Must read: Gor on how China cheated the US

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Fabulous piece today from BT’s Vimal Gor who really is a cut above. I agree with every word:

We believe that January will set the tone for the rest of the year: one of disruption to the economic and political order and a resetting of the way the US does business. The end to US hegemony is here and it is being driven internally as President Trump and his team focus solely on the needs of America and step back from self-imposing itself as both role-model and policeman for the globe. For the first time since 2007, global macro markets will react differently to economics and politics in a way that may seem counter-intuitive to what we have seen over the last couple of years. There is a further risk that past correlations between asset classes will weaken further because the baton has been passed from central bankers to politicians, whose reaction functions are difficult to ascertain and change constantly with the political wind. While markets originally feared this switch, they are now embracing it wholeheartedly as the prospect of a move away from the regulatory hell of the last few years to more overt capitalism holds much allure.

In this newsletter I want to look at why voters and markets are rewarding a rejection of the liberal ideals that purport open and frictionless trade as the only way forward. They are demanding a move away from the old guard that defend a political structure (e.g. Europe) that does very little to benefit the people as a whole. This acts as a wealth creating and protection mechanism for the privileged few who have amassed the most wealth over the last 30 years delivered by a playing field that has been solidly tilted their way. The populist voice has been heard and it is positive for economics and markets and therefore we expect this to run much further and much faster.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.