Global Economy Slowdown

Global Economy Slowdown

The British Pound has hit a two year low. It has shrunk to its lowest level against the dollar and also gone down against the Euro.

Speculation over an early snap poll is rife. Budgets planning with forward public spending are being rushed through during the Parliamentary recess, to prepare as soon as possible,for a General Election,the day after Britain exits the EU on 31 October 2019, or 84 days from now. 

This is not my prediction,but what the papers say?

Research at Bank of England have long asserted that the UK economic growth will remain modest. Its modest Canadian born Governor, Mark Carney has been asked to stay on temporarily when his terms ends soon. Perhaps,a Canadian hand is better than an English hand it seems to calm the jitters?

The UK projected growth rate is at 1.4 % in 2019 and estimated at 1.3 in 2020. As compared with its long term trend rate of around 2%, is also the Customer Price Inflation rate which can trigger the Bank rate.

Plans ahead of Brexit  

With  a"no deal" stockpiling of goods, a spate of betting shop closures, bank staff redundancies, a very real recession seems looming?

Prime Minister, Boris Johnson is all up-smart,upmarket,upbeat - the typically Etonian, true blue, "stiff upper lip".

Of course,he has repeatedly refused to rule out an early election?

Who wouldn't in his position with a so called "majority of one" in Parliament's HoC?

But, if you ask me, it is all posturing?

He has the polls and the public also upbeat

"You Gov" poll stated the attraction of a snap election due to his tough stance on Brexit, has paid an early dividend. But we need to wait for the postman?

Boris is to inject £1.8 billion into the NHS as part of his pledge to upgrade 20 hospitals across UK, even though experts have warned that the money may not be enough for the promised upgrades. However,the money is to be made available immediately. 

Nobody knows where the money will come from, but that is Boris' "feel good factor" to end Theresa May's austerity.

What is happening in China?

With all the unrest in Hong Kong, China is also having a re-think in the slow down of its growth.

China's economic growth is expected to slow down to 6.2% - a near 30 year low according to a new Reuters poll.

Rising trade tensions with the US have pushed the Chinese government to step in with its economic stimulus efforts in an attempt to boost growth.

President Trump raised tariffs on $200 billion of Chinese exports in May 2019.

China is not sitting pretty on its back, waiting for the world to deliver?

During this week on  August 7,2019, a falling Yuan helped China mitigate,if not entirely offset the US tariffs by making its exports cheaper?

Chinese currency reached its lowest level in more than a decade going lower than 7 Yuan to the Dollar.                                     

                                         

This move was claimed as retaliatory, but it came as a response to President Trump's surprise announcement on August 1,2019, that he would impose a 10% tariff on $300 billion  in additional tariffs, on Chinese imports starting on September 1,2019.

Tit for tat, the US Treasury Department stated,it considered China to be a "currency manipulator". 

China is not looking for what US does?

It is already making an effort to replace foreign imports with domestic production. The more things get ratcheted, the more China can accommodate, as it's population will be made to work, not that they now sit on their laurels?

Economic Impact on the United States  

"While manufacturing is not the economy, it plays a huge role in the business cycle of its volatility."

Cut backs in household spending on durable goods, is the cause of any downturn?

The United States has the might of its power. 

The Federal Reserve will keep on cutting interest rates, thanks again to the Trade War? 

Stock prices and commodity prices are all down sharply, not over the year, but over the past week in the U.S. 

The slowing down in China and Europe, the dwindling impact of fiscal stimulus, manufacturing weakness all pose risks to the US economy. This is all the more reason to keep lowering interest rates, many say? Others look to next year's Presidential Election?

How about India?

In the past week, if not days, India too is in the hot spot. The annexation of Kashmir and Jammu is not without reason?

"When America sneezes, India gets a cold,." was told to me by my teacher at Aquinas, Prof. Srinivasan 64 years ago.

I realise this more now, than then. There appears to be a hidden agenda in the West to mitigate its problems and lay the blame on the East? 

Narendra Modi's India, is growing faster than China. The rate of growth is over 7 %.                     

                                              

It seems natural to scratch its neighbour, Pakistan, to show its military strength?

The sages, the soothsayers, the pundits will tell you different? 

It has nothing to do with India or with Modi, it has everything to do with the position of the constellations, of the planet,Uranus, which is having its effect from Deep Space on  Earth?

How true?

Small wonder our politicians in  Sri Lanka, run to Andhra to get the protection of the Gods and they return home cleansed?

Can we, a small island appease the Gods?

Victor Cherubim