Is the Next Recession Right Around the Corner?

For those of you dont believe the economics of the world do not affect the western world, think again. They do and its getting worse for the European Union. Mario Draghi, president of the European Central Bank, has been signaling a push to increase inflation, but with 0.2% growth over the last quarter in the European Union, this could signal problems overall.

Interest Rates are up on the cutting block here in the United States, but problems in the Euro-Zone could cause even more problems as most decisions made here originate there. As you may have guessed that problems with the cutting of interest rates, could very well cause economic turmoil of the western front and this could cause backlash for all of us.

What is scary is that the European Central Bank’s rate is already in negative territory and is threatening to push even lower. The stark contrast between the rates of the Federal reserve and the ECB could trigger a new recession here if long term bond are inverted to short term bonds. What is interesting to point out is the President Trump has been saying this is a bad thing for a long time now, but it is just now coming to light.

When countries trade, it is common for both countries to work towards stable currencies and avoid currency trade wars, but when one economic zone is plummeting in rate, it puts enormous pressure for other countries to follow to prevent trade imbalances.

This is just one “canary in the coal-mine”. Does it mean that we are 100% heading towards another recession? No. but it does mean that the more evidence we see, the more likely such a thing, if not worse, will happen in the near future. Banks all over Europe are in danger of going bankrupt and what happens overseas will soon follow here. Its just the law.


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