Summary

The US has been in a period of slow economic growth, more restrictive FED policy and government regulations are causing a shift in domestic priorities and resources, placing the US in what Paul described as economic ‘purgatory’. This is set to continue in Q3 with growth being 0%, Q4 forecast is 0.7%. Higher interest rates will continue to last as the FED tackles inflation. Real income growth has been weak, high risk comes from the consumer using credit as a substitute for income. Demand is slowing in parts of the industrial sector, particularly on the equipment side. Dysfunctional economic policies, both US and abroad are a major challenge. Monetary policies have reached their limits insofar as stimulating global growth. Fiscal policies are constrained and will be forced to shift by the Paradox of Debt. China is moving to displace the US in being number 1. However, war between China/US is unlikely in the near future. China believing it owns the Indian Ocean, the travel route necessary to bring oil from the Middle East, could be a source of conflict. A China/India dispute is the more likely next flashpoint for potential conflict, as both battle for the labour market. AI will grow, however hacking will become a major risk, regulating AI will also be a major challenge. This will open an energy debate, where will the energy come from to power AI? Will it be nuclear, nano, carbon, magnetic energy. The imbalance has already developed.

Topics