The global economy is heading to the Great Depression

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He stressed that Qatar is immune .. QNB:

The global economy is heading to the Great Depression

 

 

 

Doha - Ensign:

Considered the report QNB Group that can decline the significant commodity prices during the weeks the last e -mqturna prospects of a global economic continues to deteriorate and corrections major stock and bond markets Alaalmih- that leads to the "Great Depression", ie, to the vortex of the conditions of deflation - Asset around the world. But it is likely to remain immune to the State of Qatar is well exposed in the event of the global economy to shrink large. Although the decline in energy prices may mean that current account surpluses and fiscal surpluses will be less, but the state will be available her constantly sufficient financial resources for the implementation of its investment program of ambition, what will lead to the growth of two decimal places in the non-oil sector, while keeping inflation firmly in positive territory. 
and increases the risk of such a scenario with the sharp decline in crude oil prices during the last week and the important corrections in equity markets and bond big. If these trends continue -What did not work governments around the world to stimulate domestic demand through more spending Aovernma- it is likely that significant shrinkage occurs lead to further aggravation of the fragile global economic outlook in advance. 
Deflation is defined as a general decline in prices. It generally leads to slowing economic activity, while postponing decisions about consumption and investment (due to waiting families and companies to lower prices in the future) and the failure of larger numbers of borrowers to repay their loans due to the decline in the value of collateral to a level less than the value of the loans. If coupled with a drop in price deflation in asset prices, the impact of the downturn may be devastating because the asset price deflation and help to create a vicious circle of decline in income, investment and consumption. The "Great Depression" which witnessed both Britain and the United States in the seventies of the nineteenth century, and the "Great Depression" that dominated the world in the thirties of the twentieth century, the best two models historic for such a vicious circle. 
've warned us in advance last August to continue to decline in food prices the world may increase the risk of a global recession (see our analysis on monthly economic August 24, 2014). Since then, energy prices fell, adding to global deflationary pressures. In particular, the price of Brent crude fell by more than a quarter since the corn which they relate and in 2014 at a price of $ 113 per barrel by June 19. Overall, global commodity prices fell by 8.3% in the first nine months of 2014, and then declined more than the early month of October, according to the latest indicators of commodity prices, the International Monetary Fund. 
At the same time, saw the stock and bond markets are important corrections. During the month until October 15, benchmark Standard & Poor's 500 American 6.8 percent, and Germany's DAX increased by 12.0%, and Japan's Nikkei rose 6.2%. It seems that these corrections were driven investors shift to long-term bonds to stave off the risk of deflation. As a result, sovereign bond yields fell for ten years by 2.1%, while the decline in revenue in Germany to the lowest level reached historic ratio of less than 0.8%, and fell in Japan for less than 0.5%. Moreover, house prices rose at the slowest speed of the United States during her 20 months in the month of July, according to the S & P Case-Shiller Borz-. The house prices in Britain also show some signs of decline. And clearly, seems to be shrinking global asset spreads across all asset classes. 
what that might mean a global recession for the global economy? First, the euro zone is likely to enter a phase of contraction later this year. It also is likely to lead the decline in commodity prices, coupled with weak economic activity for the second quarter and the large corrections in the prices of stocks and bonds, transfer of core inflation rate recorded in September 2014, which amounted to a rate of 0.3% to a negative rate. The cause in making the European Central Bank for further quantitative easing measures, with the possibility that the purchase of sovereign bonds. 
expected rates of inflation in the United Kingdom and the United States to slow more in the fourth quarter of the year. I've dropped the rate of inflation in Britain to 1.2% in September on an annual basis, the lowest level in five years. The decline in inflation in the United States to 1.7% in August and was negative on a monthly basis. Although the rate of inflation may not turn into a negative rate, but that low inflation will put downward pressure on economic activity, especially if it is combined Btrajat other commodity prices British and American, including house prices. 
Thirdly, will be affected by the World Trade negatively prices drop Goods. This will affect turn negative on emerging markets commodity exporters, as is likely to exacerbate the decline in export earnings from the current economic slowdown, which is due to capital flight following the announcement of the Fed from lowering quantitative easing program in May 2014. 
what can be done to avert a "Great Depression" ? In all of the United States, and now in the euro area, monetary policy proved (including quantitative easing) it is not enough to curb what avoid entering into a deflationary environment. According to the theory of economic thought, is the increase in government spending, the only real tool to combat deflation in order to support domestic demand, which will be able to work on the stability of the price level. However, this will vary with varying evolution and indebtedness of each country separately. In all cases, the failure to accelerate the take appropriate measures will make the chances of a "Great Depression" more likely.