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Peak Globalization Global GDP vs China 240123

The USA economy & stock market continue to defy economic gravity.  The rest of the world isn’t doing as well.  The money question for 2024 is:  Will the USA’s growth carryover to the rest of the world or will the Global malaise drag down the USA?

The USA’s outperformance isn’t a new phenomenon.  Global GPD has been in decline, along with the world’s second largest economy- China.  Note the below chart.  Since the Great Financial Crisis, both Global GDP & China are trending lower.  While both have lower highs and lower lows, China’s underperformance is extreme.

I believe this slowdown is secular in nature and is primarily due to Peak Globalization.  The Pandemic and Second Cold War have accelerated the decline.

I recently had a lively discussion about this topic and more with Andrew Horowitz on The Disciplined Investor Podcast.  You can listen here: