World is heading for 'Great Stagnation', says Goldman (new talking point)

Telegraph ^ | 09/30/11 | Angela Monaghan

[TigerLikesRooster]

World is heading for 'Great Stagnation', says Goldman

There is a growing risk that the global economy will move from the 'Great Recession' into the 'Great Stagnation', according to economists at Goldman Sachs.

By Angela Monaghan, Economics Correspondent

1:18PM BST 30 Sep 2011

Stagnations typically mean long periods of sluggish growth of about 0.5pc, low inflation, rising and sticky unemployment, stagnant house prices, and lower returns on shares, they said.

There is a 40pc chance of the current situation developing into a period of stagnation among developed economies, Goldman calculated.

"Trends in Europe and the US are so far still following growth paths that would be typical of stagnations," they said in a note.

"Given those risks, whether these countries manage to avoid a ‘Great Stagnation’ by a pick-up in the recovery is likely to depend on policy being able to restore confidence and putting in place reforms that can decisively jolt growth".

Looking at 150 years of macroeconomic history, they found that the probability of stagnation is much higher after financial crises.

[2ndDivisionVet]

Let me first: “Bush’s fault!”

[TigerLikesRooster]

Finally Vampire Squid gives in a bit to accept that we are in this for a long haul. The trouble is that it is not a mere stagnation we are facing.

[chris37]

Stupid Goldman.

It’s called “Hope and Change”.

[blam]

"The trouble is that it is not a mere stagnation we are facing. "

How about REVOLUTION?

Bernanke’s Plot To Overthrow The US Dollar (Revolution!)

[SkyPilot]

Stagnations typically mean long periods of sluggish growth of about 0.5pc, low inflation, rising and sticky unemployment, stagnant house prices, and lower returns on shares, they said.

In my opinion, we can survive stagflation as opposed to hyperinflation - although neither are desirable.

People will suffer during stagflation, but hyperinflation means that the nation will have only weeks left to live in its current economic situation.

[RoosterRedux]

Liberal policies and ideas are failing from Greece to the U.K. to Michigan and California...and will soon be replaced by common sense conservative ideas that work.

I think things look rather rosy!

[ronnie raygun]

All about removing the “HAVES” and replacing them with the “HAVE NOTS” Redistribution on the low end,(us) and regrouping on the upper end (CORPORATE WORLD)

[supremedoctrine]

The new Self-Fulfilling Prophets, Goldman Sachs.
Always nice to get guidance into the murky future
from the people most responsible for putting us there.

[spankalib]

“Liberal policies and ideas are failing...and will soon be replaced by common sense conservative ideas that work.”

From your lips to God’s ears!

[RayChuang88]

In fact, it has made the Tea Party movement even more powerful and influential, despite what the people in the MSM say. The Tea Party mantra of streamlined government and business-friendly taxation may spread around the world pretty quickly over the next few years, in my humble opinion!

[justa-hairyape]

Central Planners can never admit failure.

Therefore the odds favor World War.

The first egg will probably break in either the Med or South China Sea.

Sometime later we are supposed to end up with a big omelet.

[RoosterRedux]

Amen to that! Knowing that things don't change until bad ideas, regimes, systems, etc. absolutely collapse, I think we're on the cusp.

Reminds me of what Jimmy Carter wrought.;-)

It is amazing to me that Obama has attached himself to every one of the bad ideas of the past...from union corruption to Keynesian economics to Islam to Communism to heavy government regulation (and the list goes on and on). Even an idiot would know better.

[newzjunkey]

More good news!

[justa-hairyape]

Even an idiot would know better.

Once worked for a manager who had the same problem. Every decision he made, was the wrong one. Unfortunately for a person out in the field like myself, sometimes that manager had to make the call. Got to the point where I could predict his decisions with 100 % accuracy. The manager always picked the scenario that would most upset the customer/client. That appears to be what Obama is basing his decisions upon. Whatever gets the client the most upset. And unfortunately in this particular situation, we the people, are the clients.

[mo]

They better HOPE that’s what happens...the instability of a prolonged depression will render Goldman Sachs the same courtesy’s Louis XVI received.

[RoosterRedux]

Yup. That’s the Obama disease. That’s the reason I believe that if he takes the presidency in 2012, he’s going to have to steal it.

[trebb]

People will suffer during stagflation, but hyperinflation means that the nation will have only weeks left to live in its current economic situation.

Methinks you hit upon the Big Plan of the Usurper in Chief...

[rbg81]

Liberal policies and ideas are failing from Greece to the U.K. to Michigan and California...and will soon be replaced by common sense conservative ideas that work.

---

Really? I’m not that optimistic. The problem is that people can look at the same evidence and come to entirely different conclusions. You have plenty of people who, paradoxically, want Government to do MORE as its policies FAIL. To them, the failures are a result of Government not going far enough. These are typically the “clients” of Government and those Elites who draw their power from them.

[Tim n Texas]

People should take this report seriously.

Regardless of who enters the WH on Jan 2013, the global economy will be a mess. He/she can’t fix the US housing market, high-unemployment, and crippling debt (private and public) over night. The president can’t fix Europe, Japan, China.

This is not a ‘Jimmy Carter malaise’...it’s worse.