Is another recession on the Horizon?
Foreword The global economy had demonstrated a high degree of correlation to the economic fortunes of the biggest economies in the world. In the representation below, the economy of the United States is shown to be the biggest globally representing 24.4% of the world's GDP. If the United States do show economic weakness, that same weakness will soon spread to the rest of the world through the global trade flows. I am in the opinion that a recession could crystallise in about 1 to 1 1/2 years (read Q3 2020 - Q2 2021). This opinion holds the assumption that American policy makers and the Fed do not change their current policies drastically. I will explain how I had come to that opinion in this article. Economic Sentiment and Expectations Since the recession of 2008-2009, the American story had been that of recovery and unprecedented growth lasting almost a decade under the auspices of the Fed's aggressive expansionary monetary policy. Most will recognise that reg...
