NVDL: I think we are moving closer to a point where populations around the world are going to go apeshit when they realise what is actually happening. I believe this will happen when the penny drops of how hopeless our situation is. That may be true, but we will still need to find ways to be constructive and make do with what we can, and probably our greatest resource will be each other. The flip side is that our greatest threat will be in other people too - the looters, the criminal mobs, the vigilantes. But our best prospects lie in working together in co-operative communities.
For those who argue that the rate of growth of economic activity is turning positive--that economies are contracting but at a slower rate than in the fourth quarter of 2008--the latest data don't confirm this relative optimism. In 2008's fourth quarter, gross domestic product fell by about 6% in the U.S., 6% in the euro zone, 8% in Germany, 12% in Japan, 16% in Singapore and 20% in South Korea. So things are even more awful in Europe and Asia than in the U.S.
There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession. Here's why:
For China, the growth of credit is only driven by firms borrowing cheap to invest in higher-returning deposits, not to invest, and steel prices in China have resumed their sharp fall. The more scary data are those for trade flows in Asia, with exports falling by about 40% to 50% in Japan, Taiwan and Korea.
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