The G20 Summit is likely to generate many headlines and few concrete measures. However:
- Growth estimates have been coming down consistently for many months.
- G20 economies have been increasing debt and imbalances under constant “stimuli” which have generated diminishing returns.
- Global Liquidity and low rates are only disguising the misallocation of capital, poor productivity growth, and bloated government spending.
- An agreement between China and US may be used as a catalyst, but is unlikely to change the trend of lower growth, as it will likely be a zero-sum deal, because there is no evidence that China imports less than it needs, rather the opposite.