Analysis: BRICS can defeat Trump’s protectionism
Analysis: BRICS can defeat Trump’s protectionism from The BRICS Post
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TDC Note – The opening statement is directed squarely at Mexico, Venezuela and a number of European nation states – like Germany, Greece and France!
BRICS is no longer in need of proving to the naysayers its sustainability and viability. The time has now come for it to expand its membership and reach among emerging markets.
The world was in the grips of a growing financial crisis when Brazil, Russia, India and China first agreed to form an economic bloc in 2008.
The sub-prime mortgage crisis which began with the Lehman Brothers (the fourth largest investment bank) in the US led to big banks failing, major corporations collapsing and spawned the Eurozone crisis.
When South Africa joined BRIC in 2010, all of the leading global economies were faltering.
It was the US which first resorted to stimulus programs like quantitative easing (QE), buying bonds back and lowering interest rates.
The Eurozone followed a few years later to deal with stagnation (in France and Germany) and recession (in Italy, Greece and others), just as the US began to taper off its stimulus program.
The IMF warned that advanced economies should maintain supportive policies. “In most advanced economies substantial output gaps and below-target inflation suggest that the monetary stance must stay accommodative. Managing high public debt in a low-growth and low-inflation environment remains a key challenge,” the IMF warned in an earlier report.
By the time the US ended its QE, cash-strapped Greece was nearly defaulting on its loans and needed a bailout program while China’s economy slowed down and entered a corrective phase.
It wouldn’t be until 2016 that the IMF started to indicate some semblance of growth in world markets.
But then the UK voted to leave the European Union and market.
Threats to global economy
Both the Europeans and the British are considering worst case scenarios of a no-deal Brexit – which is no longer a far-fetched notion – with some doomsayers predicting that the military will have to intervene to ensure no food shortages.
While this may seem unnecessarily apocalyptic, the disruption to the existing world economic order is all too real.
This is all exacerbated by what seems like US President Donald Trump’s trigger-happy trade war on allies and competitors alike, slowly pulling the global economy into a downward spiral of uncertainty.