Full Fledged Global Recession More Likely

Germany’s industrial output dropped 1.8pc in September and orders fell 3.3pc, far worse than expected. Spanish industrial output fell 7pc. Annalisa Piazza from Newedge said it was a shocking upset and implies that Germany may be in recession already.

The International Monetary Fund has warned that a fiscal shock of this scale [a US “fiscal cliff”] would abort America’s fragile recovery and risk a full-fledged global recession. _Evans-Pritchard

The US government has fallen further in debt by almost $6 billion since Obama took office. Expect that number to shoot upward very quickly over the next several years, as almost all restraints on the Obama agenda have been removed for the lame duck term to come.

…the fiscal cliff overshadows all else and it is unclear whether either side will yield ground. Mr Obama vowed to put aside party differences in his acceptance speech. “You voted for action, not politics as usual,” he said. But he has previously threatened to let America go over the cliff if Congress blocks all tax rises.

…Richard Lewis from Fidelity Worldwide Investment said the dispute will go to the wire with much collateral damage as companies hold back spending and investment. “After a lot of wailing and gnashing of teeth…

Ethan Harris from Bank of America said it is risky to assume that such profound ideological differences can be ironed out easily. There is no guarantee that “sane heads will prevail,” he said. _Telegraph

Unfortunately, there are no sane heads in a position to prevail.

Mr. Obama has never been interested in the nuts and bolts of governance or main street level economics. He would rather play golf, go on exotic vacations, host very expensive taxpayer financed parties, and display about as much practical usefulness as a male model on a fashion shoot.

Buckle up, America and the world. It’s going to be a very wild and more than a little surreal ride indeed.

For several decades, the US government has been morphing into something completely unrecognisable to US constitutional scholars. That transformation is now occurring at warp speed. The US government now tries to be too many things for too many cronies and dependents, is wildly overextended in an exponentially accelerating manner, and is destined to fail very badly. When it fails, it will fail in a cascading manner with much collateral damage around the world.

US citizens had best plan ahead for themselves and their loved ones. Because honestly, no one in their government cares about them one way or the other.