The numbers aren’t looking good for international trade. Industrial production, exports, and imports are all falling around the world. While President Trump gets a significant portion of the blame for that from the mainstream media, the fault isn’t entirely his. Yes, tariffs on Chinese and European goods have exacerbated trade disputes and worsened the trade situation, but things were going to get bad anyway.
China’s economy continues to weaken, with rapid growth topping off now that its middle class has finally become relatively sated. Demand for automobiles continues to drop, an indicator that growth is coming to an end, and the Chinese government has panicked and reacted by trying to stimulate the economy through various monetary tricks. But with known debt levels at incredibly high levels and businesses and households heavily invested in risky sectors such as real estate, the Chinese economy is in a bubble that, when it collapses, will bring the country’s economy crashing down.
In fact, the Chinese government is even considering subsidizing the purchase of cars and home appliances, so dire is the economic situation there right now. That has nothing to do with tariffs, and everything to do with a weakening economy.
The US isn’t in much better shape either, with manufacturing continuing to languish and retail stores continuing to close. Europe is being dragged into recession too, with Italy already in recession and Germany, the economic engine of the EU, teetering on the brink. All indications are that the next recession will not only be massive, it will be global in scale. No sector will remain untouched and no investor will remain unscathed.
It’s up to investors to safeguard their assets now while there’s still time, otherwise they risk losing everything in a market crash. By investing in gold they can avoid the worst effects of the crash by keeping their wealth invested in assets that will maintain their value through thick and thin. But time is of the essence, and those who wait too long will inevitably lose out.