US economic growth is coming to an end?

We are experiencing the longest period of US economic growth in its history, more than 10 years in a row.

With all the domestic political turmoil and trade wars, especially China, the country is still set to grow 2% annually, which for a GDP of nearly 21 trillion dollars is no small feat.

When Mel Lagomasino was asked this question at the GlobalEconomia event, his answer was quick:

“Business cycles don’t die of old people,” they die because there has been some kind of catalyst, however, that kills them.

In fact, the extension of this growth cycle was obtained by new factors that influenced the economy, such as tax reform, reduction of state bureaucracy, increased employment in the country, among other reasons.

In this uncertainty, this celebrated person who dabbles in paper trading suggests a defensive strategy with 3 basic measures:

1-Maintain a higher than normal liquidity (remembering that, in the American economy, investments in the stock market are its major strength or weakness, depending on the moment);

2-Increase the quality of investments.

3-Diversify your investments

Let’s look at other points to see the panorama for 2020.

Commercial War

How can we see some economy numbers in these trade wars?

Even with a deficit of over $ 800 billion in trade in goods, we must remember that the US is no longer primarily an exporter of goods, but rather of financial services, media, transportation and technology, among others.

And under this heading, the US had a $ 243 billion surplus.

The big issue in the “war” with China is, from a commercial point of view, the respect for copyright that the US has to defend, because historically they are not respected in China, and then the Chinese strategy of dominating the world trade with logistics control, which should have occurred by the year 2025, if there had been no limitation of resource inflows as a result of the trade surplus with the US (over $ 400 billion a year until the start of the “war”).

There is, however, a limit to this “war” from which supplies at competitive costs for local industry and services are lacking, which could increase prices both domestically and for exports.

This limit so far is unclear. For now the “war” has slowed China’s economy (28% less exports) and increased taxes on imported goods ($ 128 billion until October).

Next 4 years – Trump proposes?

More tax cuts;

Negative interest rates to stimulate;

Investments and consumption;

Heavy investments in infrastructure;
Conclude trade deal with China.
Carlo Barbieri