THEworld economy heading towards a deep and inevitable recession, understood in its literal meaning of sub-zero growth. The China – first world economy (in purchasing power parity), e primum movens of growth (as of the virus) – he is no longer alone Key country, now that the contagion has spread to theEurope and to USA. The toolbox of economic monitors has been enriched with photos of NASA satellites watching the pollutants (nitrogen dioxide) in the skies over China. Pollution has greatly reduced with the closure of factories, but that's little consolation. In the rest of the world the fear of the virus – as irrational as you like, see stocking up on toilet paper… – is blocking mobility, schools and events. The sector of services is the most affected, and the consequences on theindustry direct effects on the production of large stretch marks are added supply chains. THE'Italy, unfortunately, is at the forefront, and the minus sign in GDP of this year is certain and among the worst in the world. In the 2009 GDP collapsed, both in Italy (-5,5%) and in Germany (-5,6%), and this time it could be even worse.
A prophetic book by Roger Bootle, “The Death of Inflation” of 1996 has received ample confirmation in the following decades. And today the coronavirus, for various reasons, drives more nails into the coffin of inflation, aided by the oil war. The price of Petroleum (currently at $23/b) is driving lo shale oil American.
I long rates they smell recession and disinflation, and yes drop to record levels: were well under 1% for i T Bonds, had reached -0,70% for i Waist. But now they have risen by a few tens of basis points, following the measures to support the economy announced in America and Europe. The yields of btp instead they had risen sharply (one and a half points compared to the recent lows), mainly due to the renewed fragility of Italian public finances, but now they have fallen again, in countertrend, trusting in the purchases of the ECB. THE real long-term rates they are clearly negative both in the USA and in Germany (-1,2 and -2,1%).
Il dollar, dominated from time to time by the race towards safe-haven assets or by the interest rate differential, is undergoing strong fluctuations, and is now strengthening, following the supportive policies announced. The Bags collapse – two steps back and one step forward – following the impact of the recession/tsunami on corporate profits e the cost of equity risesthat yen it is a safe haven, and it is yuan it is stable at 7 against the dollar.
