Global Slowdown Not The Worst Yet

The current global growth slowdown, and potential recession, may be the worst in the last 30 years. The current situation started with the US Sub-prime, leading to financial crisis which spread globally.

This may not be the worst that is yet to come.

Last October (2007), I wrote about the "Anticipation of Next Recession" (http://globalcookie.blogspot.com/2007/10/anticipation-of-next-recession-or-great.html), which I was making a guess that it will happen some time around year 2014. In recent period, there were news coming from global financial leaders about the US Recession which is the worst since the last Great Depression (1929).

Many countries and funds have scrambled to bail out financial institutions trapped in the US Crisis that threatened to cause some to wind up. Billions of dollars have been pumped into US financial institutions over recent months. Singapore alone had contributed at least US$40 billion through the Government Investment Corp (GIC) and Temasek Holdings.

Is this the worst?

Going back to my posting in October 2007, the anticipation of the next Great Depression was based on my assumption that the Baby Boomers' retirement will create a vaccum, etc. That was just talking about retirement of Baby Boomers. I like to shine more light into that post.

China had seen double digit growth over the last 20 years, since opening up of their economy. China economy have evolved and the Chinese spending power have grown so much, they become the biggest consumers now.

However, a worrying trend have evolved together with their growth. Chinese (no statistics) are spending beyond their means. Their car population have outgrown anywhere else in the world. Are these car owners really affluent enough to afford cars as part of their lifestyle?

Should a melt down happen in China years from now, coupled with global greying population (not just US), it may create a major problem for economies around the world. Emerging countries currently do not have the financial and consumption ability to sustain the consumer power of the Developed Nations and China.

Will this lead to a real Great Depression years from now? The worst may yet to have been seen.