U.S. Economy Growth Rises While Crises Hit Elsewhere, Economic and Business Leaders Warn
The U.S. economy likely
will notch second-quarter 2018 economic growth of 4.5-5 percent,
compared to the same quarter a year ago, economist Stephen Moore
recently told more than 1,900 attendees the annual FreedomFest
President Donald Trump for supporting reduced regulation and taxes, said
Moore, who is the Distinguished Visiting Fellow for Economic Growth at
the Heritage Foundation. Now generally also is a “great” time for the
global economy, but not without some exceptions, he added.
“I am very positive about the U.S. economy, Moore said. “We are going to have more freedom and economic empowerment.”
Moore said the escalating trade
conflict between China and the United States ultimately will result in
improved trade terms for American businesses.
“Trump is going to win on trade,” Moore said. “China is going to back down.”
The reality is that China needs to
trade with the United States to avoid a “severe recession,” Moore said. A
key reason for President Trump to insist on “fair trade” is to avoid
continuing theft of the intellectual property of American businesses by
China, he added.
“China does cheat and steal,” Moore said.
Despite other countries, including
Canada and European nations, resisting President Trump’s insistence on
“fair trade” practices, Moore told attendees he did not care whether
other countries like the United States. Instead, Moore said he wants
other countries to “respect” America.
Forbes Sees Trade ‘Skirmishing’
The current trade disagreements
involving the United States and several other countries are at the
“skirmishing stage,” said Steve Forbes, chairman and editor-in-chief of
the Forbes publishing company.
“Don’t call it a trade war yet,” Forbes said.
The Trump administration seems focused on negotiating with trade partners to reduce or ideally eliminate tariffs, Forbes said.
Trade negotiations may “work out,” but the skirmishing also could develop in a trade war, Forbes said.
Even if other nations are hurt more
than the United States by retaliatory tariffs, which effectively become
“sales taxes,” American consumers would face higher prices for any
affected imported goods, Forbes said.
“Who likes paying?” Forbes asked rhetorically.
“If you want to deal with trade
abuses, you want to deal with our allies,” Forbes said. “Japan wants to
be our ally and European countries want to be our allies.
The reality is that 70 years of
friendly relations with allied governments will not be “undone” with a
“few spitballs” amid spirited negotiations, Forbes said.
Despite the tariff threats, the U.S. economy is performing “extremely well,” Forbes said.
Another speaker who shared his views
is Jim Rogers, an international investor who earned millions of dollars
on Wall Street before retiring, traveling the world and moving to
“We are having fewer and fewer allies every day,” Rogers told attendees.
As far as the best places to invest in the world right now, Rogers recommended “Russia.”
Additionally, in the summer of 2018, Rogers said he would rather invest in Asia than the United States.
“I’d rather invest in China, which is down 60% from its all-time high,” Rogers said. However, investors should recognize that China has built up substantial debt in recent years.
“Probably the best investment right
now is in North Korea,” Rogers said. “If I could put a lot of money into
North Korea right now, I would.”
Another reason for favoring
investment in North Korea is that the country has 15 free trade zones,
Rogers said. In addition, Russia has built a new railroad into North
Korea and both Russia and China and building ports there.
Places to consider investing in
Africa include Zimbabwe, which will be having “dramatic changes” under
its new government, and Ethiopia, Rogers said.
Out of Africa?
Cautionary words about the conditions
in certain African nations came from Magette Wade, founder and CEO of
Tiossan, a skin products line based on indigenous Senegalese formulas
South Africa’s new President Cyril Ramaphosa,
who took office in February after in a vote by the National Assembly in
Cape Town, is causing “radical uncertainty,” Wade said. His selection
was not without controversy, since the opposition Economic Freedom
Fighters party walked out of the chamber in protest during the debate
about who should replace former President Jacob Zuma, who resigned amid
accusations of corruption.
“Massive youth unemployment” is
affecting many parts of Africa, said Wade, who added “hundreds of
millions of people cannot find jobs.”
People there who cannot obtain employment often are making harrowing journeys to Europe, Wade said.
“Africa is facing destabilization,” Wade said. The situation is of the “highest moral urgency,” she added.
Venezuela’s Economic Contraction
The dominant story that is gripping South America is the collapse of the economy in Venezuela.
Since 1999, 4 million people have
left Venezuela, said Rodolfo Milani, senior director of the Miami office
of B. Riley Wealth Management. The nation’s economy has contracted by
half in the past three years, he added.
Venezuela’s health care system is in “total collapse,” and 68% of children there are considered malnourished, Milani said.
International pressure is building on Venezuela, Milani told the attendees.
Recent examples include Venezuela’s authoritarian government, led by President Nicolás Maduro, facing
toughened international sanctions. Internal political turmoil is in the
country mounting, along with outright economic contraction.
Another problem is that
government-supported gangs are terrorizing communities, causing further
risk to Venezuelans still living in the country, Milani said.
Even though economic growth is not
occurring in Venezuela, it is taking place in the United States, Europe,
most of Asia and many other places. Despite the current uncertainty
caused by trade tariffs, economic gains are continuing unabated in most
parts of the world.