Despite a variety of geopolitical issues, the IMF is raising its global GDP projection. This article in MarketWatch talks about it. Critics like Jim Rickards are not impressed as you can see in his Twitter comment here. Below are a couple of excerpts from the MarketWatch article.
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"The global economy is on course for its best performance in several years despite trade tensions and looming geopolitical threats, the International Monetary Fund said ahead of a meeting of world finance chiefs in Washington this week.
Investors are skittish over a potential U.S. standoff with North Korea, France's elections and Washington's fresh use of force in the Middle East and Afghanistan. But global investment, manufacturing and consumer confidence are signaling strength. U.S. growth is projected to accelerate. Europe and Japan are finally showing signs of recovery."
. . . . .
"While the IMF kept its forecast pickup for U.S. growth at 2.3% for the year -- up from 1.6% last year -- it notched higher outlooks for all five of Europe's largest economies. The U.K.'s bump-up was the biggest, a 0.5 percentage point increase to 2% for the year.
In Asia, another dose of government stimulus has pushed China's growth forecast up a tenth of a percentage point to 6.6%, and the fund lifted Japan's outlook by 0.4 percentage point to 1.2%."
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My added comments: One thing about how people perceive economic conditions is that they can vary a lot depending on how things are doing in the area where they live. If you live in areas where the local economy is struggling, you probably tend to think it's the same everywhere. If you live in an area where the economy is doing relatively well, you probably tend to think things are that way everywhere.
As an example, in this area (the Dallas/Ft. Worth area and Texas in general) the economy is holding up pretty well. People are pouring into this area by the thousands from other areas where jobs are less plentiful than they are here. People in this area are seeing gigantic billion dollar plus projects recently completed or in progress such as these:
These are just a few examples. There are many more large projects underway all around this area. The oil company I work for is located in a twin 14 story office building. A few years ago, we are almost the only tenant in the building right after the 2008 crisis. All the building amenities like a gym, restaurant, etc. were closed. The parking garage was nearly empty.
Now, the building is completely full. The parking garage is jammed and a new restaurant has opened. Traffic all over the area is way up, etc. Our company is on track to have a very good year even with oil at $50-$55 because costs of acquisition and production have fallen quite a bit.
In this area, if you tried to convince most people that we are on the verge of some kind of major economic crisis they would think you are crazy because they don't see any signs of that in this part of the world where they live.
What we have tried to do here is to factually document the genuine systemic risks that have been identified by organizations like the IMF and the BIS and other credible experts. The risks do exist and should be taken into account by anyone trying to make personal financial decisions. But so far, these risks have not resulted in the kind of major crisis that could lead to the kind of major monetary system changes we watch for here.
What we will do here is continue to do what we have been doing. Monitor events, document legitimate systemic risks when we find them, and see what actually happens rather than try to predict what will happen (we have seen a lot of predictions fail over the past 3 years). We will also try to review any proposals for major change to the existing monetary system that are made that may have some realistic chance of being tried in the future if a major global crisis ever does unfold.
As we have said for some time now, if we do not get a major crisis any major changes to the existing monetary system are likely to take place gradually over an extended period of time. Under crisis conditions, the changes are likely to speed up considerably. At this time, it is hard to tell what impact (if any) the new Trump Administration may have on monetary system change.
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