Why is Mexico's Growth Slowing?

Didn’t expect that! Mexico first had a worrying growth hiccup in the second quarter of 2018. Now its slowdown is looking real.

Italy fell into an official recession late last year, and Germany’s growth is declining fast. It barely escaped a recession with a minor bounce in the first quarter. Its demographic trends look like Japan’s in the late 1990s. If it weren’t one of the strongest export economies in an over-stimulated global economy, it would already be toast!

The real question is not how Germany will save the EU, but who will save Germany when world trade goes down, which is accelerating ala Heir Trump.

Japan is barely growing, even though its substantial Millennial generation will hit the top of its Spending Wave next year. What happens when that trend turnrns down and the world economy collapses?

It’ll be even darker days in the land of the rising sun, that’s what.

It’s a growing trend…

China keeps slowing and their official numbers can’t possibly be right. You just need to look at basic figures, like electricity use and empty condos, at 22%, to know that. But, of course, they’re stimulating again to “bulk” up for the great trade war.

Rodney and I chatted with Gordon Chang, an expert on all things China, and one of the speakers scheduled for our Irrational Economic Summit later this year, on Tuesday. Among other things, we talked about what China is doing and why they’re fighting this trade war with Trump. We recorded the conversation and will be sharing with Boom & Bust Elite members on Friday. If you’d care to listen in, you’ll find details on how to do that here.

But Mexico?

It just reported negative 0.2% growth in the first quarter of 2019, with March the worst month, down 0.6%.

What?

The U.S., its biggest export partner, is supposed to be growing a bit faster… and Mexico has stronger demographic trends into around 2045. There should be NO reason for slowing there.

There’s only one explanation…

The slowing global trade initiated by Trump’s trade war, and rising debt everywhere, including Mexico and emerging countries.

While Trump’s tax cuts fuel the “Dark Window” blow-off rally, which U.S. and tech stocks will lead, the rest of the world keeps slowing, more than growing…

We’re the last suckers on the stimulus boat to hell!

But China will be the worst hit when the “Reckoning” comes because it is the epicenter of this greatest of all global bubbles, with its massively overbuilt infrastructures and overvalued real estate…

How do you get such overvalued real estate when 22% of it stands empty?

It’s called State-Driven Capitalism.

And economists love it as much as they did Japan’s overbuilt boom into 1989… and Southeast Asia’s overbuilt boom into 1997.

We’re in trouble. All the signs are there, even the ones we’re not looking for, like Mexico’s slowing growth. Make hay while the sun shines through this Dark Window. Then get ready for a wild ride.

Harry