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Giant U.S. Bank Says “Global Economy in Death Spiral!”


Citi Death Spiral

An analyst for one of the United States’ biggest banks has told their clients what many of us already knew – the world economy is not all puppy dogs and rainbows.

In fact, buckling under mountains of debt, much of the world is teetering on the brink of recession (or even depression).

This week, a group of Citi strategists said:

“The world appears to be trapped in a circular reference death spiral…”

and that:

“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”

Since the great recession began in 2008, the world’s central banks have gone on an unprecedented money-printing spree in an attempt to prop up asset prices and stimulate demand. Despite spending trillions of dollars, the result has been anemic GDP growth and lackluster employment growth.

Now, after spending all that money, it looks like the world is slipping back to where we started this adventure eight years ago. Despite what the wizards in charge believe, you can’t escape the inevitable. You may be able to postpone it a bit, but that usually just means it comes back harder and faster in the end!

Wise men and women understand what’s coming and prepare accordingly!

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Photo by David O’Hare licensed under Creative Commons 2.0.