There are some troubling trends in the global economy today that deserve further attention. You hear me rail about the negative aspects of our trade relationship with China quite regularly. However, I’m no fool, I realize how important China has become to the global economy in recent years as they have been one of the few bright spots. That is why it is disturbing that the much talked about “soft landing” of the Chinese economy looks like its beginning to be not so soft. According to one of my favorite journalists, Ambrose Evans-Pritchard of the Daily Telegraph, reports recently that things are looking bad in China right now. He notes that China is in a deflationary spiral much like Japan was in the 1990’s. When describing the situation he said that ” Loan demand has been falling for months. Banks are offering credit. Companies are refusing to take it. This is the old Japanese story of pushing on a string, or the European story today. ” But wait it gets worse, according to Ambrose China is not the only one in trouble, “All the BRICs need watching. India’s industrial output fell 3.5pc in March. The country seems caught in a 1970s stagflation vice. Brazil has softened too, with car sales down 15pc and industrial production contracting in March. The bad loans of the banks have reached 10.3pc, higher than post-Lehman.” Of course, this all is happening while southern Europe is already in complete melt down right now, could the world be more bad off than now? Unfortunately the answer might become yes because in another article by Ambrose he reports that there is a real chance the US might be headed back into recession. “The US economy has slowed to stall speed. A few lonely forecasters fear that America has already fallen back into recession, replicating the terrible double-dip of 1937.” With all major pillars of the global economy either in a down turn or possibly headed there 2008 could seem like a time of relative prosperity. One must remember that much of the rest of the world outside of the US was not in recession in 2008 which helped to dampen the blows to the global economy. Here are links to both the stories cited World edges closer to deflationary slump, Rising US recession risk poses the real threat to Europe. Note to readers BRIC=Brazil, Russia, India, China.