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Which Way Does the Wind Blow?

Quite by accident, I happened to be rifling through some issues of Paper, Film & Foil CONVERTER from only a few years ago, when I came upon one of my editorials. In the April 1998 issue, the title of my editorial read, “Unpredictability, Volatility Rule.” Though only a coincidence, it seemed so apropos for this very moment in our “developing” world economy. I thought, “How can this be? What is going on here?! It feels like déjà vu all over again!” as the infamous baseball player Yogi Berra would say.

“Unpredictability, Volatility Rule…. What's going on here?! It feels like déjà vu all over again!”

Either not much has changed or we've gone through one entire cycle and are re-entering it again. Or is it growing pains? The difference back then was the US was enjoying for the most part, with a few dips and rises in the Dow, relatively robust growth that continued until recently.

Now the Federal Reserve Board is talking about cutting interest rates for a seventh time this year to head off a recession. Some say that we're in one already. Others say we're headed for a crash. No one likes to hear that kind of talk. But sadly enough, that's the kind of news that gets sensationalized in the media because it's dramatic and gets the readers' attention. After all, it wouldn't be news if it was the same old thing that everyone else was saying, would it? In fairness, still others have told me they are “going gangbusters.”

However, my local Chicago Tribune newspaper's Washington Bureau went so far as to report on July 18: for the first time in decades, analysts said, the chance of a synchronized worldwide recession has become a serious danger. Japan's economy is already in the doldrums, Europe's slow growth could get slower and a financial crisis is threatening Argentina and possibly other nations in Latin America.”

Add to this another report from PCI Films Consulting Ltd. in the U.K. I received a few days ago: “PCI's new report notes that a majority of flexible packaging converters are struggling to generate any adequate return on their shareholder's investments due to a combination of upward price pressures from substrate suppliers and cost-cutting pressure from their end-use customers.” The report draws the conclusion that we have not seen the last of the heavy merger-and-acquisition activity to strengthen buyer and seller positioning.

On a brighter note, Converflex, the Italian trade show held biennially in Milan, reported the best attendance ever in combination with the Graphitalia show. When I was there, I noticed a very slow start to the show, but I've spoken to others who were there on the weekend and they reported the show seemed to pick up.

It's anyone's guess which way the winds of any country's economy will blow.

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