Rothschild worried about new world economic order rt.com
Jacob Rothschild has voiced concern about the global financial system that was established after WWII. The billionaire banker points to the US-China trade war and eurozone crisis as the key problems putting economic order at risk.
“In 9/11 and in the 2008 financial crisis, the powers of the world worked together with a common approach. Co-operation today is proving much more difficult. This puts at risk the post-war economic and security order,” Rothschild warned in his investment trust's half-year results commentary.
In economics, the post-war order is usually refers to a monetary management system which led to a rise of the US dollar as a dominant currency.
“In the circumstances our policy is to maintain our limited exposure to quoted equities and to enter into new commitments with great caution,” Rothschild added.
Rothschild’s RIT Capital investment has a historically low 47 percent exposure to the stock market. The banking dynasty is concerned that the 10-year stock market rally could be ending.
“The cycle is in its 10th positive year, the longest on record. We are now seeing some areas of weaker growth emerge; indeed the IMF has recently predicted some slowdown,” the investment banker said.
Rothschild pointed at “potentially destructive” debt levels in Europe and trade wars as major problems for the global economy.
He added, “problems are likely to continue in emerging markets, compounded by rising interest rates and the US Fed's monetary policy which has drained global dollar liquidity.”
According to Rothschild, the lack of a co-ordinated, international response to global challenges was unlikely in an era of populist and protectionist leaders such as US president Donald Trump.
Published Date:2018-08-09