For anybody who is historically literate about the events of the last century, more specifically what actually triggered the global Great Depression - a two-thirds collapse of world trade brought about by the imposition of the Smoot-Hawley tariff in 1930 that caused all U.S. trading partners to retaliate in kind, sending the planetary economy into a downward spiral that only the last pre-nuke world war (i.e. it was survivable) lifted us - not Europe or the Pacific Rim, which were in communist-menaced ruins - out of, the following story is terrifyingly ominous:
Global trade fell about 14% in 2015, making it the worst year since the financial crisis triggered the [the Second, and ongoing, Great Depression].
Weakness in emerging markets like [Red] China was the primary culprit for last year’s slump, which is casting a pall over the two-day meeting of G-20 central bank governors and finance ministers starting on Friday, according to a report in the Financial Times.
And, just as a reminder, Donald Trump vows to impose a 45% import tax on the ChiComms, triggering an all out trade (and most likely shooting) war. Just what an already downward-spiraling global economy needs.
Signs of lackluster commercial activity are showing up in current indicators like the Baltic Dry Index, a measure of global trade in bulk commodities, which is near historic lows. [Red] China said in January that imports and exports fell, which has contributed to Brazil’s worst recession in more than a hundred years, the newspaper reported.
U.S. exports fell 6.3% in 2015 as the dollar strengthened with the expectation that the Federal Reserve would raise interest rates for the first time in nine years. Higher interest rates boost demand for dollar-denominated investments and limit the supply of credit.
And they also boost the federal government's interest payments on the mammoth national debt, goosing it upwards even faster, crowding out even more of the federal budget, and accelerating the approach of the biggest national default in human history. It will also magnify the global economic shock when the dollar is removed as the global reserve currency in the aftermath.
“On a global level, most indicators suggest that trade growth will remain very weak,” Andrew Kenningham, senior global economist for Capital Economics, told the FT.
And if Trump gets his all-out trade war, "very weak" will look like the dreams of avarice a year or two from now.
I wonder if Trumplicans will still be "angry" then. I know I sure will be, if my starvation will allow me to muster the strength for it.