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European Resurgence
July 31, 2020
One of COVID-19’s many less-than-obvious consequences is the way it makes us look inward. Facing mortality has always done that, of course. West Texas Judge Roy Bean reportedly said, “Nothing focuses the mind like a good hanging.” For the vulnerable and those of us of a certain age (ahem), this virus goes beyond the normal daily risks.
The difference this time is we are vulnerable based on proximity. The virus threatens us only if it is physically near. That’s one reason Americans didn’t take it seriously at first. It was far-way Chinese and Italian news. Like reading about the all-too-terrible prospect of China’s Three Gorges Dam collapsing, or the current famine in Africa. You know it’s bad, but it’s not in your backyard.
Then, as the virus spread here, our protective measures required heightened awareness of local conditions. Whether that stranger is getting too close to you may be more important than events overseas.
As a result, we haven’t paid enough attention to some important developments elsewhere. Big things have been brewing in Europe. The same continent that two years ago I said was going through “monetary drug withdrawal,” is now set to outpace US growth by a wide margin. And US growth, which had led the world for years, now looks likely to lag it.
That turnaround has potential major market consequences, which can be either good or bad depending on the market. We need to pay attention. What happens around the world affects us and our markets. The global...
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