My view:
- If the BRICS and the PIGITS were doing particularly well in terms of growth and balances of payment All4One would be absolutely correct. Along that line of logic, Australian exports could fill some voids in the US-China trade.
- There is a problem. Not all the BRICs are doing well. From memory India continues to show growth, China has slowed already, the Russian Rouble is a shocker. Lets move onto the PIGITS. Ireland has stabilised but there remain key debt related structural problems with the Portuguese, Spanish economies, thus making the EU banks far less resilient to what is going on in both Italy and Turkey. The EU banks may have been able to tread water and slowly improve their lot in the absence of any black swans however a US-China trade war is something like a black swan the size of an elephant ….. which may result in economic dominoes falling in multiple countries. I don't believe the EU banks could withstand such an impact ATM. At the very least they will become risk averse as they were post Lehman.
- How can the Sydney real estate market survive this? Does anyone who doesn't own Sydney care? Probably not but it is as it is. Tighter global credit conditions will impact the Australian economy severely and any hiccup in global growth will severely impact our trade. And when Sydney and Melbourne people curb their spending the ASX will be hit hard.
- The reality of a single global economy is beyond the thinking of many.
- Market analysts will be looking for the existence of any Trump policy back door/ exit slide ..... a face saving tangent to de-escalate this. For the moment I can't find any.
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