• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

The Most Disturbing Chart From Today's IMF Outlook Revision

Tyler Durden's picture


That the IMF is the most unwavering optimist despite fundamentals, facts and reality has been well-documented over the years. For those who still haven't seen the agency's perpetual upward bias in forecasting world growth, a quick scan of the charts below will cement the understanding that all the Washington-based serial bail-outer of insolvent countries is, is a dispenser of optimism and whose agenda is simply to preserve confidence that all is still well. The charts show how just over the past year's six outlook revisions, the IMF has been forced to downgrade, with quarterly precision, its overly optimistic forecast for virtually every part of the world, from the US, to the Euroarea, to China, and of course, the entire world: the black line is the most recent revision set - it also happens to be the lowest one.

US: expect the US 2014 forecast growth to tumble in the next several revisions - it only took 12 months for the IMF's 2013 US GDP growth forecast to drop from 2.4% to 1.9%. Obviously, the 2013 to 2014 hockeystick is laughable at best.

China: so much for the Great Chinese growth miracle:

Euroarea: over-under on how long until Europe's 2014 growth joins 2012 and 2013 in the negative column?

And the entire world:

None of the charts above are surprising. One needs to simply recall the hilarity that has ensued regarding the IMF's constantly changing forecasts of Greek GDP to know just how pathetic ebullient the Keynesian crew at the IMF is when it comes to foreseeing the future.

However, one chart which deserves particular attention not because it is accurate, but because the rate of deterioration is truly troublesome, is the IMF's view on global trade volume of goods and services. It is here that one can clearly see the disastrous impact of global central bank micro-mismanagement, capital misallocation and central planning. In short: global trade is collapsing - even from the point of view of one of the staunchest macro optimists - at a rate unseen since the Great Financial Crisis, and the Great Depression before it.

It is, or should be, very concerning to the Central Planning brotherhood , that where global trade one short year ago, as per the IMF's April 2012 forecast, was supposed to grow 5.6%, they only see a token 3.6% growth. And the year is not over yet: expect further downward revisions to this key metric as the quarters go by, with the 2014 data point also revised much lower when all is said and done.

Sadly, it is the collapse in global trade that is the most direct testament to the disaster that central planning is: because why trade when one's central bank is there to step in and create the perception of artificial growth, which is not really growth, but merely the dilution of money and the latent onboarding of future runaway inflation. At this pace, quite soon trade growth will halt or even turn negative as countries retrench focused entirely on what their central banks can do for them, instead of engaging in simple economics, comparative advantage and developing their own products and services which should otherwise be competitive on the global arena.

Expect this chart too to be ignored for as long as possible, until corporations once again do what they do best in the new Normal: fire thousands, contract CapEx, and focus entirely on short-term shareholder reward like dividends and stock buybacks, which extract as much value from the future of the enterprise and hand it over here and now, for one simple reason: not even corporate CEOs, CFOs and Treasurers harbor any hope that the long-run will bring any notable improvement.

Then again, in a world in which cash flows, and apparently, trade, no longer matter, and the Fed is backstopping literally every aspect of an otherwise normal and healthy global economy, why worry?

Ben's got it covered. All of it.

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Tue, 04/16/2013 - 15:57 | 3457817 Number 156
Number 156's picture

Thats ok. Prices will be supported by global inflation.

Tue, 04/16/2013 - 15:59 | 3457824 TraitorsHang
TraitorsHang's picture

Damn you! :-)

Tue, 04/16/2013 - 16:03 | 3457856 Ruffcut
Ruffcut's picture

WHen you run out of real cash value, and no credible credit, well it is your time to punt and expect to never ever get the ball back.

Tue, 04/16/2013 - 16:04 | 3457868 knukles
knukles's picture

I particularly liked that everything else is fucked except Japan chart

Tue, 04/16/2013 - 16:09 | 3457893 Poetic injustice
Poetic injustice's picture

Because Japan is fixed and will be leader of global trade? *snicker snicker*

Or will they start selling melting nuclear rods as new business approach?

Tue, 04/16/2013 - 17:32 | 3458231 CrashisOptimistic
CrashisOptimistic's picture

I could make a case for Japan smashing GM and Ford with Toyotas whose prices are cut in half by Yen descent.

The Ford CEO sees it coming, too.

Tue, 04/16/2013 - 21:11 | 3459022 MrSteve
MrSteve's picture

So the price of used Toyotas will rise or fall based on yen / dollar falling? maybe the price of used cars is based on "cost factors"?  used cars sales reps, please speak to the value issue here!! Thank you in advance for your insight, no economist need reply.

Tue, 04/16/2013 - 16:13 | 3457918 outamyeffinway
outamyeffinway's picture

Right, which means they're fucked first.

Tue, 04/16/2013 - 16:18 | 3457934 Stoploss
Stoploss's picture

LOL!!   Obviously a whole lotta opiates around the IMF.

Tue, 04/16/2013 - 18:20 | 3458367 rich_wicks
rich_wicks's picture

IMF is about as reliable as Jim Cramer.

Tue, 04/16/2013 - 18:43 | 3458450 NoDebt
NoDebt's picture

Looks like the chart for gloabal warming.  Yeah, yeah, it's actually been getting cooler for a decade or so now, but just wait!  In a year or two it's gonnna come roaring back and we're all gonna fry!

Wed, 04/17/2013 - 02:17 | 3459754 dunce
dunce's picture

I am not sure which one should feel more insulted by your comparison. The IMF is clearly the most dangerous, Cramer can be easily ignored but the IMF is spending other peoples money with the usual results of no accountability.

Tue, 04/16/2013 - 16:05 | 3457877 Ghordius
Ghordius's picture

many factors in global trade. one of them is China consuming more, as requested by Dr. Krugman and all neoKeynesianists

follow the doc's advice, be a dear... don't behave like eurozoners or barbarians

Tue, 04/16/2013 - 16:30 | 3457993 max2205
max2205's picture

hockey sticks

Tue, 04/16/2013 - 22:15 | 3458379 Lore
Lore's picture

Hockey sticks all around!  These people must be layoffs from the IPCC (Intergovernmental Panel on Climate Change). They failed to heat the planet for the Club of Rome, and they're failing to heat up the economy for the IMF. 

Wed, 04/17/2013 - 04:54 | 3459878 overmedicatedun...
overmedicatedundersexed's picture

Ghordius, I up arrowed your posts, this is like man, un f'n possible...did I change or did you get the message?

trade is 10% if USA's GDP, for that 10% we have risked the 90% of our economy, as we shipped jobs off shore..

NO jobs no income no consumer ..not that hard...but mega banks and NWO need free trade, so the .1% who make $$ on this so called free trade have killed the 90%.

Tue, 04/16/2013 - 16:13 | 3457917 Ghordius
Ghordius's picture

Re "instead ... developing their own products and services which should ... be competitive on the global arena"

do we really have to? is it really an article of faith that every product, every service and every market MUST be globalized? At every cost?

a lot of people suffer because of this faith in global... homogenization

Tue, 04/16/2013 - 17:22 | 3458190 Seer
Seer's picture


Tue, 04/16/2013 - 15:58 | 3457819 TraitorsHang
TraitorsHang's picture

Finally! The first comment!

Tue, 04/16/2013 - 15:59 | 3457840 RSBriggs
RSBriggs's picture


Tue, 04/16/2013 - 16:02 | 3457846 Poetic injustice
Poetic injustice's picture

Not really. Refresh more often.


"Nobody could have seen that coming" moment. 5 years ago I would have believed that, but now I am cynical and I am sure government people knew that, and did not care. World can burn as long as they get pensions.

Tue, 04/16/2013 - 17:34 | 3458240 Seer
Seer's picture

Like people are going to listen to the "govt" people?  Any time truth comes out it's killed (refer to "lobbyists"): Ron Paul (and some others) cared, yet not much happened- it's the System (which is greatly controlled by those with money/power).

There is NO room to maneuver now that growth is dead.  Push anything in one place and some other place will burst.  Such as the time we're entering and will be in probably for as long as we can see.

We'll continue doing what we've always done until it no longer can be done.  That's the basic formula...

Tue, 04/16/2013 - 16:04 | 3457859 Dr. Engali
Dr. Engali's picture

And you wasted it on that?  Actually 156 beat you.

Tue, 04/16/2013 - 16:14 | 3457912 Bearwagon
Bearwagon's picture

What do you mean by that?

Tue, 04/16/2013 - 16:00 | 3457841 Gringo Viejo
Gringo Viejo's picture

Global trade is collapsing hence, the deflation argument...which will be proven incorrect.
Stagflation will be the order of the day.

Tue, 04/16/2013 - 16:07 | 3457887 Number 156
Number 156's picture

Come to think of it, I agree. Stagflation it is.

Once things reach an equilibrium, Money will not move.

Tue, 04/16/2013 - 16:09 | 3457900 Poetic injustice
Poetic injustice's picture

It will not move until legislation will push it forcefully.

Expect more attacks on tax havens and of course, tasty pension fund money sent into right direction.

Tue, 04/16/2013 - 16:22 | 3457958 Number 156
Number 156's picture

If they inflate hard, Expect the central banker reps to make CNBC appearances, so they can come on camera and tell everyone that by evidence of stock prices, everything is butterflies and rainbows.


Tue, 04/16/2013 - 16:14 | 3457924 outamyeffinway
outamyeffinway's picture

I mean, the deflationists are right aren't they? Deflation right after hyperinflation? Gotta have a collapse somewhere....

Tue, 04/16/2013 - 16:28 | 3457982 Number 156
Number 156's picture

Stagflation is actually worse.

It means that not only your price for a cheicken egg is $10.00 each, but nobody is buying them from you either.

Stay hungry my friends.

Tue, 04/16/2013 - 16:48 | 3458074 LawsofPhysics
LawsofPhysics's picture

The Stagflation of the 70's was accompanied by high interest rates, rising wages and eventually an increase in the flux of energy available to humans on earth.  This time is different, rates cannot go up (U.S. and others hard default instantly), energy production has been flat for about 5 years now, and the average wage is declining fast.  This time is indeed different.  As to your comment that no one will want to buy your eggs, I call bullshit, with 7+ billion people (and growing) there will be plenty of bidders on those eggs.  You just won't like the terms.  Long sharecropping...

Sun, 04/21/2013 - 01:32 | 3479523 Number 156
Number 156's picture

Yeah your right. Bad example. food will be in quite a demand. 



Tue, 04/16/2013 - 17:36 | 3458252 Seer
Seer's picture

"Stagflation will be the order of the day."

Which day are we talking about?  How LONG are we talking about?  Since nothing is perpetual, what would be the direction of the move breaking from stagflation?

Tue, 04/16/2013 - 16:04 | 3457860 sgorem
sgorem's picture

after the SHIT-HITS-PROVERBIAL-FAN, a nice clean, sighted in .270 caliber will be my choice in "bagging dear". just sayin.........................

Tue, 04/16/2013 - 16:07 | 3457882 Dr. Engali
Dr. Engali's picture

I prefer a bow, but when I do use a rifle .270 is my caliber of choice . It's also one of the few rounds you can still get at the store.

Tue, 04/16/2013 - 16:14 | 3457920 adr
adr's picture

I think I'm going to try squirrel hunting with .30-06. About the only thing in stock around me.

I'm thinking there will be a satisfying pop.

In my neck of the woods you can only hunt deer with a bow.

Tue, 04/16/2013 - 16:14 | 3457925 Bearwagon
Bearwagon's picture

A bow is a fabulous weapon.

Tue, 04/16/2013 - 16:21 | 3457953 McMolotov
McMolotov's picture

"Assault bows" outlawed in 3...2...1...

Tue, 04/16/2013 - 20:11 | 3458798 MikeMcGspot
MikeMcGspot's picture

No more than 5 arrows per bow. All arrows shall be without fletching, broad heads must be dull.

Tue, 04/16/2013 - 17:38 | 3458255 CrashisOptimistic
CrashisOptimistic's picture

Wire snares hunt small game for you 24/7 and all you have to do is walk to them and look at them, now walk all over the place looking for squirrels.  Check youtube vids for tutorials.

30-06 is like a howitzer to a squirrel.  Shotgun more typical.

Tue, 04/16/2013 - 21:06 | 3459002 MrSteve
MrSteve's picture

a suitable squirrel gun is a .22, shoot 'em in the ear (a preexisting hole) and save the "pelt", also an air rifle or pellet gun will do for any small game and some not so small. Google air rifle and be blown away by 50 caliber buffalo guns, etc. Compressed air is a pretty potent propellant and can be very, very accurate at amazing distance, with a good aiming platform (a little newspeak for you bots out there)

I used to run a trapline when I was younger, thieves were a problem. A muskrat hide for $2.50 generally took a trap a day and 1/4  of an apple hidden in the back of a gallon paint can, along a stream's edge. Victor published books on the life of furbearers to educate trappers on how to use their steel spring traps. Conibear are much better traps now. A pellet pistol is quiet and efficient and humane in close quarters.

Most suburbs now are not really trapping country, so non-rural folks should just pass it by, except for getting air rifles....

Tue, 04/16/2013 - 17:41 | 3458266 Seer
Seer's picture

A twanger!

Those things give me the heebejeebies!  ("bleeder" tips- yikes!)  My doctor doesn't allow me to be around sharp objects.

Tue, 04/16/2013 - 17:38 | 3458263 Seer
Seer's picture

Oh my!  You're out shooting loved ones?

My wife is still expecting our dog to bag deer... if one doesn't pay attention it's going to get leveled.

Tue, 04/16/2013 - 16:04 | 3457871 vote_libertaria...
vote_libertarian_party's picture

Thhhhhhhhe sun 'l come out to-morrow, to-morrow.

Tue, 04/16/2013 - 16:04 | 3457874 ebworthen
ebworthen's picture

Wishful thinking despite reality.

Delusion not optimism.

Tue, 04/16/2013 - 16:09 | 3457894 schatzi
schatzi's picture

Who actually gives a fuck what these IMF reports predict? They always, and I mean fucking always, get revised downwards. Pointless piece of shit, and no, we're not buying into it, so shove you're self-fulfilling prophecy up your backside.

Tue, 04/16/2013 - 16:12 | 3457913 IridiumRebel
IridiumRebel's picture

you could have ended with ass......we would have allowed that

Tue, 04/16/2013 - 17:45 | 3458278 Seer
Seer's picture

Yup.  Must side with the notion of conserving letters/sylables.

Tue, 04/16/2013 - 16:17 | 3457931 Bearwagon
Bearwagon's picture

In real good propaganda, it doesn't matter if you buy into it ....

Tue, 04/16/2013 - 16:16 | 3457932 Ghordius
Ghordius's picture

the IMF is the doctor that might amputate your leg... soon the Asians will have their own version for their own countries, and we might start to compare the relative performance... Nope, I care to know how they prognosticate their client list

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