Are we heading towards an international economic depression by the end of 2016?

Aren't we already in it?

But to add to your perspective, the entire 2016 looks bleak.

thank  you for your   invitation  I am not sure what will happen in the future  but it seems to me that

now days,  too many countries all over the world are suffering from a lot of so difficult economic problems

thank  you for your   invitation; I'm agree with Lobna Ahmed

Thanks for invitation

I am agreeing with my colleague’s answer  Mr. Vinod 

yes but i believe it will be in 2017 but not for the whole world

Less than a decade ago, the world economy sank into the Great Recession: the deepest and most widespread downturn since the Great Depression of the 1920s and '30s. Since the stock market crashed in 2008, recovery has been long and slow, marked by persistent bumps in the road along the way. Nonetheless, an economic recovery has, indeed, taken place. The S&P 500 index rose more than 92% over the past five years until market volatility kicked in during the second half of 2015. So far in 2016, the S&P 500 is down almost 9% since the start of the year. U.S. unemployment has dropped from nearly 10% at the height of the Great Recession to 4.9% today.

A lot of this apparent growth, however, has been fueled by government bailouts, loose monetary policy and huge injections of capital in the form of quantitative easing. The problem is that expansion cannot continue forever, fueled only by cheap money and central bank support. Ultimately, the underlying fundamentals of an economy must catch up with the stimulus to create real growth. Because the real economy has lagged in many ways, it might be the case that we are on the verge of another global recession. Here are some signs that a recession may be on the horizon.

The European Situation

The sovereign debt crisis that followed the Great Recession in Europe has been a persistent issue, and Europe represents a significant part of the world economy. The European Central Bank (ECB) has also taken the extraordinary measure of implementing quantitative easing in the Eurozone to stimulate growth. The so-called PIIGS nations (Portugal, Ireland, Italy, Greece & Spain) have been bailed out repeatedly by the European Union and the IMF, with mandatory austerity measures imposed on their populations. Not only has austerity been unpopular, such measures may have also restricted growth by reducing aggregate demand and keeping the debt burdens in these nations high.

The worst of the PIIGS has been Greece, which defaulted on an IMF loan in 2015. The Greeks had elected an anti-austerity government which called a popular referendum, rejecting EU bailout terms and calling for an end to austerity. Even though Greece itself represents a relatively small portion of the Eurozone, the fear is that if Greece leaves the European common currency (the so-called Grexit), other PIIGS countries will follow and contagion will spread, putting an end to the euro experiment. A collapse of the euro would have widespread negative consequences for the world economy, perhaps bringing on recessions.

The Chinese Bubble Has Begun to Pop

The Chinese economy has grown by an extraordinary amount over the past few decades. Chinese GDP is second in the world only to the United States, and many economists believe that it is only a matter of time before China will overtake the United States.

 

China's government, however, imposes capital controls in order to keep its money within its borders. Therefore, as the Chinese middle class has grown, they have few options when it comes to investing their new wealth. As a result, Chinese stocks and real estate, two of the places where Chinese people can invest, became increasingly expensive, with the hallmarks of a bubble forming. At one point last year, the Chinese stock market had an average P/E ratio higher than the rest of the world's, with the Chinese technology sector showing bubble-like valuations of more than 220 times earnings on average. To put that in perspective, the tech-heavy NASDAQ market had an average P/E of 150 times before the dot-com bubble burst. The Chinese stock markets have been experiencing a correction, with the government taking such cautionary measures as curbing short selling. Most recently, in an attempt to curb volatility, China implemented circuit breakers that would halt all trading on the country's stock exchanges if losses fell to 7%.

Meanwhile, the real estate boom has led to overproduction of building resulting in so-called ghost cities, entire urban landscapes where nobody lives. When the market sees that the oversupply cannot meet demand, prices may collapse in the Chinese housing market.

If the Chinese economy slips into recession, it is likely to drag down the rest of the world as well.

A Debt Problem Growing in Student Loans

The debt crisis that accompanied the Great Recession had a lot to do with the burden of home mortgages that were issued to people who simply could not pay them back and bundled into securities called collateralized debt obligations (CDO) and sold to investors with an illusory 'A'-credit rating. Today, something similar seems to be going on in the student loan market.

The U.S. government backs nearly all student loans, so ratings agencies pin a high credit rating to these debts, even though a student may not have the ability to repay. Right now, the government is on the hook for over $1.2 trillion in outstanding student loans that need to be paid back. To put that in perspective, Australia's GDP in 2014 was only $852 billion.

Not only could a wave of defaults impede the U.S. treasury's ability to function properly, but student loan burdens prevent young people from engaging in other economic activity such as buying homes and cars.

The Unemployment Picture is not as Rosy as it Seems

The U.S. unemployment rate fell to 4.9% in January, the lowest level since the crisis began. But that so-called headline unemployment rate does not include discouraged workers who have taken on temporary or part-time work to make ends meet. When accounting for that part of population (called the U6 unemployment figure), the unemployment rate jumps to 10.5%. There has been a steady decline in the labor force participation rate, which measures how many people in the potential workforce are actually working, to levels not seen since the 1970s. Since even the U6 unemployment rate accounts for those in the workforce, the actual unemployment rate when accounting for the declines in the workforce participation rate is much higher.

Even for those working, the real wage has remained fairly stagnant. The real wage accounts for the effects of inflation, and a stagnant real wage can indicate a weak economy that isn't showing real economic growth.

Central Banks Have Little Room to Work With

Central banks typically employ loose, or expansionary monetary policy to stimulate an economy when it appears to be slowing down. They do this by lowering interest rates, engaging in open market operations, or through quantitative easing. Since interest rates are already near-zero, with some European countries even deploying a negative interest rate policy (NIRP), that policy tool is no longer effective for banks to use to stave off the next downturn. Meanwhile, quantitative easing and the buying of government assets has already ballooned central bank balance sheets to unprecedented levels. Again, central banks will see their hands tied in trying to avert a recession.

Economic Data Shows Patterns Similar to Right Before the Last Recession

Aside from the "stories" unfolding in the global economy above, some finer economic data is beginning to show some eerily similar patterns that have predicted recessions in the past:

• Retail Sales have dropped the most since before the last recession. The same is true with wholesale sales.
• U.S. factory orders fell in December of 2015 by the most in a year, according to the Commerce Department.
• Real U.S. GDP growth is slowing.
• U.S. export growth has been weakening.
• Corporate profits are declining.

The Bottom Line

We may be on the verge of another global recession. Patterns in economic data are showing signs of weakness, and the troubles persisting in Europe or the bubble bursting in China may be the trigger that sends the economy over the edge. Unlike in 2008, when central banks were able to lower interest rates and expand their balance sheets, central banks now have much less elbow room to enact loose monetary policy to prevent a recession from happening. Recessions are a normal part of the macroeconomic cycles that the world experiences, and happen from time to time. The last recession was already seven years ago. Signs may show that the next is right around the corner.

yes

Based onThe fundamentals of the global economy in a state of continual deterioration since the previous financial crisisMethod of intervention by governments and central banks to rescue financial institutions and large companies did not address the structural imbalances that led to crisisAny crisis the global economy is facing now will not find a quick or easy solutionsA serious downturn in the economy

Expect a real sharp decline in the Chinese economyThe impact of lower oil pricesRaise interest rates in the United States recently, in light of stiffness recovery of the US economy overshadowed the prospects for global economic growth, especially with the legacy of increase in the US dollar, which threatens the growth rates of the global economy is modest given the location of the dollar in the global balance of trade

Those who are aware and ready stand a chance of survival and prosperity, but those who don't read the signs might be surprised in negative ways. Studying the global economic indicators since the last economic crisis of 2008 till today, I see a snowball standing on a tip of a mountain moving towards a downfall. The purpose of my article is to point towards this falling snowball and asking people to be prepared. Since Nixon took off the US dollar off the gold standard in 1971, and with the dependency of most economies on the US$ as a national reserve currency, signals of the US economy reflect on all other economies tied to the US$. That's why I'll share some facts about the US economy which I will use as economic indicators that reflects to all other economies tied to the US dollar.Facts about the US economy:The US national debt has gone up from US$9.67 in 20081st Quarter to US$18.2 today.The US national debt to GDP (Gross Domestic Product) ratio has gone up from 64% in 20073rd Quarter to 102% today.The US Federal Quantitative Easing (Printing money out of thin air) has gone up from US$ 1 trillion in 2007 Q3 to US$4.48 trillion today.The Stock market indices (US & others) have been in a growing bubble since the quantitative easing started in the US in Q12008 till they reached an all time high of mid 2015. The US dollar lost 97% of its value since the great depression of 1930 till today. Unemployment rate in the US is estimated to be 24-30% according to non-mainstream economic research.Facts about other economies:The Chinese stock market bubble (the second largest economy after the US) started bursting in July 2015 loosing around 42% since then till today.The Chinese real estate bubble started bursting with the stock market meltdown in China since July 2015 (Check Chinese so called ghost cities)China and the US have been engaged in a devaluation currency war since August 2015 till today with the Chinese devaluation of its currency (Renminbi / Yuan)The analysis I'm about to share now is not just my personal analysis, but that shared by world renown economists like Peter Schiff, Hary Dent, Martin Armstrong, Thom Hartman, Gerald Celente, Robert Kiyosaki, Joel Skousen, Jim Rickards, Ray Dalio among others. A global economic crisis is expected to come in the near foreseen future (end of 2016 / beginning of 2017). We've already started experiencing the first signals of this recession with the facts I shared above. The stock market indices bubbles are expected to burst together with the real estate bubbles. The aftermath of such recession will lead to a great devaluation of the US dollar, together with all currencies tied to the US dollar, followed by a hyper inflation. The purchasing power of currency will go down dramatically through this hyper inflation. Many jobs are likely to be cut, banks are expected to face run downs and most of the wealth stored in Fiat (paper) money is expected to lose its value. An economic reset it expected to happen.