Lets get real. The world is indeed in a rut. The remedy out of it is going to hurt a lot, especially those who have benefited most from a globalized economy. And they will give us hell before they accept the tarnish. China is probably already in recession for real. The trade war is probably the least of China’s problems but it makes for a convenient scapegoat. Many countries in the developing world fall in one of two groups. It’s either oil & mineral extraction and sales or being the sweatshop of the world. Both depend on a growing world which means they are in a bind. And there are the developed economies which are all on the ropes. Curiously, the Trumpian “smash everything up first” offers one rare glimmer of hope as the US economy will rebound on the wreckage. We suffocate under the mother of all cobwebs and we need some smashing in order to break free.
Data released in January paint a bleak picture of advanced-economy prospects. Even if some emerging economies – which face serious challenges of their own – manage to pick up some of the slack, the world economy will remain encumbered by the combination of economic interconnectedness and political balkanization.