[Puffer Fish]

The International Monetary Fund has warned of a high risk of a global Recession within the next 12 months.

The article is from The Guardian.

Global recession risk rising as economic outlook ‘darkens significantly’, IMF says | Global economy | The Guardian
https://www.theguardian.com/business/20 ... y-imf-says

Both the IMF and The Guardian are pretty moderately Progressive Left-leaning, so this isn't just Conservative Right scare tactics.

I wonder if it has some connection to the high amount of inflation, or even whether it could have something to do with the recent huge budget deficits across the "Western World" (UK, EU, US, Canada, and Australia), running up government debts even higher than usual. (You can't stimulate the economy to get an "up" without paying the price in the form of a "down" later)

Russia and the Ukraine are one part of this, but I believe it is probably not too big of a part if they are talking about a global recession, since those two countries don't have a huge amount of economic entanglement with the rest of the world. Sanctions against Russia initially raised the price of oil on the world market, but now the supply chains have reconnected and China and India sourcing much of their oil from Russia now. The country of Turkey is in a difficult situation with that though. And Europe is going to have a tougher time getting gas this winter to heat buildings. Increased energy costs can often be the driver of a recession.

The Guardian also has another article:
Missed meals and constant stress: New Zealand’s cost-of-living crisis hits home, July 3, 2022
https://www.theguardian.com/world/2022/ ... -hits-home
Discussing inflation in New Zealand and how incomes are not keeping up with the price increases.

Will this really be a "Global" recession, or just hit all the "Western countries"?

Because we're not seeing inflation now in places like Japan and Thailand, and even in China the inflation rate is very low.

[Steve_American]

@Puffer Fish,
Why is it that Japan, China, and Thailand are not seeing inflation? I know that Japan and Thailand spent a lot extra during the pandemic.

Is it possible that the "quantity theory of money and inflation" is wrong? I have asserted that money saved is not contributing to inflation because it can't be spent. And that, when the Gov. sells bonds it is forcing the buyers to save that much money. So, in Japan there is little inflation. In Thailand it is mostly just in oil prices, and I live here.

If you can't explain Japan, China, and Thailand, then your assertion is incomplete and likely wrong (that the inflation in the west is a result of Gov. deficit spending).

Do you realize that there is another explanation for the inflation? It is shortages of supplies, and price gouging by OPEC and western monopolies.

IMO, any recession will have been caused by the Fed. ECB & other CB raising interest rates in a wrong headed attempt o reduce inflation.
.

[Puffer Fish]

@Puffer Fish,
Why is it that Japan, China, and Thailand are not seeing inflation? I know that Japan and Thailand spent a lot extra during the pandemic.

If you look on a graph, Japan's spending spike was narrower than the U.S. Japan suddenly increased spending for about 10 months. The U.S., on the other hand, greatly increased spending levels even a year before the pandemic, and then lasted a year longer than Japan.

A much smaller part of this, the Japanese government used Covid as an excuse to put up some trade protections against China. If you look on a graph, you can see Japan's overall trade balance turned slightly positive into the start of the shutdown. Not sending yen overseas helped exchange rates and helped resist inflationary pressures. (If you have a positive trade balance, then other countries want your money so they can buy your products, so the money becomes more valuable)

[Steve_American]

If you look on a graph, Japan's spending spike was narrower than the U.S. Japan suddenly increased spending for about 10 months. The U.S., on the other hand, greatly increased spending levels even a year before the pandemic, and then lasted a year longer than Japan.

A much smaller part of this, the Japanese government used Covid as an excuse to put up some trade protections against China. If you look on a graph, you can see Japan's overall trade balance turned slightly positive into the start of the shutdown. Not sending yen overseas helped exchange rates and helped resist inflationary pressures. (If you have a positive trade balance, then other countries want your money so they can buy your products, so the money becomes more valuable)

OK, I'm not sure that these changes were enough to explain the case of Japan, but you tried.
However, if Japan already had a very large deficit (like I think it did) then it needs less of an increase to cause inflation, if your basic theory for inflation is correct.

Now what about China and Thailand?

.

[Puffer Fish]

Staggering £25bn down the drain as 9 in 10 Brits plan to cut back with third of all UK households now in 'financial distress'
July 19, 2022

More than a third (36 per cent) of UK households are "financially distressed" and plan to cut back across most, if not all, of their non-essential spending, as low incomes and high debt levels leave little room for manoeuvre, according to a new report.​

https://www.cityam.com/staggering-25bn- ... l-distress

Well, it looks like the UK might be entering a recession.

Personally I suspect this may have more to do from the massive levels of immigration into the UK, but it could be more than that.

[ckaihatsu]

Impact of the 2022 Russian invasion of Ukraine

Main article: Economic impact of the 2022 Russian invasion of Ukraine

On 22 February 2022, before the Russian invasion, the German Government froze the Nord Stream 2 pipeline between Russia and Germany,[20] causing natural gas prices to rise significantly.[21] Its impact on energy supply extend globaly. Especially in Europe, this translated to much higher electricity bills.[22]

On 24 February, Russian military forces invaded Ukraine[23] in order to overthrow the democratically elected government, and replace it with a Russian puppet government.[24] Before the invasion, Ukraine accounted for 11.5% of the world's wheat crop market, and contributed 17% of the world's corn crop export market, and the invasion caused wheat and corn from Ukraine unable to reach international market, causing shortage, and result in dramatic rise in prices,[25] that exacerbated to foodstuffs and biodiesel prices.[26][27] Additionally, the price of Brent Crude Oil per barrel rose from $97.93 on 25 February to a high of $127.98 on 8 March,[28] this caused petrochemicals and other goods reliant on crude oil to rise in price as well.[29][30]

The effect of sanctions on the Russian economy caused annual inflation in Russia to rise to 17.89%, its highest since 2002.[31] Weekly inflation hit a high of 0.99% in the week of 8 April, bringing YTD inflation in Russia to 10.83%, compared to 2.72% in the same period of 2021.[31]

Impact on countries

This section needs expansion. You can help by adding to it. (December 2021)

While most countries saw a rise in their annual inflation rate during 2021 and 2022, some of the highest rates of increase have been in Europe, Brazil, Turkey, the United States, and Israel.[9][32][33] By June 2022, nearly half of Eurozone countries had double-digit inflation, and the region reached an average inflation rate of 8.6%, the highest since its formation in 1999.[34] In response, at least 75 central banks around the world have aggressively increased interest rates.[35]

https://en.wikipedia.org/wiki/2021%E2%8 ... of_Ukraine

[Puffer Fish]

By June 2022, nearly half of Eurozone countries had double-digit inflation, and the region reached an average inflation rate of 8.6%, the highest since its formation in 1999.[34] In response, at least 75 central banks around the world have aggressively increased interest rates.[35]

I think this statement may be a little misleading and dishonest. 75 countries around the world increasing interest rates and suffering from inflation does not mean that the inflation in all 75 of these countries were caused by the Russia conflict.
In many of these Third World countries, inflation was already a normal thing.

[Rancid]

If you do not get laid off, time to make moves.

[BlutoSays]

Yellow highlighting denotes heavily subsidized by gubMINT.

[ckaihatsu]

I think this statement may be a little misleading and dishonest. 75 countries around the world increasing interest rates and suffering from inflation does not mean that the inflation in all 75 of these countries were caused by the Russia conflict.
In many of these Third World countries, inflation was already a normal thing.

It's an *across-the-board* phenomenon, and the timing of it matches the beginning of 2022 -- also look at the hit that the stock markets took.

What are you in denial about -- that *Germany* fucked up its energy policy and got NATO to hassle Russia as a diversion? Sanctions on half the world isn't destructive enough, so now we have *this* shit as well?

In the *'70s* it was all about U.S. spending on the war in Vietnam -- *that's* what did Nixon in.

[ckaihatsu]

Yellow highlighting denotes heavily subsidized by gubMINT.

This is your vague, knee-jerk take?

Don't you think the higher-priced industries / services *can't* be readily handled by the private sector, because of the cost of providing *profits* -- ?

It's not as easy to provide to those areas, as for easily mass-produced *electronics* -- and so those are the 'human service' areas that are more complicated, with a far higher organic composition of labor for those highly-skilled, social-type services. If it wasn't for your demonized *big government*, those areas of widely needed social services wouldn't even be available *at all*. *That's* the problem with your sheerly market-pricing perspective on it all.

[BlutoSays]

This is your vague, knee-jerk take?

Don't you think the higher-priced industries / services *can't* be readily handled by the private sector, because of the cost of providing *profits* -- ?

It's not as easy to provide to those areas, as for easily mass-produced *electronics* -- and so those are the 'human service' areas that are more complicated, with a far higher organic composition of labor for those highly-skilled, social-type services. If it wasn't for your demonized *big government*, those areas of widely needed social services wouldn't even be available *at all*. *That's* the problem with your sheerly market-pricing perspective on it all.

It's not complicated at all. Politicians make a bunch of promises for free shit to get re-elected. They write bills so Uncle Sham will provide the sugar. Piles of it.

Fed.gov then drops helicopter money onto certain industries and those industry players, both public and private work overtime to soak up all that free money. They raise prices...because they can. It's there for the taking. They get no kickback from the government, unlike a consumer who earns the money and "feels" the cost. It just promises more. A consumer would say "WTF, I'm not paying that" and the signal would get back to the industry that they're charging too much, but that doesn't happen when subsidies run hot, really hot. That's not "market-pricing". The feedback mechanism from consumer to provider is broken.

LEARN ECONOMICS.

[ckaihatsu]

It's not complicated at all. Politicians make a bunch of promises for free shit to get re-elected. They write bills so Uncle Sham will provide the sugar. Piles of it.

Fed.gov then drops helicopter money onto certain industries and those industry players, both public and private work overtime to soak up all that free money. They raise prices...because they can. It's there for the taking. They get no kickback from the government, unlike a consumer who earns the money and "feels" the cost. It just promises more. A consumer would say "WTF, I'm not paying that" and the signal would get back to the industry that they're charging too much, but that doesn't happen when subsidies run hot, really hot. That's not "market-pricing". The feedback mechanism from consumer to provider is broken.

LEARN ECONOMICS.

You're *far* too content to look to the market as a 'fair' 'final arbiter' for what society does, and, as I noted, this *attitude* / mindset of yours is profoundly *problematic*.

Sure, I know what pork-barrel politics, or patronage, is -- and, sure, that's 'politicking', or 'turf', as you're pointing out.

But you keep returning to the capitalist *pricing regime* as somehow being the system that people should *look* to, and there's definitely something wrong with *that*, especially considering the trillions of dollars that had to be devoted / diverted to the stock market in March of 2020.

'Consumer feedback' in the *public* / government sector, if you haven't heard already, is called 'ratings', and 'complaints', or, more broadly, *politics itself*.

Are you really taking a stand here against *government subsidies*, or is it actually *politicized* (left-right), which your rhetoric simply *ignores*, even though your political bias is blatantly on display.

You haven't raised a peep, for example, about the *military-industrial complex*. You could start *there*.


[2] G.U.T.S.U.C., Simplified

Spoiler: show

[BlutoSays]

Military spending is close to what it was for the last 30 years by percent of GDP. There's your military spending as a percentage of GDP year by year (around 3.5%).

https://www.macrotrends.net/countries/U ... nse-budget

Defense spending is not scrutinized and audited for fraud, waste, and abuse nearly enough, but compared to all the other social spending programs, it's more tightly controlled.

Can't help you with your endless spending on gender equity recreational degrees and other social spending which gets us nothing but mouth breathing idiots to vote for more sugar.

However, if someone flies an airplane into us, I'm ecstatic we can respond.

The graph I posted above on skyrocketing inflation for certain industries stands. Don't like it, too bad.

[ckaihatsu]

Military spending is close to what it was for the last 30 years by percent of GDP. There's your military spending as a percentage of GDP year by year (around 3.5%).

https://www.macrotrends.net/countries/U ... nse-budget

Defense spending is not scrutinized and audited for fraud, waste, and abuse nearly enough, but compared to all the other social spending programs, it's more tightly controlled.

Can't help you with your endless spending on gender equity recreational degrees and other social spending which gets us nothing but mouth breathing idiots to vote for more sugar.

However, if someone flies an airplane into us, I'm ecstatic we can respond.

The graph I posted above on skyrocketing inflation for certain industries stands. Don't like it, too bad.

You really *are* a 'numbers guy', aren't you -- ?

If all of that spending on the military is for 'defense', as claimed, then why does the U.S. have *hundreds* of bases all over the world -- ?


The US Military is EVERYWHERE

Why does the US have 800 military bases around the world?

What's wrong with education on *gender equity* / sex-education -- ?

You're critical of government *patronage networks* -- and, sure, I can see why, but there's no *alternative* under capitalism. Either it's profit-making or its patronage. Not much *choice* there.

Elaborate on Saudi Arabia and 9-11, if you like.

It's not 'inflation' when it's *internal* -- what's government *for*, if not to provide social services, and they could use *Monopoly money* for that, for all it matters.

[ckaihatsu]

I think Kuwait has the White House on speed-dial....

1982–1990: Gulf War

Main articles: Terrorism in Kuwait, Gulf War, and Kuwait and state-sponsored terrorism

In the early 1980s, Kuwait experienced a major economic crisis after the Souk Al-Manakh stock market crash and decrease in oil price.[167][168][169][170]

During the Iran–Iraq War, Kuwait supported Iraq. Throughout the 1980s, there were several terror attacks in Kuwait, including the 1983 Kuwait bombings, hijacking of several Kuwait Airways planes and the attempted assassination of Emir Jaber in 1985. Kuwait was a regional hub of science and technology in the 1960s and 1970s up until the early 1980s; the scientific research sector significantly suffered due to the terror attacks.[171]

After the Iran–Iraq War ended, Kuwait declined an Iraqi request to forgive its US$65 billion debt.[172] An economic rivalry between the two countries ensued after Kuwait increased its oil production by 40 percent.[173] Tensions between the two countries increased further in July 1990, after Iraq complained to OPEC claiming that Kuwait was stealing its oil from a field near the border by slant drilling of the Rumaila field.[173]

In August 1990, Iraqi forces invaded and annexed Kuwait without any warning. After a series of failed diplomatic negotiations, the United States led a coalition to remove the Iraqi forces from Kuwait, in what became known as the Gulf War. On 26 February 1991, in phase of code-named Operation Desert Storm, the coalition succeeded in driving out the Iraqi forces. As they retreated, Iraqi forces carried out a scorched earth policy by setting oil wells on fire.[174] During the Iraqi occupation, more than 1,000 Kuwaiti civilians were killed. In addition, more than 600 Kuwaitis went missing during Iraq's occupation;[175] remains of approximately 375 were found in mass graves in Iraq. Kuwait celebrates February 26 as Liberation Day. The event marked the country as the centre of the last major war in the 20th century.

In the early 1990s, Kuwait expelled approximately 400,000 Palestinian expats.[176] Kuwait's policy was a response to alignment of Palestinian leader Yasser Arafat and the PLO with Saddam Hussein. Kuwait also deported thousands of Iraqis and Yemenis after the Gulf War.[177][178]

In addition, hundreds of thousands of stateless Bedoon were expelled from Kuwait in the early-to-mid 1990s.[179][180][177][24][178] At the House of Commons of the United Kingdom in 1995, it was announced that the Al Sabah ruling family deported 150,000 stateless Bedoon to refugee camps in the Kuwaiti desert near the Iraqi border with minimal water, insufficient food, and no basic shelter.[181][180] The Kuwaiti authorities also threatened to murder the stateless Bedoon.[181][180] As a result, many of the stateless Bedoon fled to Iraq where they still remain stateless people even today.[182][183]

https://en.wikipedia.org/wiki/Kuwait#19 ... :_Gulf_War

[BlutoSays]

You really *are* a 'numbers guy', aren't you -- ?

If all of that spending on the military is for 'defense', as claimed, then why does the U.S. have *hundreds* of bases all over the world -- ?


The US Military is EVERYWHERE

Why does the US have 800 military bases around the world?

What's wrong with education on *gender equity* / sex-education -- ?

You're critical of government *patronage networks* -- and, sure, I can see why, but there's no *alternative* under capitalism. Either it's profit-making or its patronage. Not much *choice* there.

Elaborate on Saudi Arabia and 9-11, if you like.

It's not 'inflation' when it's *internal* -- what's government *for*, if not to provide social services, and they could use *Monopoly money* for that, for all it matters.

Your video on foreign bases is from 2015. It stated (2:30) that the HHS budget was $78 Billion. In just seven years, the Health and Human Services budget has grown 20 fold to $1.631 Trillion.

https://www.hhs.gov/about/budget/fy2022/index.html

Yes, Covid is part of that, but do you think HHS spending will ever go down?

The DoD has BRAC reviews and changes its mix to deal with current world situations. The DoD takes cuts. What other federal cabinet agency has ever been cut? I can't remember one.


Face it, 70% of the federal budget is transfer payments. It's a wealth transfer mechanism and provides little to those who actually WORK and pay for it.

[late]

LEARN ECONOMICS.

Thanks, that was hysterical, first actual laugh of the day.

[late]

At the very least, part of the world will be in recession. Some poor countries are going to be absolutely hammered. We're talking Depression..

The fun question is how bad the other countries will get hit.

That's very much an open question, since a mild recession is routine. But if you look at the other economies, you can expect at least a moderate recession in much of Europe.

But that leads to questions about countries like China and India. I suspect China is already in recession, and it's going to get worse.

I don't know about India, they are going to get Russian oil at pretty reasonable prices, so there's that. But I don't have a clue, I don't pay attention to India.

I can tell you one thing, it ain't gonna be pretty.

[ckaihatsu]

Your video on foreign bases is from 2015. It stated (2:30) that the HHS budget was $78 Billion. In just seven years, the Health and Human Services budget has grown 20 fold to $1.631 Trillion.

https://www.hhs.gov/about/budget/fy2022/index.html

Yes, Covid is part of that, but do you think HHS spending will ever go down?

The DoD has BRAC reviews and changes its mix to deal with current world situations. The DoD takes cuts. What other federal cabinet agency has ever been cut? I can't remember one.


Face it, 70% of the federal budget is transfer payments. It's a wealth transfer mechanism and provides little to those who actually WORK and pay for it.

Your moralist pipeline *still* remains unconvincing, mostly because I don't think you're ready or able to really define what 'work' is, especially in the present-day.

If you want to do the work-versus-not-work thing, why not start by first defining what *you* think 'work' is, what it accomplishes, etc.

*My* point here is that *so much* productivity is derived from the use of machines and other technological leveraging, that these days it's impossible to find what fraction of any given product was due to 'work' inputs, and what fraction of it was because of *machinery*.