Monetary mending is on tap for Europe in the months ahead; and it's not just because of healing anticipated in Brexit's wake. Recently I commented about how negative analysts were getting 'after-the-fact' of over a year and a half of sluggish economic activity in the USA; and longer than that for Europe; and especially for areas like Japan.  

Today we learn that Germany is ready to pump 'Billions of Euros' into an economy that has been struggling a bit; and this surely upsets debt hawks who believe in fiscal constraint; much of which hearkens from a few lessons from Austrian Economics over the past hundred years. 

Nevertheless, the aging of indigenous populations; the resistance to a stunning increase in immigration (often without proper vetting or even training plans for newcomers), and the 'technology transition' I focused on throughout this year as in fact a forecast for the year's pattern (well before more enlightenment here at IFA Berlin), compels policy shifts at the same time (thought so) as economists and analysts finally get very confused about 'why' (other than the trade imbalances while we spar a bit with China) economic stagnation has prevailed.  

So now Berlin (and the IMF realizes this) will 'unbalance their Budget', contrary to tradition, to unlock potential and get things moving. In fact, they might 'even' finally finish and open Brandenburg Airport in 2020 if they put their heart into opening that embarrassing white elephant (I know they neglected Tegel, the primary international facility, for years, in hopes that BER would open before now; as it's an political fiasco).

The economic fiascos will right themselves in a sense because Berlin knows what has happened; because they must work trade matters out with the USA before another storm brews (ideally); and partially since they have taken a lead in EV (Electric Vehicle) technology roll-outs in ways that exceed what's happening (but will) in the US or even China (performance advancements excel here in Germany partially because 'speed' and range matter on the Autobahns).  

Speaking of autos, here in Berlin a number of Chinese EV companies are promoting their approaches; which include AI for urban driving; at least a few 'driving assistants' (often placed like a toy atop dashboards and shaped like a Panda... an approach akin to sticking a navigation screen on top of a dash, rather than integrating it, which was done by a few companies in the past, but really looked like an afterthought); or efforts like WeRide, which has qualified for testing in California. I have asked about NIO (which we shorted and still are skeptical of), and the answer I got from two observers of China, is that it's higher priced and not worth the jump from competitor products. But time will tell as their are so many Chinese EV companies that alone creates 'share' issues.

Let's depart IFA for the moment, and note that PM Boris Johnson lost another effort to get an Election; but while he stated ongoing work for a deal; Parliament is suspended until mid-October; there's no election on the immediate horizon, as much remains 'in suspension' for now.   

And let's note that China's 'agreement' today to buy more Agricultural supply from the United States, might oddly enough be tied to a sudden resignation of John Bolton, who was generally dreaded by negotiating partners as being a staunch hawk (on pretty much everything). That's not to say he didn't contribute a lot to toughening-up at time; but it may be possible that once a decision has been made to mediate standoff positions, he didn't grasp or fall-in-line with new policy decisions (that may relate to China, to Europe, to Russia, to Afghanistan or a host of other issues (let's not forget Venezuela) that are challenging.   

In sum: it's not just because I'm in Germany as I wrap up my travels; but the 'toll' taken on business optimism in the U.S. also relates to the concerns not just with China trade (which likely never reverts to how it was and that's probably essential; while some amelioration is needed) but here in the EU. Pessimism is contagious, as a Poll released today by the Washington Post reveals 60% of Americans expect a recession within a year. Amazing if that means it's actually nearly over.  

Again: my view is this is reactive, given subtle sluggishness prevailing for a long time now; and that whether it's the Fed, the ECB, or private initiatives, it reflects the forecast transition year. Next year we'll see at least a lot of spending on 'economic stimulus' as well as infrastructure to support 5G; which will restrain profits for many companies while the focus is on building networks to support it; but stocks often will grasp a new vision of the future, or perhaps (like markets did before reforms in taxes and capital repatriation and so on) rally to discount the future.  

Bottom line: none of this means we won't have a correction this Fall; but it continues to mitigate prospects of disaster that many economists with linear thinking seem to continue to wrong-headedly anticipate.  

I do believe there are a myriad of risks (and outlined opportunities) as we go forward: including increasing realization that relations with the Chinese will (perhaps never) return to what they were; but not so dire as some suggest. Beijing has a plan to be 60% independent of U.S. technology (especially software and semiconductors) in seven years; so that actually suggests they need to smooth-things-over with us in the interim; even if they know true-trust levels won't return as before.

If anything, on this Anniversary of the terrorist attack on America, the U.S. has remained cozy with the very antagonist countries who were at the core of humiliating or murdering so many of our citizens. That's shameful even though most specific perpetrators have been captured or eliminated. I personally can never forget or entirely forgive; nor do I sense most Americans do either, aside the official stances. For now it is a time for reconciliation (including economics); and let's see if news of this day is a component of that effort.