A recent study suggests that the U.S. will soon get in a recession. Simply put: mainly because it’s that time again to do so. Currently, the US economy is still very good.
The good news this week came on early Thursday morning (local time) from the U.S. Department of Commerce: In the first quarter of 2019, the gross domestic product (GDP) rose in the USA, with an annualised Rate of 3.1 per cent. In the previous year, there had been a growth of 2.2 percent.
Carried the stimulus to the beginning of the year mainly by rising exports and higher state expenditure, the Ministerial officials. Private consumption did not, however, increased by 0.9 per cent as strong as previously. Previously, the Plus was still at 2.5 percent. Private consumption in the US is traditionally more than two-thirds of GDP.
However, all is not Gold that glitters …
Many experts, including those of the U.S. Central Bank, the Fed, in the meantime, they assume that the growth of the US economy is likely to cool down. The Federal Reserve Bank branch in Atlanta, Georgia, has calculated that it will be in the second quarter, when U.S. GDP, but only to a Plus of 1.9 per cent projected for the year.
In the Central Bank, the voices that warn that the trade dispute with China, the US economy could harm are on the increase. Jerome Powell, President of the U.S. Central Bank, has even already recognize that the Fed is ready to cut rates again, this should appear to be for cyclical reasons, necessary. Currently, the policy rate is between 2.25 and 2.5 per cent. In the markets is expected, so the news Agency Reuters, with a rate cut as early as next month.
A look at the history
Against this Background, the views of a study published by the Think Tank DB Research, a subsidiary of Deutsche Bank, this month is worth it. The authors analyze the history of the growth and contraction phases of the American economy.
With the beginning of next month, according to the authors, will set up the U.S. economy set a record: never in the history there had been such a long uninterrupted period of economic growth. The study looks back on a period of about 170 years in which the economic framework data and will be recorded charged.
Anyone who has will be given more … in Front of allerm the Rich benefit from the longest growth phase in the US economy
A dynamics-climate change
The survey shows a dynamic development, which is so similar to that of the climate research. Not only the economic growth phase longer (or analogue: the temperatures are higher), the economic expansion periods are always faster to each other (in the case of climate data, this would mean: The extreme weather and severe weather events always follow fast on each other). The study authors note: “the last of The four growth periods to recorded the longest ever.”
The other two record periods were due to the defence efforts in the Second world war and the failed economic policies of the 1960s, as the government had failed to combat Inflation in time, and the recovery, therefore, artificially alive have kept.
On gold, it hung …
As weather, the growth of the vagina and recession periodicals make up the Deutsche Bank researchers, the abolition of the gold standard. The Bretton Woods System, the economy between 1946 and 1971, subject to, had the economic and financial policies set strict limits. The Dollar was tied to a fixed exchange rate to Gold. Simply put: There was only so much money as there was gold reserves.
With the abolition of the gold bond could be (and was soon printed as well) so much money and put into circulation, as it appeared economic to political necessity. This recession has weakened tendencies, and delayed. This turning point, the authors summarize this way: “As the bonds were of the Gold is becoming weaker and write-downs more frequent, cycles have been in the Business longer and longer.”
The “cleansing” effect of a recession namely. The pure doctrine of capitalism has a quasi-Darwin aspect: An economic downturn with a Shrinking of the economy in tier, especially to weak companies would fall victim to a healthy and strong company, however, survive from the crisis even more prominent.
The value of globalization
Until the 1970s, did not, according to the study, the trading across borders played a crucial role as it is today. On the contrary: “Prior to the seventies, the share of global trade had not been (in GDP) is much larger than in the period a hundred years earlier.” The have changed but thoroughly, the authors explain how large the share of global trade in the gross domestic product of the United States since the 1980s, become.
China’s gradual “Reintegration” in the global trade after the country’s centuries-long isolation, have also helped to give the world trade a tremendous boost. The global trade was just came towards the end of the twentieth century, more and more momentum and have rates for higher growth and significantly lower Inflation taken care of.
The still ongoing boom phase of the economy creates mainly assets, but no substantial growth.
An end to threatening with terror?
You can see the important role that the world trade for the American economy, is another message that came out in the last few days on the Ticker, sit up and take notice. Accordingly, the of the United States from the fence broken trade conflict with China, more and more a burden for global trade, will. The “Global Trade Barometer” (GTB) of DHL, the Deutsche Post subsidiary evaluated international logistics-data that indicates, with a Minus of eight points to a decline in world trade for the next three months.Both the index values for the lake as well as for air cargo deteriorated accordingly. The highest decline in a single country would be recorded in the United States, the largest economy in the world, the Outlook to eleven points dropped. China recorded a Minus of seven points.
This is due to negative expectations for the main export categories are. A decline in imports and weak export growth in the Background. The index for Germany fell in the study only minimal.
Also of the US group FedEx had declared this week, the conflict will be a burden to his Outlook for 2020. The company is regarded as its domestic rival UPS as a Barometer of the U.S. economy, because it transported Goods from the various industries.
Lastly, another result of the DB Research study: “Interesting”, the authors found that the longest growth phase of the US economic history, reflected mainly in the growth of asset values. As far as the pure economic growth, whether this record-cycle, but “one of the weakest”.