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Ap4i. 27, 2010 &weekly since 1976 Your guide to understanding today 9s economy and fnancial markets Written by Jeff Thredgold, CSP, President, Thredgold Economic Associates Global The overall global economy has returned to a reasonable level of economic growth, led by Asia. Such renewed growth fo..ows the A4st g.oba.
4ecessio0 si0ce just after World War II. Even as overall global growth has returned, it is uneven at best. Asia has returned to robust performance, led by Chi0a, I0dia, a0d Si0gapo4e.
The U.S. has returned to moderate growth, with numerous growth forecasts revised higher in recent weeks. Latin America and Africa are also performing better, while Europe deals with a myriad of issues, leading growth to actually slow in recent months.
Chinese economic growth has 4etu40ed to .ow doub.e- digit annual levels, fueled by a solid rise i0 expo4ts a0d majo4 Asca. stimu.us. Fea4s of overheating, espe - cially in regard to real estate values, have led the government to make it mo4e difAcu.t fo4 peop.e to ... more. less.
pu4chase a0d A0a0ce homes, especially homes bought as invest - ments.<br><br> The central bank is concerned about highe4 i0Batio0 p4essu4es. Indian growth has also returned to mo4e imp4essive .eve.s. I0Batio0 pressures have approached a 10% annual rate, leading the central bank to tighten monetary policy twice in recent months.<br><br> Japan has returned to limited growth in recent quarters, with such growth tied to government stimulus, stronger consumer demand, and rising exports to Asia. Eco0omic g4owth i0 the city-state of Singapore spiked at a 32% seasonally adjusted a00ua. 4ate du4i0g 2010 9s A4st qua4te4 (that 9s 0ot a misp4i0t) .ed by a 139% jump i0 ma0ufactu4i0g.<br><br> Such growth has led to monetary tightening as well. South Korean growth has also returned to a solid pace. Sluggish Europe As usual, the laggard is Europe.<br><br> The su4p4isi0g 4etu40 of modest eu4o-zo0e g4owth du4i0g 2009 9s thi4d qua4te4 0ea4.y ground to a halt in recent months. Rising anxiety about the Greek debt situation has only escalated in recent days, with Sta0da4d & Poo4 9s dow0g4ade of G4eek debt to cju0k d status. Similar anxiety exists as to the quantity and quality of debt issued by Po4tuga.<br><br> (a.so dow0g4aded), Spai0, Ita.y, and Ireland. It remains safe to say that the Maastricht treaty, which sets out borrowing .imits fo4 eu4o-zo0e cou0t4ies, cis faci0g its biggest challenge since its adoption in 1997. d (The New York Times) Massive Stimulus While growth has returned, most 4ecog0ize that it has bee0 associated with massive amounts of money creation and massive government spending, tied to a.most u0p4ecede0ted budget deAcits i0 many countries. Both the International Mo0eta4y Fu0d (IMF) a0d the cG4oup of 20 d 0atio0s (G20) st4o0g.y suggest that such monetary stimulus must be pulled back a0d budget deAcits sha4p.y 4educed.<br><br> Most majo4 0atio0s, i0c.udi0g the U.S., have ta4geted a st4o0g boost i0 expo4ts i0 comi0g yea4s as a majo4 contributor to economic growth. Many nations will be disappointed. The global economy stood at the p4ecipice of dep4essio0 18-20 mo0ths ago&and avoided that fall.<br><br> Aggressive steps 0eeded to 4educe mo0eta4y a0d Asca. stimulus over the next few years will be critical to avoiding that precipice again. To receive the Tea Leaf free via email, sign up at www.thredgold.com Thredgold Economic Associates 1366 S Legend Hills Drive, Suite 150 C.ea4Ae.d, Utah 84015 www.thredgold.com Graphics and layout by Kendall Oliphant Research assistance by Shawn Thredgold c TEA dser TEACHER: Millie, give me a sentence starting with 8I. 9 MILLIE: I is& TEACHER: No, Millie.<br><br> Always say, 8I am. 9 MILLIE: All right&I am the ninth letter of the alphabet. Quarterly economic survey The USA TODAY economic survey of 46 top economists was conducted April 16-21. Median estimates through Q2 2011: USA TODAY " MOnDAY, APrIl 26, 2010 3.1% 3.0%3.0% 3.1%3.1% Q1Q2Q3Q4Q1Q2 Gross domestic product (real annual rate) 2010 2010 10-year T-note yield (quarter end) Consumer price index (rate of change, 12 months ended) Federal funds rate target (quarter end) Consumer spending (real annual rate) Unemployment rate (quarter end) 2010201020112011 3.84% 4.00% 4.10% 4.30% 4.40% 4.55% Actual Q1Q2Q3Q4Q1Q2 2010 20102010201020112011 2.1% 1.9% 1.7% 1.9% 2.0% Actual Q1Q2Q3Q4Q1Q2 2010 20102010201020112011 0.00%0.00%0.00% 0.50% Actual Q1Q2Q3Q4Q1Q2 2010 20102010201020112011 9.7% 9.6% 9.5% 9.4% 9.2% 9.0% Actual Q1Q2Q3Q4Q1Q2 2010 20102010201020112011 2.5%2.5%2.5% 2.6% 2.7% Q2Q3Q4Q1Q2 2010 2010201020112011 3.0% 3.1% 2010 1.00% 1.50% 2.4% Q1 Survey participants: Dean Baker, Center for Economic and Policy Research; Nariman Behravesh, IHS Global Insight; Richard Berner, Morgan Stanley; David Berson, The PMI Group; Jay Brinkmann, Mortgage Bankers Association; Bill Cheney, John Hancock Financial; David Crowe, National Association of Home Builders; J.<br><br> Dewey Daane, Vanderbilt University; Richard DeKaser, Woodley Park Research; Rajeev Dhawan, Georgia State University; William Dunkelberg, National Federation of Independent Business; Michael Englund, Action Economics; Lyle Gramley, Potomac Research Group; Ethan Harris, Bank of America-Merrill Lynch; Maury Harris, UBS; Stuart Hoffman, PNC Financial Sevices Group; David Huether, National Association of Manufacturers; William Hummer, Wayne Hummer Investments; Dana Johnson, Comerica Bank; Paul Kasriel, Northern Trust; Dean Maki, Barclays Capital; Daniel Meckstroth, Manufacturers Alliance/MAPI; Jim Meil, Eaton; Robert Mellman, J.P. Morgan; George Mokrzan, Huntington National Bank; Joel Naroff, Naroff Economic Advisors; Frank Nothaft, Freddie Mac; Donald Ratajczak, Morgan Keegan; Martin Regalia, US Chamber of Commerce; Chris Rupkey, Bank of Tokyo-Mitsubishi UFJ; John Ryding, RDQ Economics; Joshua Shapiro, MFR; Robert Shrouds, DuPont; Allen Sinai, Decision Economics; James Smith, Parsec Financial Management; Sean Snaith, University of Central Florida; Neal Soss, Credit Suisse; Diane Swonk, Mesirow Financial; Jeff Thredgold, Thredgold Economic Associates ; Bart van Ark, The Conference Board; Chris Varvares, Macroeconomic Advisers; Mark Vitner, Wells Fargo; Brian Wesbury, First Trust Advisors; David Wyss, Standard & Poor's; Lawrence Yun, National Association of Realtors; Mark Zandi, Moody's Economy.com