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Thursday, December 26, 2019

Trump saved the world



Paul Krugman -- Nobel Prize-winning economist, retired Princeton professor, New York Times columnist, and village idiot -- was not alone in predicting a worldwide recession upon the election of Donald John Trump as president.

3 days after we made Donald John Trump president, Business Insider reported, "One of Trump's major economic policies could lead to a 'global recession.'"

That one policy was the keystone to his economic plan: engaging the trade wars.

Business Insider said, "Trump made the free trade debate one of the central topics of his campaign after criticizing China, Mexico, and Japan. He suggested putting a 45% tariff on Chinese imports, said he would declare China a currency manipulator on his first day in office, proposed taxing imports from Mexico, argued in favor of 'ripping up' trade deals, and called the Trans-Pacific Partnership, or TPP, 'a rape of our country.'

"If Trump were to pursue these policies, Willem Buiter, chief economist at Citi, wrote in a note to clients that it might spark a global trade war, 'which could easily trigger a global recession.'"

The story said researchers at Deutsche Bank warned, "The biggest threat to growth is a possible protectionist turn, which could depress global trade and even trigger trade wars."

And Buiter said, "We stress the potential multipliers of changes in the US position on international trade: the US has been the champion of free trade and open borders for decades. A retreat from globalization by the U.S. would likely lead to reciprocal actions from other countries, and reinforce the latest shift towards de-globalization and could be another nail in the coffin of the liberal global economic world order that has supported prosperity since 1948."

This argument against President Trump's America First policies continued throughout this year. CNBC reported on May 20, 2019, "More tit-for-tat tariffs in the U.S.-China trade war could set the global economy up for a recession, according to Morgan Stanley.

"'If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining $300 billion of imports from China, we see the global economy heading towards recession,' Chetan Ahya, Morgan Stanley’s chief economist and global head of economics, said in a note Monday."

On August 12, 2019, NBC reported, "President Donald Trump's trade war with China is increasing the odds that America will be thrown into a recession, according to investment bank Goldman Sachs."

But once again, the experts were wrong.

President Trump did not kill the world economy. In fact, the opposite happened.

CNBC reported, "Global stock markets have been on a torrid run in 2019, adding more than $17 trillion in total value, according to Deutsche Bank calculations.

"The value of global equities began the year just under $70 trillion but has now surpassed $85 trillion, according to a chart from Deutsche Bank’s Torsten Slok."

That is a 25% increase, which means 2019 was a pretty good year for investors and the global economy.

The story said, "The large climb for world markets has been largely dominated by the U.S. markets, however. The rally in the U.S. has been broad, with the S&P 500, Dow Jones Industrial Average and Russell 2000 all rising more than 20% this year."

Enjoy because the good times will not last forever. They never do.

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