Skip to comments.Global liquidity peak spells trouble for late 2012
Posted on 03/11/2012 4:23:13 PM PDT by bruinbirdman
The global liquidity cycle has already rolled over. Assuming that no fresh action is taken, world economic growth will peak within a couple of months and then fade in the second half of the year - with grim implications for Europes Latin bloc.
Data collected by Simon Ward at Henderson Global Investors shows that M1 money supply growth in the big G7 economies and leading E7 emerging powers buckled over the winter.
The gauge - known as six-month real narrow money - peaked at 5.1pc in November. It dropped to 3.6pc in January, and to 2.1pc in February.
This is comparable to falls seen in mid-2008 in the months leading up to the Great Recession, and which caught central banks so badly off guard.
The speed of the drop-off is worrying. This acts with a six months lag time so we can expect global growth to peak in May. There may be a sharp slowdown in the second half, said Mr Ward.
If so, this may come as a nasty surprise to equity markets betting that America has reached escape velocity at long last, that Europe will scrape by with nothing worse than a light recession, and that China is safely rebounding after touching bottom over of the winter.
Stocks usually turn about two months before the real economy peaks, but not always.
Stephen Jen from SLJ Macro Partners said the world economy is weaker than it looks, with monetary stimulus losing traction in the West just as China, India, Brazil, etal, hit the buffers, constrained by inflation and their own credit woes.
The risk here is that the credit cycles in emerging markets mature and start to deflate just as developed markets struggle with their own deleveraging process. We think 2012 will be a tough
(Excerpt) Read more at telegraph.co.uk ...
The collapse is getting closer
Yes, it is.
Just in time for the US presidential election - what a coincidence!
M1 is contracting in much of the world and the Feds last burst is working out of the economy. Residential and Commercial Real Estate continue to decline. Widespread Municipal default lingers on the horizon, as does default in many states.
They are trying to time it to hit after the election.
"Stocks usually turn about two months before the real economy peaks, but not always. "
Hmmmm.(What's two months before May?)
Oh, I don’t know. My money is moving pretty fast... right out the door. Inflation is killing our family.
“with grim implications for Europes Latin bloc. “...of
Of NO economies. Lie “notes” once again, based on lie collateral. In reality there is NO economic PERFORMING collateral......LIE “COLLATERAL”.....
As in the MBS NON-PERFORMING scam.
As in the tech bubble NON-PERFORMING scam.
As in the “Savings and Loan” NON-PERFORMING scam.
Get ready for a Euro attempt at scheming the next forced work camp. Just like in the U.S., Forced Work Camp-Care: Arbeitsziehungslager.
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