2019 on pessimistic hold.
Germany is moving into recession. Business confidence there is down for the 5th consecutive month at a 7 year low – and worse is to come. The overall economy contracted 0.1% in Q2 and expectations are for a further contraction in Q3.
The wreckless and volatile “US First” trade policies are a serious contributor to this.
However we may well be the winner in the immediate term as the President’s “beggar my neighbour” policies take effect. The US is ever more the go to place to invest and economic success here will shine every day in a better light when compared with the stagnation/recession endured by our former allies.
But there is a price we will pay. Global markets are already in decline so our market opportunity is reducing. A European collapse, now increasingly on the cards will take a direct toll of the US – remember US companies employ more than 1 million in the UK alone – its annual trade with the EU exceeds $1.2 trillion. Losing the sympathy and support of our former allies may well prejudice US influence in EurAsia for generations to come and underpin our future decline compared to China.
As it is our stance is not helping any. Apart from trade we are ignorantly constraining urgently needed global solutions to global problems. The G7 France Conference was an exercise in utter futility – 6 nations waiting out a demented US President in the hope that 2020 will allow them to regroup and resettle around a new President and once again confront the global challenges we all face.
2019 is a year on hold.
Have a good day, James