Monday, December 30, 2019

Top 12 Countries On The Verge of Recession in 2020.

It’s evident that a global recession is at hand. Europe is on the verge, if not in one already. Japan’s GDP growth is less than 0.4%. China’s growth is plummeting precipitously. The U.S. is now seeing clear signs of a recession next year. Why?. Simple; No one is borrowing any money, which is why interest rates are so low, and even negative Interest rates drop to encourage rich people and investors to borrow money. But now rich people and investors are actually paying countries like Switzerland to keep their cash . that’s how afraid they are of losing it altogether by investing in anything else. Why isn’t anyone borrowing?. Simple; The wealth gap between rich and poor has gotten so bad that the rich have stopped investing in new businesses or their existing businesses because the poor (everyone else) has stopped buying. No one has money for anything but the essentials anymore. The rich can build all the new golf courses or movie theaters that they want to, but the consumers of their products have so little money (because the rich have accumulated so much money) that they can’t afford to spend money on anything other than food and shelter. The chickens have finally come home to roost for the rich. Their greed has led to no customers for the products and services that made them rich. They wanted it all, and they got it all. Now the very foundation of capitalism is crumbling beneath their feet. No one wants what they’re selling. Welcome to The Atlantis Report. Over the last few weeks, there have been some startling leading indicators that we might witness a global recession sometime soon. An unlikely culmination of multiple factors is leading to this. US-China trade war. India's GDP slowdown. The Brexit turmoil. Major economies worldwide have shown signs of economic slowdown or even contraction in Q2 2019. A quick look at the most significant economies confirms the apprehensions. US economy grew by 2.1% in Q2 2019, down from 3.1% in Q1 and the slowest since Q1 2017. China, the behemoth fueling a large chunk of global growth, witnessed a “paltry” 6.2% GDP growth, the lowest in 27 years, and even below the 6.4% recorded during the 2009 Financial crisis. Japan beat GDP growth estimates in Q1 2019, but Q2 was a little slower. Germany is the largest economy to actually shrink (by 0.1%) in Q2 ( compared to Q1 2019), reversing a decade long trend of growth. As did the UK, for the first time in 7 years, shrinking by 0.2%, compared to 0.5% growth in Q1. France also slowed down to 0.2%. Finally, the second-largest Asian economy, India, is also slowing down, having recorded sub 6% GDP growth in Q1 2019. Also, both the real estate and the automobile industries are facing a slump. Over the last six months, major stock market indices have barely budged, and in some cases like the Nikkei 225 has actually shrunk. All the above are tell-tale signs of a looming recession — growth slump, contracting economies, slowing trade, and overall bearing market sentiments. And the straw to break the “bull’s” back is the latest development on both sides of the Atlantic, the sure-shot harbinger of impending economic doom. Today Twelve big economies are at risk of recession. It won't take much to push them over the edge. Germany, Britain, Italy, Brazil, and Mexico each rank among the world's largest 20 economies. Singapore and Hong Kong, which are smaller but still serve as vital hubs for finance and trade, are also suffering. Below are some of the countries, which are hand-picked by the experts and are put under the recession category; They are. #1. Germany: The economy of Germany shrinks to 0.1% in the second quarter, after the 0.4% anemic growth in the first half of the year. When there are two consecutive quarters of negative growth, it will definitely give birth to the recession. Therefore, Germany is standing near the tip of the iceberg, making it clear for a significant recession by the end of the year. Germany is a country that is well known across the globe for manufacturing cars and other types of industrial goods, through which it provides power to its economy. Half of the countries throughout the world, which include the US is also facing a manufacturing recession, and the German government is all determined to make good spending in order to stimulate growth. #2. Italy: Italy happens to be Europe’s third-largest economy and has been struggling for several years after it entered the recession in 2018. However, 2019 have not been that fruitful as well, the growth in the second quarter was 0.2%, and there are speculations that it might be in bad shape, as Italy sells its products to Germany, which is currently living on the edge. The repetitive political crises in Italy is making the country struggle, since the additional economic aid, is made through the government. Italy's government debt is the highest across the globe. #3. United Kingdom: When you compare the UK’s story-line with Germany, you will find the country to be in a similar situation. This is because the growth in the second quarter has been contracted 0.2%, after a 0.5% in the first quarter. The United Kingdom has been at the top when it comes to an investment slump. This is because of the uncertainty of Brexit. Therefore, chances are with the United Kingdom leaves its position from the European Union, then there are higher chances that the country will definitely go under the recession. #4. Brazil: This is a shocker as the largest economy of South America happens to shrink to 0.2% in the first quarter, and the second quarter also provided a negative growth after the data was released in August, which hence marked the starting of recession. The country of Brazil performed poorly when it came to selling goods overseas, and it also faced a sluggish demand in the home soil. Many individuals assumed that the country would benefit if China purchased soya bean and other products, rather than the United States, but the situation was way worse than that. This is because slumping commodity have been hurt, and the central banks are cutting interests, and the government of the Brazilian president is handing out cash payments, in order to stimulate the growth. #5. Mexico: The United States neighbor from the southern region has become a big bulls’ eye for Donald Trump’s immigration and trade wars, which has turned the tables for the worst. The economy of Mexico contracted a growth of 0.2% in the first half and enabled the country to make a narrow escape from a recession at 0.1% in the second quarter. That is not all, Mexico has also suffered declines in business investment and confidence as companies fear leftist President Andrés Manuel López Obrador will nationalize industries. #6. Argentina: To keep it short, the country of Argentina is in a deep crisis. This is because the country is already under the shadows of recession, and it is getting much worse day by day. Therefore, in recent news, it has shown that Argentina’s stock market faced a drop of 50%, and this is recorded as the second-largest crash, which any country has experienced since 1950. The country is currently going through inflation, and with the high price on the side, the Argentinian president faced a defeat in the nations, primary election. The investors are worried that the country of Argentina will not be able to repay its debt, and the middle-class residents of the country will fear that they won’t be able to afford their everyday products and service. #7. Singapore: This Asian nation reported that its economy shrunk 3.3 percent in the second quarter, a sharp reversal from over 3 percent growth in the first quarter. Singapore blamed the U.S.-China trade war for its problems, as its economy is highly reliant on exports. Many economists watch Singapore and South Korea as accurate indicators for what’s ahead for the global economy because these nations trade with so many others, especially China and the United States. #8. South Korea: South Korea has been able to avoid a recession in the first half of the year — hardly. The South Korean economy contracted 0.4 percent in the first quarter but grew 1.1 percent in the second quarter, a better-than-expected performance that many experts don’t think will last. Japan and South Korea are in the midst of a trade war of their own that is expected to drag down growth and make it more difficult for South Korea to sell electronics and cars abroad. The South Korean central bank decreased interest rates, but it’s uncertain if that will be enough. Electronics exports are down about 20 percent in recent months, and semiconductor exports are down more than 30 percent, according to ING. #9. Russia. A Russian economic institute warned that Russia could be in a recession by the end of the year after expanding a modest 0.7 percent in the first half of 2019. Russia has struggled since 2014 as oil prices nosedived, and other nations put sanctions on Russia because of the war in Ukraine. Russia has worked to safeguard its economy as much as possible from the U.S. sanctions by limiting deals with the United States and trades in U.S. dollars, but that has meant a bigger dependence on China, which is also now slowing. Russia has also tried to build up its government cash reserves, which has left little money for stimulus. #10. China. The Chinese government is deliberately slowing growth by cutting back on liquidity because it has learned that when large amounts of money are introduced into the economy, as was done in late 2008 following the subprime mortgage crisis, it is likely to lead to large amounts of debt. Consumers are also cutting back on spending and adopting a wait-and-see attitude because of uncertainty caused by the trade war with the US. President Xi and his trade-negotiating team want to remove this uncertainty as soon as possible because they hope that consumer confidence can be restored. #11. India. The slowdown in India has already started. Fortunately, so far, it has been mild and involving a few sectors. Unfortunately, as there is a threat of a recession in the US (Experts say chances are 25% in 2020 and 75% in 2021). India can be affected depending on how serious the recession can pan out in the US in 2020. It can be mild just for two quarters or may extend for a longer time. And Finally, #12. The US. The United States economy is mostly a service economy that feeds off internal demand, which provides some insulation to problems overseas. But there are limits to that buffer. As other countries falter, global investors are buying up U.S. Treasury bonds, causing the yield curve to invert in the United States, a recession warning sign, and a reminder that there are ways that panic abroad spills over. There is a chance fora U.S. recession, not because of the yield curve itself, but because of the lunacy of trade policy and the damage, it’s doing. The US is under a lot of pressure from all angles, both internal and external, and there seems to be no workable solution to her inevitable fall from grace. The sanctity of the US Dollar is being challenged profoundly by a severe contender from the far East. China is moving with lightning speed in their effort to unseat the dollar from the global reserve currency throne, offering Chinese Yuan as a better and recession-proof store of value. The US economy relies heavily on international oil trades transacting in US Dollar, or Petrodollars as it were. When President Nixon decided to abandon the Gold Standard in 1971, it was the cunning brilliance of Henry Kissinger in the early 1970s that kept the status of the US Dollar virtually unshakeable, when he offered military protection to the Kingdom of Saudi Arabia and subsequently all oil-producing countries, under the banner of The Organization of Petroleum Exporting Countries (OPEC) of that time, in return for these countries transacting all oil sales globally in dollars. Please share with us your opinion in the comment section below on which countries you see more likely to experience a recession in 2020. This was The Atlantis Report. Please like. Share. And Subscribe. Thank You.

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