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.”…………
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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