HSBC chief economist: World economy is ocean liner without lifeboats

King said in a note to clients that the world economy was like an ocean liner without lifeboats. "If another recession hits, it could be a truly titanic struggle for policymakers."HSBC chief economist Stephen King believes that another recession is just around the corner, Pravda.Ru reports. 

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Whereas previous recoveries have enabled monetary and fiscal policymakers to replenish their ammunition, this recovery - both in the US and elsewhere - has been distinguished by a persistent munitions shortage. This is a major problem. In all recessions since the 1970s, the US Fed funds rate has fallen by a minimum of 5 percentage points. That kind of traditional stimulus is now completely ruled out.

According to King, recovery is nowhere near, because there is a lack of "traditional policy ammunition." Treasury yields have not risen, the budget deficit is not falling, and welfare payments are still on the rise.