THE GLOBAL TIPPING POINT MAY BE JUST A FEW MONTHS AWAY
Despite the encouraging U.S. jobs-report data last week, the fiscal situation in the United States and most of the rest of the world continues to deteriorate.
The European Central Bank said the eurozone's economy is likely to contract this year. Greece finally formally defaulted last week. The situation continues to get worse, and many observers think Greece will need another bailout within a year. The next time, the world's taxpayers, rather than private banks, will be holding the bag. The situation in Portugal also is getting worse at an accelerating rate.
It's not just the US and Europe that are having problems. Last week, the Chinese reduced their expected growth rate from 8.2 percent to 7.5 percent for 2012. There has been growing political deadlock in India, stopping many reforms, which will negatively impact economic growth. There are indications that Brazil also may be facing an economic slowdown.
A tipping point for the entire global economy may be on the near horizon.
