We need to work together to de-escalate and resolve the current trade disputes and while it is tempting to be a bit depressed about this perspective I am actually hopeful because there is a clear appetite to improve and expand trade I’ll trt world’s editor-at-large cray capitis joins me now from Paris hi Craig so the IMF is again the bearer.
This time it’s saying that risks are building up in the global financial system and that deepening trade wars could tip the situation over the edge so why would tariffs on imports impact the banking sector well President Woodrow Wilson said that any true global peace requires a community.
Of power and that includes in the 21st century a global trade community both of the public and.
Private sector including the banks now what the IMF is saying is that President Trump and other powers and global.
Leaders private and public sector because of brexit inflation the trade wars are undermining this.
And what it boils down to put it in very simple terms that I think every viewer can understand what happens to you if you.
Can’t pay your rent every month you’re thrown out on the street and that’s what the IMF is warning about today everyone has to come together put together some kind of global peace as Woodrow Wilson phrased it and put your house in order yes and we know that investors are getting increasingly worried about emerging economies or countries like Turkey and Argentina now the IMF has warned that around a hundred billion dollars could flow out of those economies in the space of a year which is similar to what we.
Saw in the 2008 financial crisis could we see an emerging markets financial crisis in the near future yes very possible so as the IMF I would agree with them but worried where there’s going to be an even bigger problem on what will trigger it is the.
United States because the IMF is also saying that a recession would slash wealth in the United States by five trillion dollars.
Five trillion dollars that’s a lot of money what the IMF was also pointing out today is the net worth of most g7 economies has turned negative and we’ll get a lot of letters on this let me tell you turkey is not an emerging market economy turkey is a modern economy what they’re really worried about or what we used to call third-world country economies a politically incorrect term to be sure but that’s how they’re being described privately there will be a trickle-down effect or any.
Crash of the United States because that’s where all the equity is and the IMF has also taken aim at the longest bull run on Wall Street’s history we know that Donald Trump has taken credit for that in the market he’s seemingly buoyant about the prospects of the US economy but the IMF says investors are in.
Danger of becoming complacent about the chances of an economic shock is a sudden sell-off or even a crash on the horizon here well you know it’s tough to speculate down that road I want to go again back to what Woodrow.
Wilson said for a global peace for global harmony it requires a community of power that we now do not see power today is not really in guns it’s in money that’s where it is it’s the global economy and with brexit Trump’s trade war the Chinese stealing.