Global economy is cooling rapidly

Exactly what was predicted by Michael Ruppert back in April.  More coming

Commentary: U.S., Europe and China all report weakness in factories

Marketwatch

Rex Nutting

WASHINGTON (MarketWatch) — Markets have been so preoccupied with the austerity theater playing out in Washington and Athens that they almost lost sight of the big picture: the global economy.

Which is cooling off rapidly.

Manufacturing, which had surged coming out of the Great Recession, has now throttled back.

According to the prescient Institute for Supply Management index, the U.S. manufacturing sector was barely growing at all in July, shackled by uncertainty in the political sphere as well as by very weak spending by consumers. Read full story: ISM manufacturing gauge falls to two-year low.

Almost every facet of the nation’s manufacturing deteriorated in July: new orders, employment, production, prices. It was the lowest ISM since the recession officially ended two years ago — and the nearly 10-point plunge in the ISM over the past three months was the kind of move usually seen only during recessions.

But it’s not just America. China’s purchasing managers’ index fell to a two-year low. Europe’s PMI dropped close to 50% — stall speed. Britain’s PMI contracted. Manufacturing activity slowed in India, Russia and Taiwan. Read full story: China manufacturing activity shrinks in July.

The optimists insist that growth is merely settling down to a sustainable pace after a couple of booming years.

Pessimists counter that global growth remains unbalanced and highly uncertain. The financial sector’s still bloated with toxic assets. Corporations are cautious. The developed world — Europe, America and Japan — has little capacity to spend as the painful de-leveraging process inches along.

It could be that everyone has just been sitting on their hands waiting to see how the twin debt crises in Europe and the U.S. would be resolved. In that case, the global economy should maintain momentum, and America’s growth rate should pick up again.

The next few months should test that theory.