Don’t Worry…Be Happy

How We See Global Liquidity, Crypto-Sensitivity And Business Activity

Asset markets are rising, but we feel that investors are sounding too downbeat. Often the markets know best: after all pundits have cried ‘Wolf’ far too many times, notably about the ‘non’-recession. Bull markets always climb a Wall of Worry, but underlying trends matter far more than single events. We fear that the shift towards faster monetary inflation is inescapable, because of the COVID and GFC-stoked levels of debt and fiscal spending. Looking ahead, investors must think carefully about how to asset allocate in this new World. Spoiler alert: it’s no longer a 60:40 equity-bond portfolio mix.

Our predicted turn lower in the US dollar appears to be unfolding. Not only has the gold price soared to all-time highs, but the DXY index basket has fallen near-5% against other currencies over recent weeks. Curiously, this should be a sign for optimism, not pessimism. It will spur increased lending across World markets and underpin global economic recovery. Already there are compelling signs that banks are becoming more upbeat, and our daily index of World GDP (based on AI-modelling) has just jumped higher. The widely-predicted recession looks to be slipping away?!