You’ve mentioned for quite some time now that you expect a recession in the US later this year, mainly driven by the consumer impact of tariffs. Now that trade deals are being made, namely the China one announced today, is that thesis not invalided?
Not at all. I started talking about recession back in November as consumption is volume was starting to stagnate/decline & inflation continued to rise for mandatory expenses (rent, insurances, transports, food...), crushing even more households.
This has only been getting worst over the last months & the actual tariffs on China have not yet been impacting the economy. One month of 140% tariffs will hurt so many business & households but all those damages take time to spread is all. Might take months.
If anything, everything which happened made me more convinced that recession can't be avoided, and gold agrees with that take while interest rates remain high only because of massive outflows from countries & institutions to protect their currency & manage their expenses. Detailed here.
Without this currency mechanism, 10Y would certainly be down already.
On deals, the U.K. deals is nothing to my opinion as shared & we have no details on what will happen with China, just that talks are going well. Let's see tomorrow.
I would need to see consumption rise to change my opinion on what is to come. A deal with China will help but I believe the damages are already done. I continue to check on the data and will change my bias if it proves me wrong, but for now nothing changes & my base case remains a recession happening in the next year or so.
I see your point now. Yes, it’s certainly a fluid and ever changing situation to navigate. Anxious to hear the commentary around the China talks tomorrow. Appreciate your write ups as always
Tomorrow is going to be very interesting & I won't be surprised to see the market rip, if you remember since months now I am expecting a bounce which I thought would make a new ATH before we finally have the sign of economic slowdown.
I kinda gave up on that happening around a month or 3 weeks ago - terrible timing... But that might be what's happening now.
But truth is, market can rip, it doesn't make the economy healthier. Just a matter of time until things show up. Once again, if the data change, I'll change. But so far... Nothing changed.
Thanks a lot! Appreciate the support, since long now! It won't be forgotten.
You’ve mentioned for quite some time now that you expect a recession in the US later this year, mainly driven by the consumer impact of tariffs. Now that trade deals are being made, namely the China one announced today, is that thesis not invalided?
Not at all. I started talking about recession back in November as consumption is volume was starting to stagnate/decline & inflation continued to rise for mandatory expenses (rent, insurances, transports, food...), crushing even more households.
This has only been getting worst over the last months & the actual tariffs on China have not yet been impacting the economy. One month of 140% tariffs will hurt so many business & households but all those damages take time to spread is all. Might take months.
If anything, everything which happened made me more convinced that recession can't be avoided, and gold agrees with that take while interest rates remain high only because of massive outflows from countries & institutions to protect their currency & manage their expenses. Detailed here.
https://www.wealthyreadings.com/p/weekly-recap-april-w4
Without this currency mechanism, 10Y would certainly be down already.
On deals, the U.K. deals is nothing to my opinion as shared & we have no details on what will happen with China, just that talks are going well. Let's see tomorrow.
I would need to see consumption rise to change my opinion on what is to come. A deal with China will help but I believe the damages are already done. I continue to check on the data and will change my bias if it proves me wrong, but for now nothing changes & my base case remains a recession happening in the next year or so.
To monitor. I'd love to be wrong.
I see your point now. Yes, it’s certainly a fluid and ever changing situation to navigate. Anxious to hear the commentary around the China talks tomorrow. Appreciate your write ups as always
Tomorrow is going to be very interesting & I won't be surprised to see the market rip, if you remember since months now I am expecting a bounce which I thought would make a new ATH before we finally have the sign of economic slowdown.
I kinda gave up on that happening around a month or 3 weeks ago - terrible timing... But that might be what's happening now.
But truth is, market can rip, it doesn't make the economy healthier. Just a matter of time until things show up. Once again, if the data change, I'll change. But so far... Nothing changed.
Thanks a lot! Appreciate the support, since long now! It won't be forgotten.