I hated it.

Being stuck in a cramped cubicle lit by overhead fluorescent lights, wedged between dozens of coworkers whose phone conversations and keyboard strokes—as well as bodily odors and noises—sucked a little bit of life out of me every single day.

My cubicle experience made me feel like a white-collar prisoner, and I knew this was not how I wanted to spend my professional life. I needed to either move up the company ladder or start my own business.

Maybe I’m just a crybaby, because tens of millions of people toil in cubicles every day.

The cubicle, created by office furniture maker Herman Miller, has been around since 1968 and must have contributed to thousands of white-collar suicides, but it is solidly entrenched in American business life today and generates more than $3 billion in annual sales.

Image 1 20160105 CTD

More importantly, I consider the office furniture business to be an extremely useful economic indicator. After all,



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Economic Outlook

Outrageous Predictions for 2106

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Posted by Saxo Bank

on Tuesday, 29 December 2015 07:02

Screen Shot 2015-12-29 at 5.35.43 AM

‘The close of the paradigm’ 

The irony in this year’s batch of outrageous predictions is that some of them are “outrageous” merely because they run counter to overwhelming market consensus. In fact, many would not look particularly outrageous at all in more “normal” times – if there even is such a thing!

In other words, it has become outrageous to suggest that emerging markets will outperform, that the Russian rouble will be the best-performing currency of 2016, and that the credit market will collapse under the weight of yet more issuance. We have been stuck in a zero-bound, forward-guidance lowering state for so long that there exists a whole generation of traders who have never seen a rate hike from the Federal Reserve. As we close out 2015, it has been nearly 12 years (early 2004) since the US economy was seen as recovering strongly enough to warrant starting a series of hikes - and that series ended in early 2006, nearly ten years ago.....continue reading HERE



Economic Outlook

Marc Faber The Global Economy Is Entering An Epic Slump

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Posted by Marc Faber

on Monday, 21 December 2015 08:07

The economy, energy, China, Stock Markets, Gold and Silver and more are all covered in this interview with Marc Faber:

 

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.

Screen Shot 2015-12-21 at 7.07.28 AM

 



Economic Outlook

George Friedman's World of Geopolitics

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Posted by George Friedman - Thought From The Frontline

on Friday, 11 December 2015 15:47

imagesYou said the number one problem Europe faced – and the one that would crack Europe open – was immigration. Nationalism was rising, and you said immigration would be the final straw. That was at least five years ago, so it was a remarkably prescient thought. What led you to that insight?

GEORGE: Well, Europe is the second smallest continent in the world, second only to Australia, if you want to call the latter a continent. (My wife will kill me for that, since she’s Australian.) Europe has 51 separate nation states. The European Union’s purpose was to end conflict among these states by binding them together in peace and prosperity.



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