Earlier this month, many of our clients attended a event where our special guest, Jonathan Pain, shared his expert insights into the current state of the global economy and the potential impacts on investments in the near future.
Jonathan Pain is the author and publisher of a widely read investment newsletter, The Pain Report, which provides an independent and global perspective of the financial markets and the world economy. He is well known for his contrarian views, and is a regular guest on CNBC TV. He brings to life the history, current and future outlook of the world from an economic perspective.
During the presentation at the Treysta event, Jonathan gave an optimistic review of the different economies across the world. He mentioned that despite the questionable political antics, the US economy is in pretty good shape, with full employment and strong growth. He believes the Federal Reserve will hike rates 4 times in 2018. He is also concerned about the effects of the newly introduced trade tariffs.
In Europe, Jonathan stated that there is evidence that economic growth stimuli are starting to gain traction and Eurozone GDP should be above 2.5% in 2018. He also raised concerns that the German economy could be overheating.
Jonathan gave insights into China’s situation where he stated that the rise of the middle classes are “the most significant and defining economic phenomenon of our life time”. He predicts slower economic growth for China in 2018 at around 5-6%. He also mentioned that the rest of Asia is an awakening “sleeping giant” and “we aint seen nothing yet”.
For Australia, Jonathan stated that we will continue to see strong employment growth but stagnant wages. Interest rates are likely to remain on hold for the foreseeable future. Additionally, there will be a slowdown in housing but an increase in infrastructure investment. He mentioned that Australia still has very attractive investment opportunities.
In closing Jonathan summarised his thoughts as:
- Global economy, best we’ve seen in a long time
- Monetary policy normalisation and an inflection point in inflation
- Trump-Kim Summit in May…amazing news!
What a Wonderful World!