Have spent the morning chewing on the world's business pages. Not a
nourishing breakfast, really ...
'Globalisation' may not have looked too synchronised while the hegemon
seemed to be going well, but it sure looks synchronised when it's not.
There are more multi-billion-dollar bankruptcies to come (no way can all
the remaining telecoms ride this glut - massive destruction of capital
looms in that sector) and some significant investment banks may be
brought to breaking point as the massive communications sector reduces
to its residual behemoths and consequent increases in tariffs (using new
market power to service debts and return to actual profits). There's
not enough room left in the interest rate to avoid the credit crunch to
come, and it seems recent investment bursts in US manufacturing might
also come unstuck, as the stubbornly materialistic US consoomer seems to
have hit the card's limit. Canada and Mexico depend so directly on US
demand that they can only watch with horror.
The US's selective protectionism seems designed to hit the world's most
desperate economies, in textiles, food and minerals, so Africa can only
anticipate an almost genocidal tide of 'market forces'. China will hit
its neighbours in the region with lots of concerted competition in
production, but relatively little in new markets for those same products
in the near future. So deflation in SE Asia, I reckon. Which is bad
news for Europe, which depends mightily on exporting to the region.
Latin America can't be fixed with a fleeting boost to Brazil's index -
that money is there to get major US institutions out of immediate
trouble with their Brazilian investments, and it'll be back in US hands
in a month or two (albeit in private hands rather than in the public
accounts whence it came). And Australia relies for half its exports on
Japan and a US bent on going the way of Japan.
And then there's the Middle East ...