Imminent world recession?

As each day passes, the death of the Eurozone is becoming more and more certain. The situation is becoming dire with some reports stating that Cyprus is closing in for a bailout. Whilst everyone is closely watching Greece and Spain, other parts of the Eurozone are also are also in trouble. The G7 finance ministers are preparing to hold emergency meetings on the issue of the Eurozones and it is time policymakers take bold steps to end this mess. The Germany Chancellor Angela Merkel needs to swallow her pride and play a decisive role.

While some people have been critical to the expansionary interventions need like quantitative easing (QE), a lack of grasp of economics and finance is misleading people into believing that the yersteryear supereconomics which has failed in the current crisis can somehow pull off a miracle and save the world from economic decline. A lot of outcry about how inflationary monetary expansion is have been disproved by the response by the real economy. Bond yields have remained at record low after many bouts of QE. Inflation is not increasing as fast as some who expect in the western economies. What they should be worried about is falling back into another recession (possibly a depression). All the major data such as the PMI and the payroll data are pointing to that. I think the Chinese slowdown should be the clearest indicator of an imminent downturn. With China as the main driver of commodities of recent, their slowdown has already impacted the commodity prices which means countries with incomes heavily depended on commodities such as those of sub-saharan Africa will experience a nasty downturn. The Reserve Bank of Australia recently cut it's interest rates. Other central banks will surely follow suit.