The International Monetary Fund (IMF) today boosted its forecast for global growth for both this year and next – telling folks at the World Economic Forum in Davos, Switzerland, that the world economy would zoom along at a hefty 3.9% pace for the next 24 months.
But it also warned that the next recession “may be closer than we think.”
This is a big deal.
And a big opportunity.
You see, this rosier-than-ever scenario serves as a proof point for the “cheap money physics” prediction I’ve been making for my paid-up Private Briefingreaders for two months.
The best part is, the higher-than-expected growth/higher-than-expected recession risk dovetail perfectly into our “accumulate” strategy that’s given us massive gains on stocks across the board. That strategy lets us take advantage of the growth now and hold back some cash to “average down” on stocks that we like in case of a pullback.
Let’s take a gander at the IMF forecast, look at how that fully supports our “cheap money physics” call on the Trump administration tax cuts, and consider some stocks that are worth zeroing in on.
When Money Gets Cheap, Stocks Get Going
Every year near the end of January, the Alpine resort town of Davos is the site of the World Economic Forum’s annual meeting. The nonprofit WEF, founded in 1971 (when it was called the European Management Forum, a name that changed in 1987), says it is “committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.”
Most folks just refer to the meeting as “Davos.”
And because it’s viewed as a gathering of the world’s economic cognoscenti, Davos is the focus of intense media attention.
And this year is no different.
For us, this year’s gathering is of interest because of this forecast. The 3.9% growth that the IMF is predicting for this year and next is up 0.2% for both years from what it predicted back in October.
According to Bloomberg Politics, that would represent the fastest growth rate since 2011, when the world was rebounding from a financial crisis that took the U.S. economy and many of its counterparts to the precipice of depression.
But it’s the “trigger” for this lickety-split acceleration in growth that caught my eye; about half the catalyst for the boosted growth forecast stems from the Trump administration tax cuts passed in December and enacted after the first of the year.
