Inflation, the economy, China, and Canada
One of my favorite speakers at industry conferences is Alan Beaulieu of ITR Outlook; he regularly presents to groups like the National Fluid Power Association and Power Transmission Distributors Association. ITR’s angle is strictly on policy, economics, and demographic trends, not politics. That’s not to say that he doesn’t sometimes anger folks in the audience on both sides of the spectrum, but I appreciate him staying out of the mudslinging and just talking data.
Earlier this year, Beaulieu spoke to the NFPA, and some of his comments are worth keeping in mind over the next few years. Here are four areas to watch.
- 2019 was part of what he calls the “great before,” … and you’re never going to see something like it again. We are now simply living with inflation. While inflation is decreasing, commodity prices have declined — but other input costs have not. He also said that if you want to buy a business, make sure to do it by 2025. After 2025, he explained that interest rates will likely go up for the rest of the decade.
- Much of the U.S.’s position on the China/Taiwan situation has to do with the fact that Taiwan produces a lot of the military’s chips. China attacking Taiwan would almost necessitate a military response at this point. But if Taiwan falls after 2027, when some of the chip situation is solved, Beaulieu thinks the State Department may feel we won’t have to do anything about it.
- For those who say that we “can’t know” about the coming Great Depression (which Beaulieu has long predicted for the 2030s, based on demographic trends and Baby Boomers retiring en masse), his response is, “It’s math. It will be global, and you can’t hide from it.” Beaulieu said states that will be hit most severely include New Jersey, California, Connecticut, and Illinois. Pennsylvania, he noted, has almost as high a percentage of Boomers as Florida, which does not bode well for its financial future.
- Because of immigration and its proximity to the U.S., Canada will win in the long haul. He suggested that future personal investment in Canada could be smart, including bonds, as their banking system is more resilient and less prone to political machinations.
Paul J. Heney – VP, Editorial Director
[email protected]
On X (formerly Twitter) @wtwh_paulheney
Filed Under: DIGITAL ISSUES • DESIGN WORLD
