The global auto crash, Germany & China particularly, are...

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alonso

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18/08/19

12:31

Post #: 40028634
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Originally posted by Orson: ↑

Retail sentiment seems to be propping up a fair part of the declining US growth at the moment. Manufacturing is down, parts of the agricultural sector are in danger of collapse (even with the bailouts), and supply chains have been disrupted by both the China and Mexico tensions.

But confident consumers are still unconcerned and, as the OP says, racking up debt. So is Trump. The budget deficit is almost up to 1.2 trillion dollars at a time in the economic cycle where Trump should be trying to balance the budget. Debt is past 22.5 trillion.

I wrote a couple of months ago about the disruption in Mexico/US supply chains being a bridge too far. I think it may have been. After causing trade tensions around the world I assumed Trump would ease off in the 2020 election year and coast through to re-election. But China has dug in, Germany is sliding into recession, the UK economy faces months of disruption and a likely recession, auto sales are down globally...

Things are now in play with the global economy that Trump can't change. It may hit hard in 2020. High levels of household and government debt during the good times will mean there's no buffer or nest egg for the bad times. Dangerous times ahead.

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The global auto crash, Germany & China particularly, are starting to impact oil demand. If the automakers are suffering & stockpiling that means consumers as well as business is buying less.
US heavy truck sales are very hard hit. Don't forget the US farm sector didn't plant I don't know how many million hectares this year because of, no joking, floods and water shortages as well as trade and other things.
There is a convergence of bad events just when nations can handle it least.
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