Your Portfolio Design: Assume the Fetal Position
By John Mauldin
- The June 23 “Brexit” vote in the UK
- US elections on November 7
- German elections in mid-2017.
- Merkel may have successfully papered over the Greek debt problem, but she won’t be so lucky with much larger Italy. The banking system there is completely unsustainable. (George and I have shared notes and discussions on this topic. The picture in Italy is much more serious than the mainstream media is portraying).
- The refugee crisis is going to get worse before it gets better, and frictions will likely strengthen Germany’s right-wing and nativist political parties. Presently they are no threat to Merkel’s leadership but could well become so after 2017 elections.
- A renewed NATO Cold War against Russia is forcing Germany to increase defense spending and devote more attention to foreign policy at the precise time it really needs to get its home situation straight.
- As pessimistic as George was on Eurasia, he was almost equally positive on the New World. He thinks the Canada/US/Mexico trade zone is the world’s economic center of gravity. No one else has the same combination of domestic demand, technology, innovation, innovation, and political stability. Yes, we have problems, not least of which is the massive debt we accrued in the course of reaching this dominant position. Other than Brazil (and the distressingly sad case of Venezuela), however, the Americas are in far better shape than Europe, Asia, or Africa.