“We are now just over two months into that oft-dreaded year of 2012, and the economic and financial projections/assumptions by public and private institutions across the world have noticeably worsened. These are the same institutions (i.e. politicians, bureaucrats and executives) that have everything to lose by painting an accurate portrait of their position in the global economy, so it’s an extremely safe bet that they are still over-estimating their prospects. Nevertheless, the fact that their inflated, yet worsening projections completely destroy the myth of an economic recovery is telling.
The Chinese government just lowered its 2012 growth projection to 7.5%, which is the lowest it has been since 2004. As Ilargi recently noted here, that lowered projection itself is based on assumptions of stabilized exports, rising domestic consumption and no “hard landing” from the collapse of its unprecedented property/infrastructure bubble. Once we factor all of those things in, along with a potential 150% public debt/GDP ratio in 2011, the one and only remaining driver of the global growth story becomes much more of a liability than a boon.
Moving on to Europe….”
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