We are in a global recession. Latin America’s largest economy, Brazil, is in a recession. The Brazilian real is .25 to the U.S. dollar. Their debt rating is junk status. Their economy is contracting at its fastest rate since the 1930s. Their inflation is above 10 percent.

Russia is in a recession, with their ruble at .013 to the U.S. dollar. Venezuela is running a 200 percent inflation rate and their Bolivar is .16 to the U.S. dollar.

Saudi Arabia needs oil to be at least $100 a barrel to break even with its budget. Since oil is down to $31 a barrel, they have announced an “austerity” budget. They are also planning to sell a stake in their state-owned oil company, Aramco. The Saudi Arabia riyal is .27 to the U.S. dollar.

The Japanese Yen is trading at .0085 to one U.S. dollar. Speaking of falling prices, in 2007 iron ore was $200 a metric ton. Now it’s at $47. Europe’s 10-year bonds’ cash back is less than you loaned them.

The Chinese economy is slowing because their borrowing rate was at a debt-to-gross-domestic-product ratio of 208 percent. China’s purchasing managing index — anything less than 50 is a recession — was 48.2. It was also the 10th straight month decline in Chinese manufacturing. (Here in America, the Chicago Purchasing Managing Index is 42.9)

Globally, in 2015, bitcoin was the best performing currency. (No one else comes close.) Except for 2014, bitcoin was the best performing currency in the last 5 years.

So what does everyone do? Most people flood the Market of Exchange Traded Funds thinking this is a safe area, and here in Maine, socialists advocate increasing our minimum wage pretending there is no global economic downturn. It’s pure insanity.

Douglas Papa

Hallowell


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