{"id":34044,"date":"2018-05-08T06:24:32","date_gmt":"2018-05-08T11:24:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34044"},"modified":"2018-05-08T06:25:43","modified_gmt":"2018-05-08T11:25:43","slug":"34044","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34044","title":{"rendered":"Is the US Exporting a Recession?"},"content":{"rendered":"<header class=\"wrapper entry-header page-header\">\n<div class=\"title-with-sep single-title\">\n<h3 class=\"entry-title\"><a href=\"https:\/\/www.cobdencentre.org\/2018\/05\/is-the-us-exporting-a-recession\/\">IS THE US EXPORTING A RECESSION?<\/a><\/h3>\n<\/div>\n<\/header>\n<div class=\"wrapper\">\n<div class=\"grids\">\n<div class=\"grid-8 column-1\">\n<div class=\"single-box clearfix entry-content\">\n<ul>\n<li>The Federal Reserve continue to raise rates as S&amp;P earnings beat estimates<\/li>\n<li>The ECB and BoJ maintain QE<\/li>\n<li>Globally, corporations rely on US$ financing, nonetheless<\/li>\n<li>Signs of a slowdown in growth are clearer outside the US<\/li>\n<\/ul>\n<p>After last week\u2019s ECB meeting, Mario Draghi gave the usual\u00a0<a href=\"https:\/\/www.ecb.europa.eu\/press\/pressconf\/2018\/html\/ecb.is180426.en.html\"><strong>press conference<\/strong><\/a>. He confirmed the continuance of stimulus and mentioned the moderation in the rate of growth and below-target inflation. He also referred to the steady expansion in money supply. When it came to the Q&amp;A he revealed rather more:-<\/p>\n<blockquote><p><em>It\u2019s quite clear that since our last meeting, broadly all countries experienced, to different extents of course, some moderation in growth or some loss of momentum. When we look at the indicators that showed significant, sharp declines, we see that, first of all, the fact that all countries reported means that this loss of momentum is pretty broad across countries.<\/em><\/p>\n<p><em>It\u2019s also broad across sectors because when we look at the indicators, it\u2019s both hard and soft survey-based indicators. Sharp declines were experienced by PMI, almost all sectors, in retail, sales, manufacturing, services, in construction. Then we had declines in industrial production, in capital goods production. The PMI in exports orders also declined. Also we had declines in national business and confidence indicators.<\/em><\/p><\/blockquote>\n<p>I quote this passage out of context because the entire answer was more nuanced. My reason? To highlight the difference between the situation in the EU and the US. In Europe, money supply (M3) is growing at 4.3% yet inflation (HICP) is a mere 1.3%. Meanwhile in the US, inflation (CPI) is running at 2.4% and money supply (M2) is hovering a fraction above 2%. Here is a chart of Eurozone M3 since 1999:-<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-1909\" src=\"http:\/\/www.cobdencentre.org\/wp-content\/uploads\/2018\/05\/eu-m3-money-supply.png\" sizes=\"(max-width: 660px) 100vw, 660px\" srcset=\"https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=660 660w, https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=1320 1320w, https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=150 150w, https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=300 300w, https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=768 768w, https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=1024 1024w\" alt=\"EU M3 Money Supply\" data-attachment-id=\"1909\" data-permalink=\"https:\/\/inthelongrun.co.uk\/2018\/05\/04\/is-the-us-exporting-a-recession\/eu-m3-money-supply\/#main\" data-orig-file=\"https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=660\" data-orig-size=\"2339,1654\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"EU M3 Money Supply\" data-image-description=\"\" data-medium-file=\"https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=660?w=300\" data-large-file=\"https:\/\/inthelongrunwerealldead.files.wordpress.com\/2018\/05\/eu-m3-money-supply.png?w=660?w=660\" \/><\/p>\n<p><em>Source: Eurostat<\/em><\/p>\n<p>The recent weakening of momentum is a concern, but the absolute level is consistent with a continued expansion.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>IS THE US EXPORTING A RECESSION? The Federal Reserve continue to raise rates as S&amp;P earnings beat estimates The ECB and BoJ maintain QE Globally, corporations rely on US$ financing, nonetheless Signs of a slowdown in growth are clearer outside the US After last week\u2019s ECB meeting, Mario Draghi gave the usual\u00a0press conference. He confirmed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,85,124,7380,14105,233,282,303,431,534,661,662,1264,827,3650],"class_list":["post-34044","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-boj","tag-central-banks","tag-cobden-centre","tag-colin-lloyd","tag-ecb","tag-european-central-bank","tag-fed","tag-interest-rates","tag-monetary-policy","tag-qe","tag-quantitative-easing","tag-recession","tag-united-states","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34044"}],"version-history":[{"count":3,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34044\/revisions"}],"predecessor-version":[{"id":34047,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34044\/revisions\/34047"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}