How did the world get this way? I don’t mean the oncoming recession, if that is indeed, as it appears, the economy’s fate. How did the payroll statistics ever attain this kind of deference and even religious zeal?

U.S. manufacturing is shrinking, corporate profits are declining and goods are piling up on warehouse shelves. Those trends have elevated concern that a U.S. recession may loom in the next year or two.

Yet in the one area that matters most, the economy has continued to shine: Hiring.

Those two paragraphs are at extreme odds with each other, so much so that they are mutually exclusive. It cannot be both. Forced to choose, the media and economists pick the latter every time no matter how much of the former forces its way into the analysis (and not voluntarily). It makes no sense for today but perhaps more meaningfully it hasn’t meant anything this whole time. Hiring has supposedly been robust all throughout the past two years and still “manufacturing is shrinking, corporate profits are declining and goods are piling up on warehouse shelves.” There can be but unbreakable ideology to the blindness.

That is visited on the other side of this equation, too. By that I mean the financial and what is ailing the global version of related US malaise. Here, too, convention and orthodoxy prevents full recognition in favor of debt, debt and more debt – the very death trap of monetarism.

Beneath the surface of the global financial system lurks a multitrillion-dollar problem that could sap the strength of large economies for years to come.

The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising. China is the biggest source of worry. Some analysts estimate that China’s troubled credit could exceed $5 trillion, a staggering number that is equivalent to half the size of the country’s annual economic output.

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