Fuse lit on global recession bomb

Friday, 11 March 2022

My base is that a global recession is coming fast. For some time I have been concerned that the giant US inventory rebuild has way overdone it. Here’s wholesale inventories:

This is the result of bogus inflation expectations arising from temporary supply-side disruptions. In other words, over-ordering.

It’s not a problem in and of itself. But, if the US experiences an economic shock that hiccups demand then it becomes a very large problem, very quickly.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.