Advertisement
As America heals its rifts, the clues to policy shifts can be found in market prices
- Policymakers need to bring the Balkanised information process to heel and quietly redistribute wealth. Telltale market signs include Facebook stock underperforming and the Fed buying long bonds
Reading Time:3 minutes
Why you can trust SCMP
6
Investing is looking over the horizon and trying to see what might be next. The very best investors are about 60 per cent right. I wonder how policymakers will respond to the growing schism between the city and the countryside worldwide.
Advertisement
While responses will vary, in the United States, the regulation of misinformation and some form of wealth redistribution seem likely.
The split evident in the US presidential electoral map is mimicked in many countries. The elite in New York and Beijing have more in common with each other than their countrymen in the countryside. This schism is fed by powerful emotion. In a recent poll, 77 per cent of Donald Trump voters believed he won the election.
Compared to these internal rifts, international conflict almost seems like a distraction. Take the US-China trade dispute. The US exports about US$100 billion worth of goods to China.
01:47
China GDP: economy grew by 4.9 per cent in third quarter of 2020
China GDP: economy grew by 4.9 per cent in third quarter of 2020
Given that the US is a US$20 trillion economy, this amounts to just 0.5 per cent of its gross domestic product – even if it manages to double its exports to China, this would have virtually no impact on US growth.
Advertisement
Advertisement