"The world economy is disturbingly close to stall speed.
The world authorities have run out of ammunition as rates remain stuck at zero.
They have no margin for error as economy falters
Each of the past four US recoveries has been weaker than the last one.
Inventories build up and companies defer spending, tipping over at a certain point into a self-feeding downturn.
Stephen King from HSBC warns that the global authorities have alarmingly few tools to combat the next crunch, given that interest rates are already zero across most of the developed world, debts levels are at or near record highs, and there is little scope for fiscal stimulus.
In a grim report - "The World Economy's Titanic Problem" - he says the US Federal Reserve has had to cut rates by over 500 basis points to right the ship in each of the recessions since the early 1970s. "That kind of traditional stimulus is now completely ruled out. Meanwhile, budget deficits are still uncomfortably large," he said.
The authorities are normally able to replenish their ammunition as recovery gathers steam. This time they are faced with a chronic low-growth malaise - partly due to a global 'savings glut', and increasingly to a slow ageing crisis across most of the Northern hemisphere. The Fed keeps having to defer its first rate rise as expectations fall short.
JP Morgan estimates that the US economy contracted at an rate of 1.1pc in the first quarter, far worse than originally supposed.
...the Chinese economy is in a much deeper downturn than admitted so far by the authorities. It probably contracted outright in the first quarter.
Electricity use has turned negative. Rail freight has been falling at near double-digit rates. What began as a deliberate move by Beijing to choke off a credit bubble has taken on a life of its own, evolving into a primordial balance-sheet purge.
...China accounted for 85pc of all global growth in 2012, 54pc in 2013, and 30pc in 2014. This is likely to fall to 24pc this year. “If there is only one statistic that you need to know in the world right now, this is it,”...
Russia, Brazil, Argentina, and Venezuela are all contracting sharply, casualties of the China-driven commodity bust.
...The last resort may have to be "helicopter money", a radically different form of QE that injects money directly into the veins of economy by funding government spending.
It is a Rubicon that no central bank wishes to cross, though the Bank of Japan is already in up to the knees."