The U.S. Commerce Department revised slightly downward its already meager assessment of the third quarter of 2015. The updated data reveals that in Q3 the American economy grew at only 2 percent. Overall, the first three quarters of 2015 indicated GDP growth in the United States of two percent. Unless there is an unexpected and massive pickup in Q4, the overall rate of GDP growth in the U.S. will remain at about 2 percent for 2015.
Marginal growth, far below potential, has been the reality since the “recovery” from America’s Great Recession of 2008, sparked by the global economic and financial crisis. Despite unprecedented fiscal and monetary stimulus, the “recovery” still only generates a level of subpar growth that is not only counter to previous recoveries, but is at virtual stall-speed. As the Fed begins to ramp up interest rates after nine years, should another major recession strike the U.S. economy, there are no quivers left in the arsenal of government policy measures.
DONALD TRUMP 2016: America’s Next President? is available on Amazon: http://www.amazon.com/DONALD-TRUMP-2016-Americ…/…/B0156PAAVM
With the announcement by the Federal Reserve that it is raising its interest rate by 25 basis points, a policy of virtual zero-interest rates maintained by America’s central bank–and imitated by other central banks worldwide since the global economic and financial crises that arose in 2008–has officially come to an end. The minor rate increase of 0.25 percent is the first time since 2006 that the Fed has upped its benchmark interest rate.
The end of the extraordinary and long-lasting monetary easing aggressively maintained by the Fed for nine-years thus comes to an end, the justification being that the policy “worked,” the evidence being a very minor rise on forecasted future GDP growth prospects for the American economy. The decision by the Fed to raise its interest rate has supposedly been priced in by the equity markets for probably the last two years, at least. Nevertheless, the continued weakness in the global economy may provide a lesson in how fragile it really is, once the monetary pump-priming of zero-interest rates is gone.
DONALD TRUMP 2016: America’s Next President? is available on Amazon: http://www.amazon.com/DONALD-TRUMP-2016-Americ…/…/B0156PAAVM
With average oil prices on the global market falling under 40 dollars per barrel, it is clear that the depression in petroleum commodities is not only sustained, but likely to endure into 2016. This is based on projections that oil supply will grow faster than consumer demand. The emergence of post-Iran sanction oil on the market in the coming year assures the oversupply of petroleum.
The collapse in oil prices is both an indicator of a weak global economy, and the cause of further economic erosion. The economic and fiscal harm the contraction in oil prices has created has also had major political implications in economies highly dependent on the export of carbon-based commodities. The defeat of the conservative government in Canada in the recent national election is directly attributable to a weak Canadian economy, largely caused by the fall in the value of oil exports from the province of Alberta. Venezuela is another case of political fallout caused by the crash in the global oil market. The socialist regime of President Maduro lost control over the nation’s legislature in the recent elections, again the primary cause due to economic damage resulting from the collapse in oil export earnings.
The projection of continuing weakness in the global oil market will undoubtedly create further political instability in economies highly dependent on oil exports.
DONALD TRUMP 2016: America’s Next President? is available on Amazon: http://www.amazon.com/DONALD-TRUMP-2016-Americ…/…/B0156PAAVM
