Dow 4000 by Summer

Evans-Pritchard: Dow 4,000 by Summer

By: Gene J. Koprowski Article

Global trade and economic output are collapsing at rates that outpace the Depression of the 1930s, and "shock and awe" policies are required from the U.S. government to revive global growth, says Daily Telegraph International Business Editor Ambrose Evans-Pritchard.

"This terrifying fall has been concentrated in the last five months. The job slaughter has barely begun," Evans-Pritchard writes. "Social mayhem comes with a 12-month lag."

According to a survey by Merrill Lynch, Taiwan's exports to China fell 55 percent in January, Japan's fell 45 percent. Manufacturing output in the Shanghai region fell 12 percent in January.

"By comparison, industrial output in core-Europe fell 2.8 percent in 1930, 5.1 percent in 1931 and 3.9 percent in 1932," wrote Evans-Pritchard.

The economic situation is dire. But, the visual cues from John Steinbeck's terrifying characterization of Depression-era America have not yet arrived, as workers are not lining up at soup kitchens across the land.

Evans-Pritchard writes that the lowest interest rates in history are failing to gain traction globally.

A flurry of bond issues from the U.S. Treasury is swamping the debt market. The yield on 10-year Treasuries has climbed from 2 percent to 3.04 percent in eight weeks.

"The real cost of money is rising as deflation gathers pace," warns Evans-Pritchard.
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This explains todays RALLY by the DOW-(MARCH 10)
Depression Rally