Global Economy Nearing a “Structural Recession”

[marmar]

Global Economy Nearing a “Structural Recession”
by Wolf Richter • September 10, 2015

[font color="blue"]And monetary policies will be “ineffective”[/font]


To the never-ending astonishment of our economists, global growth has been much weaker since the Financial Crisis than before it, despite enormous global stimulus from years of extreme central-bank monetary policies and record amounts of government deficit spending.

This should not have happened, according to our economists. Fiscal stimulus and expansionary monetary policies beget economic growth, which beget even more economic growth. That’s the theory. And that’s precisely what hasn’t happened. All it did was inflate asset prices. But the global economy has been a dud.

“If we calculated global growth with China’s true growth rate and not the official rate, global growth in the second quarter of 2015 would be only 2%,” figured Natixis, the investment bank of France’s second largest megabank, Groupe BPCE.

This “sluggish growth, close to a recession, is due to persistent, structural causes; we therefore use the term ‘structural recession’ to show that it does not have a cyclical origin,” the report explained. It’s not caused by normal cyclical fluctuations, but by “persistent structural problems that are specific to each region.” .....................(more)

http://wolfstreet.com/2015/09/10/global-economy-near-a-noncyclical-structural-recession/

[tk2kewl]

1. "record amounts of government deficit spending"

do they mean on wars? because otherwise most of the world has been subject to austerity, no?

[Demeter]

2. Wars and insolvent banks

and propping up stock markets....none of which produce a drop of wealth or growth, mind you.

[CatholicEdHead]

3. We still have trillions of dervitivates out there

And the holders still want full price even though they are worth a fraction of their face value.