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GeoEconomic Headwinds.

We know Disraeli’s “there are lies, damn lies and statistics”. We¬† know that statistics from the central administration are as manipulted as you would expect from this White House. But Fedex recent quarterly forecasts point to a significant downward revision of the world economies.

This should not be surprising:

– Europe is in disarray. The EU is leaderless, nationally it is collapsing suffering from inadequate investment, and stalling populations. It is experiencing a growing revulsion at the plight of the desperate poor and at the perceived threat of North African refugees. France (Macron at historic low approval levels) Germany (cutting its forecasts and increasingly polarised) Italy (deperately courting China) head the list of disappointing protagonists. And now the Brexit mess looks the straw that could break this camel’s back. Don’t look to Europe for growing markets especially whilst we trash the place politically and economically.

– China is a different case altogether. The next superpower, it is contenet to wait out this administration and determined to win the race to AI, the Internet of Everything, and the next phase of communications. For the moment we are reinforcing its hostility through our trade war. This can only reduce the still remarkable growth rates of this huge nation and exacerbate the inevitable challenges it faces at home. So don’t expect any helpful markets from China. As it is, its OBOR programme has been welcomed by Greece (Pireus) and Italy (Trieste and Genoa) joining the already immense investments described in my note “The Power of Research” 3 weeks ago on Linked In.

Of course the US remains the only self sufficient economy. Its dollar is the world’s currency and we will benefit from a rush to safety as Europe collapses.

But we are building up a headwind that will derail even our strong economy. The Fedex report shows how, at the margin, our best international companies are threatened. elsewhere our statistics look not so good as the published figures show volumes down for manufacturing, freight and residential construction. Afer the terribel droughts and then floods we can in addition expect a spike in the suffering of our farmers.

Wherever you look we are putting our futures and that of the rest of the world on the line and turning awy from mutual trust and help.

Have a good day, James.