Citing the uncertainty caused by China dumping U.S. Treasuries, an impending debt ceiling crisis, the upcoming French elections, and more, Wealth Research Group editor Lior Gantz advises investors to make sure their portfolios are diversified.
Each of the last five major U.S. recessions were preceded by a shrinking global trade as a percentage of GDP.
Peak globalization might go down in history as May 7, with the French elections, and it could signal the first major crash since 2008.
We’ve been following closely the euphoric Trump Trade—my personal portfolio is full of Chaos Hedges.
Global trade has declined six times over the past 50 years, and the U.S. entered a recession in five of those periods. The grey areas in the chart above represent recessions.
Global trade has become more than 25% of the $70 trillion in economic growth the world has seen since the 1950s.
Today, trade makes up 50% of world GDP.
This divide between countries benefiting from globalization and those who are exploited has gotten too big, and now this is backfiring on global politics.
The last big dip in trade was in 2009. The Great Recession came next.
The S&P 500 lost almost half its value during the recession, as well as the brutal crash of European and Japanese stocks by 62%, and the Chinese stocks that took a 74% hit.
We have reached peak globalization, and this is a monumental change in the roots of our economy.
Trump Policies Fit with Peak Globalization
Trump is threatening to walk away from free trade deals and place tariffs on imports instead.
The last time the U.S. imposed tariffs on a large scale was in 1930, and it made the Great Depression longer than it should have been.
Tariffs are import taxes, and they shrink the global trade.
We should be on high alert, as peak globalization …read more