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We are all mercantilists now
For half a century, Bridgewater has focused on building a deep understanding of global markets and economies to deliver insights for the most sophisticated institutional investors. In this newsletter, my co-CIOs and I will share key themes from this research. Sign up here and get access to our…
The previous global consensus around free trade and limited government intervention is hanging by a thread, and a different system—something I call “modern mercantilism”—is increasingly ascendant, with the election of Donald Trump representing another dramatic step in this direction. Time magazine in 1965 published an article whose title quoted Milton Friedman: “We Are All Keynesians Now.” Using fiscal deficits to manage business cycles—once an unorthodox idea—had become mainstream, driving market outcomes in the decades that followed. The political and social consequences of lost domestic manufacturing jobs are leading policy makers to second-guess whether cheaper consumer goods and a more market-efficient allocation of capital are worth it.
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