A few months ago, I wrote that the Chinese slowdown was much more than covid related and pointed to the challenges coming from the excessive weight of the real estate sector in the economy. A research paper by Rogoff and Yang estimated that the real estate sector constitutes 29 percent…

The disastrous era of negative rates may be ending, but it is not over. Imposing negative nominal and real rates is a colossal error that has only encouraged excessive indebtedness and the zombification of the economy. However, nominal rates may be rising, but real rates remain deeply negative. In other…

The debate about recession risk is pointless. We are already in a recession. Real GDP (gross domestic product) in the United States declined at an annual rate of 1.6% in the first quarter. The Atlanta Fed Nowcast shows a 1.5% contraction in the second quarter. But the underlying figures are…

The European Central Bank should be hugely concerned about two pieces of news. The euro is on the verge of parity with the US dollar and has accumulated a drop of 17% since 2021, more than 35% since 2008. On the other hand, inflation in the eurozone reached 8.6% in…

Most market participants have been surprised by the last six months. The total return of the US Treasury Index was the worst since 1788 according to Deutsche Bank. Stocks closed June with one the largest corrections since 2008. Bonds and equities are falling in unison driven by rate hikes and…

Governments love inflation. It is a hidden tax on everyone and a transfer of wealth from bank deposits and real wages to indebted governments that collect more receipts via higher indirect taxes and devalue their debts. That is why we cannot expect governments to take decisive action on inflation. To…

The most common question among investors these days is when to buy the dip. Very few market participants seem to be worried about a crisis or deep recession, let alone a nuclear threat. However, those three scenarios are not unimaginable. In its Global Data Watch of June 17, JP Morgan…

For years we have read that it was important for the Federal Reserve and the major central banks to push the limits of monetary policy to boost growth and jobs. Monetary policy stood at the forefront of all recovery plans. In 2008, quantitative easing seemed enormous, but the subsequent incremental…

Many have read that there is a food crisis looming and there are significant concerns about grain shortages. The main reason for this possible crisis is the Ukraine invasion. However, this is not the full picture. Many countries around the world have a large deficit of cereal production, which…