No saviour in sight as world credit cycle rolls over

This may be as good as it gets for the world economy. The HSBC index for the global business cycle hit a three-year high around Easter, and has since rolled over.

Any country that has failed to lock in a self-sustaining recovery by now must expect to pay the price for the failings of its policy establishment, and some risk a slide into outright deflation.

mrmetaxis: Mr. Evans-Pritchard makes an excellent point: Should there be another round of QE/helicopters, we must surely find a better way to inject the money. Today’s method is enriching the uber-elites, with a painfully slow trickledown. We have witnessed the creation of a new rentier class. The rich - who own assets such as equities - have seen the value of those assets shoot up, subsidized by those on fixed income such as pensioners. Prudent savers have been treated with contempt and have had their wealth stolen to help boost the wealth of the very people who created this depression in the first place. But what is to be done? The levers of power are controlled by the elites. Their contempt for the rest of us is palpable. 

Akula971: I don't like them to be called "Elites" as there is nothing of excellence about them. We live in a Kleptocracy were the thieves make the rules, rules that allow them to steal. Until Joe Public gets off his arse, and out onto the street protesting, nothing will change. The only change you ever see is that of the puppet that faces the public. Those that control the puppet are the thieves.

the_guv: "But what is to be done?" In the first instance, know thine enemy. Might I humbly suggest, DT, that you bother to cover next week's Bilderberg meeting in Watford, and if necessary run the headline "Is Ken Clarke a Traitor" when this Steering Committee member refuses your request for an interview about this plutocratic ensemble [that has boasted of bringing about EMU]? No. Didn't think so. Spose you'll just write a piece, instead, about "conspiracy theories". (Anyone for treachery?)

yadam: Sorry but this is not true. Pensioners have in general seen their assets' values either maintained or increase in value due to the rush to buy property. Had QE not been implemented house prices could have seen much bigger and sustained falls. The real losers of this policy are the young / younger - typical baby boomer claptrap.

zebedee: Ah yes… the law forbidding pensioners from buying equities. Highly iniquitous and highly fictitious.

ryck: Nearly every US IRA has equities in it. The mumbling about rentiers is from the last century.

thebleedinobvious: Not only are we heading for a major crash (it could be argued we're already in one but shielded from the worst of the symptoms by bailouts and money printing, which will make the final crunch even worse) but it seems to me we've raised a generation less able to deal with the consequences than any other in history. Quite a combination.

nbforrest: I am afraid that the generation we raised has no clue and will simply turn to Washington to keep them in the style they are used to. The money has run out but if the elites in the US and Brussels can stave off disaster while they accumulate a fortune to take to their bolt-holes they will. Once the financial Armageddon comes, those of you in large cities had better buy window bars and steel doors.

Hugehawk: And guns and ammunition.

Carl Thomas: It's not the generation you raised that spent all the money. I think you're needing to look in a mirror. Generation 'Y' is shaping up to be the first generation less well off than their parents when inflation, etc, adjusted.

thebleedinobvious: I didn't for a moment suggest this generation are responsible for the mess we're in, I'm actually in the habit of apologising to young people for my generation having ripped them off. I merely pointed out that a media studies degree (and accompanying debt) and/or detailed knowledge of human rights or health and safety laws won't be much use if and when the ordure really hits the air conditioning.

ramonlull: How long before a full-on revolution kicks off in a major Western country?

tigrisofgaul: So long as we have food in the fridge and our skybox we won't be hitting the streets.

marcus_junius_brutus: So we have to wait until the power brown-outs start?

dandaniels:  The food thing will become a major problem. Research agriculture and farming as warned by Jim Rogers.

the_guv: Sky will be putting out long after the food runs out *, but whether the electricity is on is another matter again. Oh well, more bail-outs for the boys, no? Or maybe we should have allowed capitalism not to have become diseased by Fascism? Darwin's law. The real crisis is in the wings, best get your skates on getting those guns, Mr President! EDIT: * for the plebs

crafford: Indeed, Tigrisofgaul - "bread and circuses" - worked for Nero - for a while.

Pheasant_Plucker: Ammunition is being rationed here in USA. I know in UK that is not a staple but over here it is like milk, eggs and bread. Consequently prices have more than doubled. I have not been able to find a solid reason why - lots of wild speculation. Costs of production/raw materials have not changed so not the cause. In this vast nation normally manufacturers would increase production to meet the demand. It is not rocket science to make bullets and you can even buy DIY kits at home. These are being sold out too. Very puzzling.

twizzle: 'Homeland Security',,,aptly named, methinks,,,has just bought the entire ammunition stock as I understand. Around 2 billion rounds. And they'll buy another 2 billion if needed to ensure the price doubles again. After all, it's for your own safety, isn't it?

drjonathanwilson: Well balanced commentary, Ambrose. Right conclusion. Long term trade imbalances combined with long term fiscal deficits driven by welfarism - a more toxic mix is hard to construct. And as for the EMU - a total disaster on all accounts - political logjam with a fiscal and monetary dictatorship waiting in the wings. Britain *must* cut loose from the EU. Only the politically and economically agile can hope to survive the coming "snap back". Vote UKIP at every opportunity for the required leadership changes. Jonathan

tigrisofgaul: It being a debt based ponzi scheme nearing its inevitable end might also have some bearing on the issue. It seems the discussion is focused on how to prop up this dying system rather than innovation.