Article Review #2

This article uses easier vocabulary and is just overall simpler than the last one we read. The main topic discussed was global deflation and how he believes the U.S. is headed for a recession soon. Using China and Brazil as examples of what our fate may look like and as causes to our own future, Stockman discusses the failures of commodity markets and how bubbles years in the making are about to burst and how they have already begun to do so. In the case of China he discusses the overproduction of products that they already produce a large amount of, causing a plummet in prices. Commodity prices have dropped 50% in three years world wide and China's economy is so based on credit and bubbles that the past decade is finally catching up with it. The country's inflation rate is also incredibly high in an attempt to try to devalue the debt that it owes. With the future looking bleak, investors have no reason to try to pump money into the system and just lose it all. This forecast has caused stock market prices drops back here in the U.S. and it only propels the inevitable recession that we're going into soon. A similar issue is also happening in Brazil. With its relatively recent industrialization, its economy relied heavily on exports and boomed. However it peaked very quickly and a ton of new factories opened up and new jobs were available, only to be shut down once the eventual decline came around and the decline has been here for some time now.