developed by Elizabeth Kübler-Ross , with stock markets following Bob Farell ’ s model of reactions to financial crises , as shown in chart 17 .
A number of currency crises have already occurred around the world . Now Trump ’ s trade policies will introduce us to the world of protectionism . The White House website has already confirmed the planned withdrawal from the TransPacific Partnership – and from NAFTA , if Mexico and Canada refuse to negotiate a new deal . China is certain to be targeted as well . Clearly , other countries will respond in kind .
It also seems clear from President Trump ’ s Inauguration speech that the US has now followed the UK into the Anger stage :
“ This American carnage stops right here and stops right now …"
“ For many decades , we ’ ve enriched foreign industry at the expense of American industry ; Subsidised the armies of other countries while allowing for the very sad depletion of our military ; We ’ ve defended other nations ’
▼ Chart 17 Elizabeth Kübler-
Ross ’ and Bob
Farrell ’ s models may provide a good guide to the outlook borders while refusing to defend our own ; And spent trillions and trillions of dollars overseas while America ’ s infrastructure has fallen into disrepair and decay ."
“ We ’ ve made other countries rich while the wealth , strength , and confidence of our country has dissipated over the horizon . One by one , the factories shuttered and left our shores , with not even a thought about the millions and millions of American workers that were left behind . The wealth of our middle class has been ripped from their homes and then redistributed all across the world .”
Like a stone being tossed into a pond , the ripples from Trump ’ s protectionist policies will gradually spread out around the world . And the process will likely speed up if we are correct in suggesting that a global downturn is around the corner .
We have all become used to a globalised world with global supply chains and have forgotten that , historically , this has been the exception rather than the rule . 2017 may prove to be the year when we start to rediscover our past , for better or worse . ■
ADJUSTING TO TODAY ’ S NEW DEMOGRAPHIC REALITY BOB FARRELL ’ S MODEL OF FINANCIAL CRISES : ELISABETH KÜBLER-ROSS ’ PARADIGM OF LOSS MODEL
SHARP DECLINE
2008 – 2009 REBOUND 2009 – 2014
DENIAL Stimulus policies ‘ Things will soon return to Normal ’
ANGER Downturn becomes obvious ‘ The triumph of the populists ’
2015 – 2020 ?
CURRENCY CRISES
DRAWN-OUT DOWNTREND , WITH INTERMITTENT RALLIES
BARGAIN
PROTECTIONISM Focus on what we can control ‘ Simple solutions to a complex problem ’
DEPRESSION Reality begins to be confronted ‘ Awareness of what has been lost ’
2021 – 2025 ?
ACCEPTANCE Finally people accept what has happened New settlement emerges out of extreme pessimism
THE NEW NORMAL
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