The Federal Reserve and the European Central Bank recently engaged in new or enhanced monetary easing, which is a euphemism for printing money to support the US and European economy. Due to the sheer sizes of the US and European economy this means that the Federal Reserve and the European Central Bank are actually trying to stave off a recession for the global economy. When we add the incessant and long lasting monetary easing of the Bank of Japan, it seems three global leading central banks are trying to support the global economy.
Will the aforementioned monetary easing of the Federal Reserve, the European Central Bank, the Bank of Japan and the People's Bank of China recently help the global economy avoid a recession? No. Central banks' monetary easing is designed as a positive demand shock. And global demand is weakening due to the stage of the business cycle and sheer fear in market participants who are looking to protect the gains they have made during the remarkably long lasting business cycle of growth and rising equity markets since 2009.
The global economic recession, in my opinion, will come in 2021-2022 at the latest and be shallow measured in yearly falls of global GDP, but long lasting, which will ultimately make it deeper and more damaging than the Great Recession in 2009.
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Petar
Vladimirov Posledovich is not liable for any investment losses incurred
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Respectfully yours,
Petar Posledovich
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