Category Archives: Global Economy

Global Economy

The Recovery Stalls

The Recovery Stalls


The Economic Sentiment Index of the European Commission for August shows that the recovery of the European economy is slowing down. Not only has the pace of recovery slowed significantly, but the data for Spain reflected evidence of being the only economy in the euro area where the index fell compared to July. If we look at the OECD leading indicator index, the evolution is also worrying. 60


Bloomberg also tracks the daily activity in most economies and the evidence points to a deceleration in August in most developed and emerging economies. Only the United States seems moderately better in comparison, although the slowdown in the recovery process is also evident.

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The U.S. Will Not Recover Pre-Crisis Jobs Copying The Eurozone Policies

The employment recovery in the United States is as impressive as the collapse due to the lockdowns.

The U.S. Will Not Recover Pre-Crisis Jobs Copying The Eurozone Policies

In April I wrote a column stating that “The U.S. Labor Market Can Heal Quickly”
and the improvement has been positive. Very few would have expected the
unemployment rate at 8.4% in August after soaring to almost 15% in the middle of the pandemic. This means that the unemployment rate is in August 2020 lower than what analysts projected for the end of 2020. Even the measure of underemployment (U-6) has fallen from 22.8% to 14.2%.

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The U.S. Dollar Collapse Is Greatly Exaggerated

The US Dollar Index has lost 10% from its March highs and many press comments have started to speculate about the likely collapse of the US Dollar as world reserve currency due to this weakness.

These wild speculations need to be debunked.

The US Dollar year-to-date (August 2020) has strengthened relative to 96 out of 146 currencies in the Bloomberg universe. In fact, the U.S. Fed Trade-Weighted Broad Dollar Index has strengthened by 2.3% in the same period, according to data compiled by Bloomberg.

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Bankruptcies Rise Despite Trillions Of Liquidity

Bankruptcies Rise Despite Trillions Of Liquidity

Misguided lockdowns have destroyed the global economy and the impact is likely to last for years. The fallacy of the “lives or the economy” argument is evident now that we see that countries like Taiwan, South Korea, Austria, Sweden or Holland have been able to preserve the business fabric and the economy while doing a much better job managing the pandemic than countries with severe lockdowns.

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