Tag Archives | stimulus

OBOR demographics May17

China’s changed priorities signal end to stimulus

China’s ‘One Belt, One Road’ project and the need to reduce pollution have replaced “growth at any price” as key government priorities, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Companies and investors are assuming it is “business as usual” in China ahead of the important 19th […]

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US debt Apr17

Debt, demographics set to destroy Trump’s GDP growth dream

Unsurprisingly, Friday’s US GDP report showed Q1 growth was just 0.7%, as the New York Times reported: “The U.S. economy turned in the weakest performance in three years in the January-March quarter as consumers sharply slowed their spending. The result fell far short of President Donald Trump’s ambitious growth targets and underscores the challenges of […]

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Ageing boomers are no longer spending

The Financial Times has kindly printed my letter below, suggesting that President Trump’s focus on tax cuts is misplaced, given the headwinds created for spending and economic growth by today’s ageing US BabyBoomers. Sir, Gillian Tett provides an excellent analysis of the wishful thinking that seems to dominate US economic policy today (“Trump tested as […]

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London housing market hit by Brexit, China’s capital controls

London’s housing market was always going to have a difficult 2017. As I noted 2 years ago, developers were planning 54,000 new luxury homes at prices of £1m+ ($1.25m) in central London, which would mainly start to flood onto the market this year. They weren’t bothered by the fact that only 3900 homes were sold […]

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US GDP Feb17

Monetary policy reaches sell-by date for managing the economy

Monetary policy used to be the main focus for running the economy.  If demand and inflation rose too quickly, then interest rates would be raised to cool things down.  When demand and inflation slowed, interest rates would be reduced to encourage “pent-up demand” to return. After the start of the Financial Crisis, central banks promised […]

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Sevices 2014

Basic Skills, not protectionism, key to sustaining today’s High Income, Services-based economies

Suddenly, manufacturing and protectionism have become political issues across the Western world.  President Trump has already formed a Manufacturing Council with the aim of “reshoring jobs” from outside the USA, and is threatening to introduce import duties of up to 45%. The problem, however, as the chart shows, is that this will not help the people who […]

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Global auto market heads for 5% fall as stimulus impact wanes

2016 data highlights one startling statistic about the world’s Top 7 auto markets.  They are 85% of total world sales and as the chart shows, their overall sales growth since 2007 has been entirely due to China:    China’s sales have risen nearly four-fold since 2007, from 6.3m to 24.2m    Sales in […]

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ICB Jan17

Recession the base case scenario for 2017

It is hard to be optimistic about the outlook for 2017. The good news is that policymakers are finally giving up on the idea that stimulus can somehow return us to the growth levels seen when the Baby Boomers were young.  As the Bank of England note in a new Report:   ”Economic theory suggests that a […]

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Right direction Nov16

Economic policy needs to focus on impact of the 100-year life

Nearly two-thirds of people in the world’s top 25 countries feel their country is heading in the wrong direction, according to a new poll from Ipsos MORI.  As their chart shows: China, Saudi Arabia, India, Argentina, Peru, Canada and Russia are the only countries to record a positive feeling The other 18 are increasingly desperate […]

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Trump’s ’100-day plan’ means an end to “Business as usual”

‘There are none so blind as those who will not see. The most deluded people are those who choose to ignore what they already know’ John Heywood, 1546 “When Aetna ran through post-election expectations, the idea that Donald J. Trump would win the presidency and that Republicans would control both chambers of Congress seemed so […]

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