Here we are at the first of September with situations—plural—that were unimaginable when we celebrated New Year’s Day 2020. Let the political fools play their games. Let those with “crucial” social issues shout as loudly since they have no desire to think about what they are saying. Let the people who think that they have the right answers to all questions babble on.
We have much more serious issues that need our concern.
The global economy was entering a dead zone long before 2020. In 2010, global gross domestic product growth was 4 percent. The world had been growing between 3.5 and 4 percent a year back to the 1980s. Since 2010, the average growth rate is about 2.5 percent or about 25 percent lower. That is a big deal.
Note this well: 60 percent of global GDP comes from international trade.
This might hurt the feelings of some dedicated China apologists but in 2006 that economy grew at 14 percent. Now those same “China Cheerleaders” are super excited at the 2020 growth prospect of 4 percent. The “AmBoys” are not doing much better. The US economy has been in a decline since the 1984 seven percent growth rate and 4.5 percent growth in 1998.
Putting together the global central banks doing all they can for the “rich,” the idea that “free money” creates productive investment, and the pandemic, we see a disaster movie. Actually the pandemic has a “silver lining” since it can be blamed for the terrible results from the first two factors.
China has done its best to not be a part of the rest of the world’s central bank failures. They decided to try their own methods of failure. “Getting Rich” from building “ghost cities” seemed like a good idea at the time. But the people expected that would continue forever. It did not. Also, the “Chinese Starlet” assumed her “USA [and European] Sugar Daddy” would continue paying the bills forever. The USA “wife” found out her IPhone was paying for the mistress’s breast enhancement.
But nearly every country since World War 2 has looked for its own “Sugar Daddy.” Nippon-koku or “State of Japan” became “Japan Inc.” selling to the US, as did South Korea and Taiwan. Of Germany’s 2019 trade surplus of $225 billion, 70 percent was with the US, the UK, and France. Vietnam recorded a trade surplus of $11 billion in 2019 of which $10.4 billion was with the US.
For decades, the Philippines has been scorned by the “experts” for not having a trade surplus Sugar Daddy, instead relying on domestic/household consumption for growth. Look at the percentage of GDP growth from domestic spending: Germany-
52 percent, South Korea-48 percent, China-38 percent, Vietnam-68 percent, and Thailand-49 percent.
Philippine economic growth is fueled 73 percent by domestic/household consumption. Again, 60 percent of global GDP comes from international trade with large wealth transfer from the Sugar Daddies to the “Starlets.” The Philippines is in much better condition to improve its economy faster with one great caution, that being remittances.
OFW remittances recovered in June with 7.7 percent growth. Pray for that trend to continue. Now let’s read the BusinessMirror issue on August 31, 2020: “Uniteller Philippines President Noel Fernando Cristal said the expected decline in remittances this year should prompt overseas Filipino workers to create a long-term strategy that may not involve labor migration. In the longer term, Filipinos may have to look for alternative sources of finance beyond economic labor migration.”
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