Growth is strong worldwide but there are increasing signs of economic trouble ahead, most of it based on the Trump tariffs, which are about to kick in. Pushback has begun, but it is still modest. China has indicated it will introduce countervailing duties on a wide range of products. Europe seems to be threatening action through the WTO. The rest of the world is preparing to ignore the US, sidestepping it or forming its own trade relations. In general, things will get ugly soon.

One major problem for the US is that the political class is standing by doing nothing until it is too late to save the country from ruin. The world is getting sufficiently annoyed and frustrated with the Trump administration to where no one will want to deal with them.

In Asia China has made it clear that countervailing duties are coming. In Europe the talk among the EU members is to ignore America and go it alone. The Germans have made it clear that Trump and his administration are unreliable on a range of issues from security to economic matters. They should be side-stepped. The French are in agreement with Berlin. The English are on the sidelines as they are too steeped in their Brexit plans to care. The rest of the EU will go along with the Germans.

Meanwhile, the Fed is about to hike rates. The September 25-26 FOMC meeting is widely believed to be accompanied by the first rate hike, one that will be followed by several more. To what extent that move will slow down the economy remains to be seen. More than likely the economy will expand at a much slower pace. A sharp reversal is not expected, yet. That may come as the tariffs start to be felt. Will we see a 1929-type economic disaster? Probably not. But there should be a steep decline in stock prices.