The world slows into Recession
Reports have been published by leading economists indicating that the world is slowing into another recession. As many countries are already in a recession, other countries are trailing close behind. Europe is already in recession, China is having its own financial problems and we know the United States is sporting a dismall 2 percent growth rate. The likelihood of the United States falling into a moderate recession are highly probable.

It has been said the United States would suffer negative growth for at least 1 quarter in 2013, if it does not have any policy response it could be slighly longer.

The European Banking Crisis

The problems starts with European banks providing finace for various asian countries including China. The Asians and in particular the Chinese are finding that their biggest export market in Europe is slowing down considerably and its second biggest export market which is Asia itself has been cutoff by European Banks from using credit.

This would only leave the United States and Japan as viable markets for the Asians to head into, this does not provide a robust enviroment for the Asian export markets.

How safe are commodities?

Oil and Copper are two of the biggest traded commodities in the world, both of these have been trading far lower than expected. If the Chinese are unable to boost their economy these kinds of commodities could be seen as risky investments for anybody thinking their money is more safe in commodities than stocks.

As export markets slow all across the world there is very little countries can do, countries like china have halted domestic infrastructure projects due to the current economic climate. Another issue that seems to be holding China back is their rapidly aging population since most families have 4 grandparents, 2 parents and just 1 child. That 1 child would be expected to look after the entire famalie when they reach maturity.

Commodities are being threatened

Raw materials and base metals seem to be most at threat in the commodities market this includes oil, copper are probably the most threatend is coal since the Chinese are producing more domestically, this would have a negative affect on the Australian market who are primary exporters of coal to China.

There would however not be a huge downward spiral in commodities since the Chinese are still big buyers and do keep large stockpiles of commodities locally. Just as the United States keeps its reserves in Gold, reserves in China are held largely in stocks and bonds of other currencies

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