October 4, 2015 Patrick Oliver-Kelley

US Zone

Trump with scissors

Pause, Think, Trump: Our Mighty Woman of the Torch’s tablet reads, “Give me your tired, your poor, your huddled masses yearning to breathe free…I light my lamp beside the open door.”
Rather than limiting immigrants, we should be welcoming them, let them in and let them earn. Europe and North America are among the richest most stable, peaceful places on Earth. We should admit that we have standards of compassion that obligates us morally if not legally, to grant safe harbor to all comers. With Hungary, some elements of Germany and Sweden, channeling their inner Donald Trump, barriers are being erected, as inhumane as they are absurd.

We need fresh, eager people to work; yes, new immigrants! For selfish reasons the welcome mat should be out. Our labor force is ageing and will soon begin to shrink. We need fresh blood to add to the pension contributions to pay the already or about to be retired workers. Clearly screening of immigrants must be done, but again It should be done firmly and correctly and for the correct reasons. Around the world, studies have consistently shown that immigrants are more likely to start businesses than natives, and less likely to commit serious crimes and are net contributors to the public purse. The fear that immigrants will poach jobs or drag down wages is also misplaced. They most often bring complementary skills, ideas and connections. They tend to raise the wages of native born overall. They become more productive and their wages rise accordingly. While monitoring should be stepped up, we need to assimilate, not alienate. Let them in and let them work. Just as America has done in the past, we should dump ‘Trumpism’.

The US is humming along quite nicely. Market levels reflect a much more buoyant economy than actual numbers deserve, however. Consumer spending is weaker than in over a year. Third quarter GDP may be lower than hoped. Though the Fed decided not to raise rates, Fed Chairman Yellen says a rate hike is still likely by year end. She also does not think the US will suffer from a global slowdown in growth and she will wind down stimulus measures.

The IMF said it was alarmed over the slowing on global growth and has encouraged G20 to implement polices to boost growth.

Euro Zone

Europe evaluates its carbon footprint

Manufacturing and services continue slow throughout the zone. Germany is perking up as is the UK, elsewhere in the Zone, things are quiet to gloomy. Despite the slowdown in September however, overall growth numbers are highest since 2011. Germany was perking up until VW, the World’s largest car maker admits it was fiddling the American regulations on emissions requirements. Everything changes, putting its future and a good many others under its banner in unforeseeable directions.

Asia Zone

China’s government has lost credibility having bungled its devaluation of the yuan and by trying to prop up SOEs. Its goals are not clear and its policy is filled with contradictions. Its manufacturing surprisingly hit a six year low, industrial companies are reporting a drop of 8-9% in profits. China also suffered its tenth consecutive decline in trade and is suffering from weak demand generally. Any illusion of a gradual slowdown is gone. The slowdown in China has the potential to significantly dampen demand for oil. US crude has now been in decline for eight consecutive weeks, the longest streak since 1986.

Meanwhile, Japan is flirting with a recession, producer prices are falling and its economy contracted 1.6% annualized. Also of note is the recent laws Japan’s Diet (Congress) passed to allow Japan’s Defense Force to help Americans and its allies even if Japan is not under attack. China is not happy, reminding Japan of its brutality in WWII, but ignores its own (China’s) ambitious efforts in the South China Sea and those of its own revitalized military.

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