It might seem peculiar to some people to talk about the ‘next’ global recession, given that it doesn’t feel like we ever really got out of the last one. Eight years on from the global financial crash we find that the global economy is still drowning in debt, and this new era of low economic growth, high unemployment and squeezed wages/conditions has somehow become normalised.
‘Secular stagnation’ is the description de jure of the global capitalist system’s inability to return to another bout of prosperity. But while our old friend Boom departed the stage some time ago, his unruly brother Bust is waiting in the wings, preparing to make an unwelcome return.
Well that’s according to some of the world’s major financial institutions which have been forecasting that 2016 will be the year of the next big global downturn. In the last fortnight the IMF reduced its global growth forecast to 3.1%, that’s a mere 0.1% over the threshold of what constitutes recession. While last month Daiwa – Japan’s second largest brokerage house – and Citibank both released reports in which they made a global financial meltdown in 2016 their baselinescenarios! Let that sink in for a minute; they’re not saying a meltdown next year is their worst case scenario, they’re saying it’s their assumed one!
So what could trigger this predicted crash? Well to echo the words of Yogi Bear, ‘It’s tough to make predictions, especially about the future’. Nevertheless there is general agreement that debt was the trigger for the crash of 2008. Considering that today the global economy is even deeper in the debt mire, it requires no great leap of faith to believe that debt will be central to the coming crisis.
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