Global chaos returns – why?
Posted by John, August 24th, 2015 - under Market, Recession.
Tags: Crisis, Global economy, Great Recession
Investors look at computer screens showing stock information at a brokerage house in Shanghai, China, July 8, 2015. Aly Song / Reuters – From the Atlantic
Michael Roberts explains the reasons for the market chaos going on across the globe on his excellent blog site the Next Recession. He says among other things:
‘The reasons are clear. The Chinese economy, now officially the largest in the world (at least as measured by the IMF’s rather weird purchasing power parity method), is slowing fast. Every bit of data coming out of China shows a worsening situation for manufacturing output, investment, exports and, above all, the purchase of raw materials from other countries. The drop in demand from China for basic commodities has caused a huge drop in commodity prices (the prices for oil, food, iron, coal, industrial metals etc). This drop in prices means less export sales for the likes of Brazil, Australia, Indonesia, Argentina etc. Also the Chinese are not buying so many BMWs, luxury handbags, machine tools, cars etc at home and abroad. That’s bad news for Europe and Japan, as well as the US.’
To read the whole excellent article click Market turmoil.