Let me first of all refer to a news item that CNBC
has reported. It says the global economy seems trapped in a "death
spiral" that could lead to further weakness in oil prices, recession and a
serious equity bear market. It also says that some analysts have turned bearish
on the world economy this year, following an equity rout in January and weaker
economic data out of China and the U.S. The other explanations include:
- U.S. dollar has risen by around 20 percent against a basket of currencies.
- Crude oil prices have tumbled by around 70 percent since the middle of 2014.
- The dollar would weaken in 2016 and that oil prices were likely bottoming, potentially providing some light at the end of the tunnel.
- The forecast reflects expectations of gradual improvement in countries currently in economic distress.
- The various factors would lead to significant and synchronized' global recession and a equity bear market.
- The silver lining is that the world economy will grow by 3.4 percent in 2016 according to the International Monetary Fund.
To substantiate my point it suffices to say that the global media has
been talking about declining number of oil rigs in the US but oil output does
not show any corresponding reduction, on the contrary output is on the rise.
Reportedly number of active rigs has come down to less that from peak of over
1600.
Lately the World Bank has also warned that global growth rate would
come down due to ongoing wars in the Middle East. Interestingly the developed
world pushes the countries into proxy wars and then basing these create huge
and cry about plunging economies.
I will conclude on the point that the US and Saudi Arabia were partners
in taking oil prices to record high and now the animosity between the two is
responsible for the rock bottom prices.
Previously the wars were fought with arms but now countries are subjugated
by destroying their economies. The most glaring example disintegration of USSR
and other living examples are Iran, Iraq, Libya, Nigeria and Sudan.
The moral of the story is that the death spiral is in nobody's interest
but rational behavior, most likely, will prevail over. But the broadcaster has
shown only one side of the coin. Now it is up to the audience and readers to
find out the motives of super powers, their modus operandi and above all the disinformation
spread to mislead the people, especially those who are being exploited.