Monday, March 17, 2014

Global industrial production continues to expand

As we enter the sixth year of the great equity bull market, it is understandable that many worry about the next bear market. Nothing goes on forever, to be sure. But as I see it, there is still no sign of impending recession. The Great Recession was devastating, and many parts of the world—particularly the developed nations of Europe—have yet to recover the losses they suffered. There is still plenty of idle capacity in the global economy, so we could still be due for at least several more years of recovery before there are any physical constraints on further growth.

The chart above includes data through December 2013. We know that the first few months of 2014 have been a bit on the slow side in most parts of the world, but a global expansion such as we have enjoyed for the past five years is not something that tends to collapse of its own weight—it takes some big shocks (e.g., very tight monetary and fiscal policy, spikes in energy prices) that we have yet to see.

Despite the worst winter weather in decades, February U.S. industrial production exceeded expectations (+0.6% vs. +0.2%) and posted a 2.1% gain over the previous 12 months, reaching a new all-time high. The Eurozone sovereign default crisis took a tremendous toll on its economy, but industrial production there has been recovering for the past year.

U.S. production of business equipment increased 2.8% in the past year, reaching a new all-time high. It's been a slow recovery, but the important thing is that conditions continue to improve on the margin.

German industrial production reached a new post-recession high in January, and has likely continued to expand.

Japanese industrial production is still more than 10% below its pre-recession highs, but it posted an impressive gain of 10.4% in the 12 months ending in January.

Global economic activity could be a lot better, but at least it is still improving on the margin.


Benjamin Cole said...

Nice post. Glad Scott is back in action.
Something fishy going on in China?
Euroinflation sinks below 1 percent...
Maybe deflation next?

theyenguy said...

The Industrial Production that is reported here will be rapidly turning lower.

Acting in dispensation, as presented by the Apostle Paul in Ephesians 1:10, Jesus Christ completed liberalism on March 14, 2014, as both a paradigm and an age, and pivoted the world into that of authoritarianism, by turning equity investments, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, Yield Bearing Investments, DTN, as well as currencies, Major World Currencies, DBV, Emerging Market Currencies, CEW, as well as credit investments, Distressed Investments, FAGIX, and Junk Bonds, JNK, lower in value.

Under his economic administration, all become debt serfs, rather than investors, by an ever increasing destructionism, coming with the final phase of the Business Cycle, that being Kondratieff Winter, where economic deflation is the new normal, replacing global growth and expanding industrial production, stemming largely disinvestment out of currency carry trade investing, such as Global Producers, FXR, such as ALU, FLR, FLS, IP, PHG, and ETN, as well as out of debt trade investing, such as leveraged buyouts, PSP.

The dynamo of regionalism is now the singular dynamo of economic activity, which produces debt servitude centric austerity for all.

Regional economic fascism is rising to rule in the world’s ten regions and occupy therein in every one of mankind’s seven institutions.The beast regime is making landfall in the Eurozone, by The Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, that is a top dog banker, who in the process of minting money, takes a cut, is fated to be the singular, all inclusive, economic experience, as the ships of state flounder, and sink, in the tossing sea of debt deflation driven, competitive currency devaluation.

Under authoritarianism a new form of money is rising to rule all. Regionalism is establishing a new debt based money system, that being the diktat money, where regional overlords, ruling in each one of the world’s ten regions in mandates of regional economic governance, and in debt servitude schemes of totalitarian collectivism, to unify all of mankind’s seven institutions, and establish regional security, stability and sustainability.

Those living in the EU will soon be prisoners in a regional banking, debt, fiscal, debt, economic and military panopticon and union, serving as the defining model for regional integration throughout the world.