The Amazing Speed Of The Global World Trade Collapse


Global trade has collapsed like never before in recorded history.

By now we’re all aware that the economy is bad, but it’s sometimes hard to grasp the magnitude of what happened.

Luckily, economist Richard Baldwin at VoxEU has put together an amazing presentation detailing how the wheels came off the global economy.

It shows just how the global collapse unfolded at the speed of light.

How World Trade Collapsed Like Never Before >>>

This is how bad the global trade collapse was -- it was the worst since WWII.

But the velocity of the collapse was even worse. Trade fell faster than even during the Great Depression.

Not even China was spared. Trade plummeted for everybody in unison.

Oddly, even trade for every single type of product collapsed at the same time.

Over hyped 'super spike' commodities, minerals and oil, fell even harder than everything else.

While commodity prices came crashing down, prices for manufactured products actually held the line and were more defensive.

Every developed economy fell by similar amounts due to today's highly integrated global economy.

Yet despite all the flak, the U.S. was the best performing developed major economy.

While world GDP fell just a few per cent, world trade fell far more -- 4.8x as much as GDP did.

The trade collapse was so bad since today many traded products aren't necessities. Thus there was a lot of buying people could cut back on.

The internet caused everyone to panic at exactly the same time.

The West had a financial crisis, everyone else only had a trade crisis. Thus they're much better positioned to recover.

'The suddenness of the 2008 trade drop holds out the hope of an equally sudden recover. If the fear-factor-demand-drop was the driver of the great trade collapse, a confidence-factor-demand-revival could equally drive a rapid restoration of trade to robust growth...

There are clear signs that trade is recovering, and it is absolutely clear that the drop has halted. Will the trade revival continue?...

It is useful nonetheless to think of the global economic crisis as consisting of two very different crises: a banking-and-balance-sheet crisis in the over-indebted advanced nations (especially the US and UK)...

and an expectations-crisis in most of the rest of the world on the other hand.'


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