This Global Growth Stuff, China Still Wants A Word

Before there could be “globally synchronized growth”, it had been plain old “global growth”. The former from 2017 appended the term “synchronized” to its latter 2014 forerunner in order to jazz it up. And it needed the additional rhetorical flourish due to the simple fact that in 2015 for all the stated promise of “global growth” it ended up meaning next to nothing in reality.

Oddly the same for 2017’s update heading into 2018 and 2019.

If currency wars are the beggar-thy-neighbor approach to igniting one’s own economy at other’s expense, either “global growth” or “globally synchronized growth” had turned the concept on its ear. “Devaluation” would leave everyone pointing the finger at you for taking from everyone else in order to pick yourself up. Dreams of “global growth” started out with the finger-pointing, only in a more positive if equally unrealistic way.

In other words, both “global growth” and “globally synchronized growth” had meant any specific national economy official would count on the “global economy” to get going and then spin-off local benefits enough to pull whichever local official and their local economy out of trouble.

It was a belated acknowledgment, of sorts, that local “stimulus” plans hadn’t actually panned out. Sure, we said our QE’s and fiscal spending would work here, but, apparently, they didn’t so maybe they worked elsewhere. As the rest of the world gets going again, success could be imported beginning with each export sector (the opposite of currency wars stealing more exports, “global growth” readily contributing them).

Hardly anyone noticed this crafty rearrangement of some really basic theory, still infatuated with fancy “new” QE’s and such. Nowhere was that more evident than 2013 in Japan. Not only the Bank of Japan with its fanciest QE yet, QQE, before it had even begun already Japanese Economists were looking at this rather non-specific “global growth” thing as something like an insurance policy just in case QE10 (as QQE had been) performed about as well as each of the prior nine. From the BoJ:

Overseas economies have been moving out of the deceleration phase that had continued since last year and are gradually heading toward a pick-up. In this situation, exports have stopped decreasing…Exports are expected to pick up mainly against the background that growth rates of overseas economies gradually pick up.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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