The Probability of US recession just gone from 60% to 70% over next 12 months …
Get ready for the next recession: China Credit Impulse collapsed, US same going down and now "trade flow" will come to a full stop with a massive tax on US consumers! Navarro claims this is a "a good day for America" – the opposite most likely #SaxoStrats pic.twitter.com/m2fIl1bGL9
— Steen Jakobsen (@Steen_Jakobsen) March 2, 2018
In my 30+ years of trading & economics I have NEVER seen more wrong assumptions and premises than the ones presented by the US Administration on trade.
- Peter Navarro is single handed the biggest risk to growth in this cycle ….
- Tariffs will increase the prices for US consumers – effectively it’s a tax on consumption – (Something like 40% of all goods sold @ Wal-Mart is China or Asia produced)….
- Stop trading will reduce deficit for the US but it will mean lower growth – the US voters will go from spending money they don’t have (current account deficits) to underspending to adjust to both higher prices and less growth.
This is a NEW AREA in trade and unfortunately an extension of a slow-down in cross country trade witness last decade..
US dollar will weaken further – I remain structurally, tactically very negative on US Dollar.
US FI will come down in yield – growth will soon show its late cycle rather than a new cyclw.
Inflation – topline – not structural inflation will remain high…
We are risking STAG-FLATION Light…in the US and recession like growth as we enter 2019
US Credit Impuse vs. Final Domestic Demand
Source: Saxo Bank – Chris Dembik
This is my “favorite” indicator of inflation – structural – the NET DEMAND on banks (velocity of money) vs. US Credit Impulse
Very long JPY – only true “safe haven currency left” – Short US vs. ZAR, GBP, JPY
Starting to go long US FI again..
Stock market feels like 2007/08 & 2000 but lets see the present attack on 100 SMA confirmed:
NQ Future @ 6487-00
ES Future @ 2665.00 (Breaking while I write this)
DAX – already significantly below!
SHCOMP – already significantly below!
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