Global Recession

Shanghai SSE Composite Index dropped 52 points (2.37%) today to close at 2170, which is 22 points away from its January low of 2148. The drop is due to the concern that the economy is experiencing weak growth. Hang Seng dropped 1.88% and Singapore STI dropped 1.66% in tandem.

Courtesy of www.tradingeconomics.com

Official data released today showing China's consumer price index (CPI) for June rose only 2.2%, continuing the down trend since July 2011, from a +6% level. The CPI is projected to fall further.

The June producer price index (PPI) contracted 2.1%, moving further into the negative territory.

A deflationary spiral would certainly spell trouble for the Chinese Government that used to inflate its way out of debts as well as for borrowers with the value of their assets/collateral that continue to shrink.

Marc Faber : We are in recession in Europe. We have an economic slowdown in the U.S. We have essentially a slowdown in economic growth in Asia. We have sliding commodities prices.

"I think we could have a global recession either in Q4, 2012 or early 2013. That's a distinct possibility."

Nouriel Roubini : Four elements - Stalling growth in the U.S. Debt troubles in Europe. Slowdown in emerging markets, particularly China, and military conflicts in Iran would come together in to create a storm for the global economy in 2013.

Click "My perfect storm is unfolding now."to read.



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