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dave

Don't predict the future.


In my last post almost 8 months ago I imagined US president Donald Trump would follow up on his rhetoric and begin the shake-up of the US healthcare bill and drug pricing. I also thought he'd stimulate economic growth and drive the fiscal stimulus he promised to expand investment in infrastructure and job creation. So far....

  • Healthcare reform has been stymied by his opponents and members of his own party.

  • Wall Street has seen several record breaking highs.

  • US unemployment is falling.

  • Job creation is robust and inflation low, albeit growth is slow also.

Before cheering the President's agenda, its useful to remember the world banks have supported tremendous amounts of quantitative easing and money printing to boost inflation. This has driven sky rocketing appreciation of any assets with even the smell of potential return i.e. stocks and property.

Europe and China both feeling economic headwinds have begun to recover with growth and exports accelerating. Japan continues Abenomics and growth is positive.

The US President has certainly been US economy friendly - his focus on "America First" has driven car, tech and healthcare companies to announce significant investment at home. So far so Donald....

However the ultimate test of any President is not what they did when winds are favourable but how they perform in a crisis.

President Trump is facing diplomatic challenges overseas which are increasing as North Korea bristles, launching test missiles and the US and the security council fume while the President thunders. The latest rhetoric from two leaders deeply separated from most of the people they purport to represent is more than troubling. It is a test of our time. We should all hope that President Trump and his advisers can negotiate a path that puts not just "America First" but world peace first also. China which is the only nation who can reign in North Korea's paranoia and nuclear ambitions must act more boldly as must Russia. Whatever pressure is required to compel China to act in this regard is now required even at a significant price to China in strategic and geopolitical terms.

The world must watch and wait and hope an industrialist who always gets his own way and a despot who only bows to his own volition can find some common ground through emissaries that allow each to save face and withdraw from megaphone diplomacy which has the world on edge. No matter how one may feel about President Trump or think about his competence or behaviour, we must all hope he can find a way through the morass he finds himself in and has contributed to.

Western civilisation has proven for 70 years it can overcome toxic politics. Let us hope its leaders can do so again.

The year of the Donald is proving more interesting and eventful than even I imagined.


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