Posted on 08/20/2023 11:23:49 AM PDT by Vendome
What is happening to the world economy? An analogy frequently used to describe the global economy is that of a plane and whether it will enjoy a soft landing or suffer a hard one.
"...the minutes released by the US Federal Reserve last week. They showed a number of policymakers fearful of overtightening monetary policy. Such concerns are even greater here."
"...businesses find it harder and more expensive to raise funds, because of a credit crunch, tough lending conditions and a more risk-averse environment in capital markets. "
"...the economic forecasts from the International Monetary Fund. In late July, they forecast that global growth would slow from 3.5pc last year to 3pc this year and next.... incredibly weak.
Not only that, but with two thirds of global growth this year expected to come from Asia this explains why there is so much nervousness about recent poor economic news from China."
"... until two years ago, Western economies had witnessed a dozen years of cheap money. This consisted of policy rates being kept too low for too long and of central banks printing money as if it was going out of fashion. The balance sheets of central banks soared. Not only was money cheap, it was widely available. Global liquidity was plentiful."
Cheap money led to asset price inflation, allowed markets to not price properly for risk, led to a misallocation of capital including the survival of zombie firms and it also helped feed the recent surge in inflation.
Collateral, often in the form of government bonds and other quality debt, plays an important part in underpinning this system. If this is now being questioned as a safe asset it suggests not only greater financial instability but also greater risk aversion, meaning that global liquidity conditions will naturally tighten further.
(Excerpt) Read more at msn.com ...
Bidenomics 🤦♂️
The pump is over. Now the dump.
I have no idea what this means. What I do know is that we bet the western economy on winning in Ukraine, breaking up the Russian federation and seizing the assets. That, it turns out isn't working out so well and Europe is in a fix because of very expensive gas prices. That's what happens when you misunderestimate your enemy. Just what part of Russian capabilities in integrated air defense, electronic warfare and artillery capacity did we forget to take into consideration.
LOL good one!
Buy 1 year and 2 year treasuries. Swoop in when markets crash.
Buy SPXS. Check it out. Anybody know a better hedge against a economic collapse I’m all ears.
meaning that global liquidity conditions will naturally tighten further.
That’s the key phrase/word right there. Liquididy. Cheap money IE low interest rates that we have had for years, means there is a lot of money floating around. liquidity. Tighter interest rates means less money. Think of liquidity as oil in your engine. Oil drains away, engine seizes up. Tech stocks need lots of cheap money because profits on new things are years away. Cheap money goes away, new startups go belly up before they hit profitability.
And Michael Burry(The Big Short) has a $1 and 1/2 Billion Dollar Short position on the stock market as we speak...hmmm...
Tourism in the Gettysburg area has slowed in the past month. Not crazy slow, but noticeable.
You need to make a phone call ping
I would not be surprised if there was a worldwide depression in 5 years or less.
Trading around seats is not going to save you. Still on the same plane. About time to deploy the ejection seat and bail out.
“I would not be surprised if there was a worldwide depression in 5 years or less.”
Bingo... And it is a planned Depression.
.Gov has a plan—to bail out the big banks and the big investment banks—no matter what.
They will be the last ones standing.
Those that believe the government and media “expert” economists when they tell you that “everything is awesome” and that Bidenomics is working great, are in for a very rude awakening.
2024 is going to be ugly in many ways.
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