He's sounding the alarm that now we're really in more of an economic depression, especially in comparison to the deviation and duration of economic trends that existed up to the financial crisis in 2008. It's gotten worse in the past 2 years. Economic growth across the world is in noticeably fading with no end in sight. US and EU growth is down to 1% or so and still decaying. Nearly all of the commodity producing countries are in recession as oil and commodity prices collapse. World trade is now declining. Chinese imports and exports are down double digits in the past two years and no end in sight. No one except Jeffrey Snider has a plausible explanation.
In a brief video below, he explains as concisely as possible what he means:
|Serious and Long-Lasting Deviation In GDP From Previous Trends. Even after $9T in New Debt Spending (With Nothing To Show For It.)|
Here's the 20 year history of the rise and fall of the REAL money supply to the world -- especially to China and the emerging markets. In recent years the world's real money supply is decaying rapidly and taking the world's economy with it.
Here's the effect of both the rise AND decline of the real global money supply:
|Shrinking "Eurodollar" Money Supply Causing Worldwide Economic Stagnation. No One Notices.|
|Labor Participation at 40 Year Lows As Job Gains Fails to Keep Up With Population Growth. Also, Do You See Any Recovery Of Industrial Production?|
According to Snider, there is a realistic chance that there is an intractable structural monetary problem that is leading to economic problems that central banks don’t seem to be able to solve or even recognize. When there are problems in liquidity, LIBOR rises. Looking behind the curtain, Snider finds monetary contraction, not monetary expansion.
There are other implications as well, perhaps more important than just investing. If this is indeed a depression, Snider says, “Historically periods of prolonged economic stagnation, lead to some of the worst types of historical events, usually social disorder, political upheaval, all those kinds of things.”
Most of the economic data after the 2008 data is poor, including Industrial Production. The US Federal Reserve's goals of stronger growth and higher inflation through repeated QEs has not worked. They don't know what they're doing!
|Two Years of Falling Industrial Production Begins to Resemble Recession or Depression|
|Bernanke and Yellen's Inflation Targeting A Total Failure Now|
US manufacturing's decline in the past two years will eventually be reflected in declines of the larger service sector. It's happening now. Retail sales, still positive, but still hovering near recessionary levels.
|US Services PMI is Trending Down and Now Following Industrial Production Declines. Soon Contracting?|