The real problems for the global economy

Most published analyses on the global economy focus on the risk of the trade and currency wars, mainly between the United States and China. But we believe the main risks lie elsewhere: The slowdown in global trade, which is curbing growth in all regions, stems mainly from the slowdown in domestic demand and therefore imports in China - not the trade war. China’s weak domestic demand and therefore growth is primarily a result of its transition to another growth model - again, not the trade war. This is a major problem for the global economy; The fact that fiscal and monetary policies remain expansionary in OECD countries at a time when their economies have returned to full employment creates a number of far more serious threats than the trade war in its current state: declining fiscal solvency, asset price bubbles, inability to combat an economic slowdown if one were to occur, inefficient use of savings, impoverishment of future pensioners, etc. We therefore believe there are threats to the global economy that are far more serious than the trade war in its current state.