Everyone enjoys a nice surprise - especially the ones that cause you to grin ear to ear, smile non-stop and wish the moment will never end.
There can also be bad surprises - and these are not the least bit enjoyable.
In this issue of the IceCap Global Outlook, we explain how governments are about to experience a bad surprise. And their reaction to these surprises will be significantly higher taxes for everyone.
There will also be a good surprise - adjusting your portfolios in anticipation of the bad surprise will allow you to not only preserve your capital, but also have you grinning ear to ear.
We invite you to read more.
Years ago, the seeds were sown.
Governments began an untenable trend of consistently spending more money than they collected in taxes. The difference of course, was made up by borrowing. As the years and deficits rolled along, so too did the amount of money owing. Governments responded by borrowing even more.
Meanwhile, global economies inevitably experienced varying crises. Governments and central banks always responded the same way - even more spending (and borrowing), and lower interest rates to stimulate growth.
Today, we've reached a dead-end.
Governments continue to borrow, but only because interest rates have been reduced to 0% AND because they are borrowing from themselves by printing money.
This dead-end is also compounded by a slowing global economy caused by the reluctance of private investors to spend.
In this issue of the IceCap Global Outlook, we prepare investors for a collision between:
a slowing economy,
0% and negative% interest rates,
an unsustainable debt binge.
What happens next hasn't occurred before in our lifetime - and this is why many investors will be blindsided.
The reason the world's economic slump continues is quite clear - people are spending less money than before.
The solution used by the world's central banks is to reduce the amount of money available to people to spend.
Irony or confusion? Take a pick. One thing is clear - investors are doing unusual things with their money, and unfortunately they are paying the price.
With Halloween right around the corner, it's the time of year to analyse what is safe and what is scary in investment markets.
And, the scariest investments in the world will become a complete surprise to many.
In this IceCap Global Outlook we detail what to be afraid of and why, and better yet - where you should hide.
Us economy goldilocks- 4th oct 2007 published in singapore timessatya saurabh khosla
The author's article that appeared in Business Times, Singapore on Oct 4, 2007 stated that USA Housing, low interest rates and derivatives will lead the global economy into a recession
Years ago, the seeds were sown.
Governments began an untenable trend of consistently spending more money than they collected in taxes. The difference of course, was made up by borrowing. As the years and deficits rolled along, so too did the amount of money owing. Governments responded by borrowing even more.
Meanwhile, global economies inevitably experienced varying crises. Governments and central banks always responded the same way - even more spending (and borrowing), and lower interest rates to stimulate growth.
Today, we've reached a dead-end.
Governments continue to borrow, but only because interest rates have been reduced to 0% AND because they are borrowing from themselves by printing money.
This dead-end is also compounded by a slowing global economy caused by the reluctance of private investors to spend.
In this issue of the IceCap Global Outlook, we prepare investors for a collision between:
a slowing economy,
0% and negative% interest rates,
an unsustainable debt binge.
What happens next hasn't occurred before in our lifetime - and this is why many investors will be blindsided.
The reason the world's economic slump continues is quite clear - people are spending less money than before.
The solution used by the world's central banks is to reduce the amount of money available to people to spend.
Irony or confusion? Take a pick. One thing is clear - investors are doing unusual things with their money, and unfortunately they are paying the price.
With Halloween right around the corner, it's the time of year to analyse what is safe and what is scary in investment markets.
And, the scariest investments in the world will become a complete surprise to many.
In this IceCap Global Outlook we detail what to be afraid of and why, and better yet - where you should hide.
Us economy goldilocks- 4th oct 2007 published in singapore timessatya saurabh khosla
The author's article that appeared in Business Times, Singapore on Oct 4, 2007 stated that USA Housing, low interest rates and derivatives will lead the global economy into a recession
Credit Suisse Global Investment Returns Yearbook 2016 Credit Suisse
Against the backdrop of the first interest rate increase by the Federal Reserve in almost a decade, the Credit Suisse Research Institute’s Global Investment Returns Yearbook examines similar episodes since 1900 and derives potential implications for future economic and financial market developments.
- Download the full report: http://bit.ly/1QSo6qn
- Order hard copy: http://bit.ly/1T9sTbe
- Visit the website: bit.ly/18Cxa0p
It has been seven years since the last financial crisis. In that seven-year period, the total global debt has increased by even more than it did in the seven years previous (2000-2007). From the end of 2007 through to the end of the first half of last year, total global debt increased by 40%, or $US 57 TRILLION! This massive increase in debt has been a consequence of easy money in a low interest rate environment aided and abetted by programs of quantitative easing (the provision of liquidity by central banks) in order to promote economic growth and investment.
The first quarter managed to record some positive results overall, despite severe declines in some sectors.
ROTHSCHILD FAMILY DUMPS U.S. DOLLAR FOR GOLD & ‘OTHER CURRENCIES’, BITCOIN?Steven Rhyner
Some {believe|think} that the {global|worldwide|international} {economic|financial} {climate|environment} is {getting worse|becoming worse|worsening} {by the day|every day|day by day}, with the collapse of Cyprus, Greece (Grexit), Argentina, Venezuela, Zimbabwe in our {rear|back} {view|sight} mirror.
Uncertainty reigns worldwide and is affecting economies and markets - whereto...Tristan Wiggill
A presentation delivered by Dawie Klopper, investment economist and portfolio manager of PSG Wealth at the annual Road Freight Association's Convention in Limpopo, South Africa.
Geopolitical events continued to make headlines this quarter but did little to quell investors’ enthusiasm as markets continued to advance. Russia and the Ukraine managed to agree to a temporary ceasefire just as sectarian violence in Iraq exploded driving oil prices higher. China garnered attention with its hegemonic designs on the South China Sea much to the displeasure of Japan and Vietnam as well as pushing back on any pro-democracy desires in Hong Kong. In addition, Argentina once again threatens to default on its debt after losing a Supreme Court decision to creditors in the US.
What some of the most informed people in the world have said about 2016. First off, if you are expecting this quarterly to tell you all about the juicy investment opportunities available to your family in 2016, you may be disappointed
because the subsequent paragraphs are not going to discuss that information.
Although you may glean some insight from the views expressed herein, our Q2 edition will contain more financial and economic information. The opportunities we are referring to in this article are qualitative in nature - but they do come with a price tag that you determine.
There is no doubt that 2016 will be a year of economic & financial challenges, globally. In our opinion, 2016, represents an opportunity for your family to prepare. Our view is that, if you havent already started doing so, you should discuss repositioning your family’s wealth strategy to thrive in the coming years. By now you should be aware that at PANGEA, we define wealth differently than most.
At PANGEA we recognize that wealth transcends dollars and decimals to also include the human elements of personal well-being, family intellectual capital and family & community legacy. What follows in no way represents advice, rather it is a curated composition of perspectives of what some of the best informed, wealthiest families in the world have already done to prepare in advance of the finanical and economic shifts on the horizon.
For the past 10 years, global central banks have created policies to artificially suppress interest rates to the lowest levels ever recorded.
Included in this strategy has been a deliberate strategy to create negative interest rates which have subsequently created an enormous financial bubble in global bond markets.
While this bubble and associated risks are known to a small section of global investors, Canada remains highly complacent to the risks involved and have demonstrated a lack of appreciation of how risks outside of Canada, can actually create financial stress within Canada.
This issue of the IceCap Global Outlook shares our view on Canadian Provincial Debt markets and why we believe it has a high probability of evolving into a significant liquidity event for Canadian investors.
The current economic expansion has achieved 2 significant milestones. And what makes these milestones special is that when combined together, they create an economic paradox.
For starters, the current economic expansion has set the record as the longest period of continuous economic growth in US history.
While at the same time, it has also set the record as being the weakest period of continuous economic growth in US history.
This should raise questions as well as concerns.
The answer to the primary question is as follows: this economic expansion has been completely supported and enabled by unorthodox interest policies by global central banks. Zero % and negative % interest rates around the world has allowed economies to maintain positive, yet muted growth.
The concern with this economic experience is that the majority of this growth has been artificially created.
In this IceCap Global Outlook, we examine the invisible hand and why it is the key to understanding why economic growth is so weak, and better still - what happens next.
She adores hats. She is always very polite and respectful of others. She waves to everyone, and consistently avoids conflict. She is a lady; she is The Queen.
Without a doubt, Queen Elizabeth lives a life quite unlike everyone else in the World – after all, royalty does have its privileges. Yet, when it comes to investing, the Queen is swimming in the same pool of stock market sharks as us common people.
Like everyone else, she pours through her quarterly statements to see how she’s fared. And like everyone else, she loves to make money and simply deplores negative returns. It was rumored that the 2008 crisis hit her particularly hard – over USD 40 million in stock market losses.
This experience must have jilted something, as when The Queen was visiting the esteemed London School of Economics she asked the professor a rather “un-queen” like question – why did economists fail to predict the biggest global recession since the Great Depression?
Credit Suisse Global Investment Returns Yearbook 2016 Credit Suisse
Against the backdrop of the first interest rate increase by the Federal Reserve in almost a decade, the Credit Suisse Research Institute’s Global Investment Returns Yearbook examines similar episodes since 1900 and derives potential implications for future economic and financial market developments.
- Download the full report: http://bit.ly/1QSo6qn
- Order hard copy: http://bit.ly/1T9sTbe
- Visit the website: bit.ly/18Cxa0p
It has been seven years since the last financial crisis. In that seven-year period, the total global debt has increased by even more than it did in the seven years previous (2000-2007). From the end of 2007 through to the end of the first half of last year, total global debt increased by 40%, or $US 57 TRILLION! This massive increase in debt has been a consequence of easy money in a low interest rate environment aided and abetted by programs of quantitative easing (the provision of liquidity by central banks) in order to promote economic growth and investment.
The first quarter managed to record some positive results overall, despite severe declines in some sectors.
ROTHSCHILD FAMILY DUMPS U.S. DOLLAR FOR GOLD & ‘OTHER CURRENCIES’, BITCOIN?Steven Rhyner
Some {believe|think} that the {global|worldwide|international} {economic|financial} {climate|environment} is {getting worse|becoming worse|worsening} {by the day|every day|day by day}, with the collapse of Cyprus, Greece (Grexit), Argentina, Venezuela, Zimbabwe in our {rear|back} {view|sight} mirror.
Uncertainty reigns worldwide and is affecting economies and markets - whereto...Tristan Wiggill
A presentation delivered by Dawie Klopper, investment economist and portfolio manager of PSG Wealth at the annual Road Freight Association's Convention in Limpopo, South Africa.
Geopolitical events continued to make headlines this quarter but did little to quell investors’ enthusiasm as markets continued to advance. Russia and the Ukraine managed to agree to a temporary ceasefire just as sectarian violence in Iraq exploded driving oil prices higher. China garnered attention with its hegemonic designs on the South China Sea much to the displeasure of Japan and Vietnam as well as pushing back on any pro-democracy desires in Hong Kong. In addition, Argentina once again threatens to default on its debt after losing a Supreme Court decision to creditors in the US.
What some of the most informed people in the world have said about 2016. First off, if you are expecting this quarterly to tell you all about the juicy investment opportunities available to your family in 2016, you may be disappointed
because the subsequent paragraphs are not going to discuss that information.
Although you may glean some insight from the views expressed herein, our Q2 edition will contain more financial and economic information. The opportunities we are referring to in this article are qualitative in nature - but they do come with a price tag that you determine.
There is no doubt that 2016 will be a year of economic & financial challenges, globally. In our opinion, 2016, represents an opportunity for your family to prepare. Our view is that, if you havent already started doing so, you should discuss repositioning your family’s wealth strategy to thrive in the coming years. By now you should be aware that at PANGEA, we define wealth differently than most.
At PANGEA we recognize that wealth transcends dollars and decimals to also include the human elements of personal well-being, family intellectual capital and family & community legacy. What follows in no way represents advice, rather it is a curated composition of perspectives of what some of the best informed, wealthiest families in the world have already done to prepare in advance of the finanical and economic shifts on the horizon.
For the past 10 years, global central banks have created policies to artificially suppress interest rates to the lowest levels ever recorded.
Included in this strategy has been a deliberate strategy to create negative interest rates which have subsequently created an enormous financial bubble in global bond markets.
While this bubble and associated risks are known to a small section of global investors, Canada remains highly complacent to the risks involved and have demonstrated a lack of appreciation of how risks outside of Canada, can actually create financial stress within Canada.
This issue of the IceCap Global Outlook shares our view on Canadian Provincial Debt markets and why we believe it has a high probability of evolving into a significant liquidity event for Canadian investors.
The current economic expansion has achieved 2 significant milestones. And what makes these milestones special is that when combined together, they create an economic paradox.
For starters, the current economic expansion has set the record as the longest period of continuous economic growth in US history.
While at the same time, it has also set the record as being the weakest period of continuous economic growth in US history.
This should raise questions as well as concerns.
The answer to the primary question is as follows: this economic expansion has been completely supported and enabled by unorthodox interest policies by global central banks. Zero % and negative % interest rates around the world has allowed economies to maintain positive, yet muted growth.
The concern with this economic experience is that the majority of this growth has been artificially created.
In this IceCap Global Outlook, we examine the invisible hand and why it is the key to understanding why economic growth is so weak, and better still - what happens next.
She adores hats. She is always very polite and respectful of others. She waves to everyone, and consistently avoids conflict. She is a lady; she is The Queen.
Without a doubt, Queen Elizabeth lives a life quite unlike everyone else in the World – after all, royalty does have its privileges. Yet, when it comes to investing, the Queen is swimming in the same pool of stock market sharks as us common people.
Like everyone else, she pours through her quarterly statements to see how she’s fared. And like everyone else, she loves to make money and simply deplores negative returns. It was rumored that the 2008 crisis hit her particularly hard – over USD 40 million in stock market losses.
This experience must have jilted something, as when The Queen was visiting the esteemed London School of Economics she asked the professor a rather “un-queen” like question – why did economists fail to predict the biggest global recession since the Great Depression?
South of San Francisco lies a small stretch of the famous California Highway 1 notoriously known by locals as The Devil's Slide.
The stunning view along this road is supported by a weak and steep foundation of loose rock, and porous soil that has been increasingly eroding away over the years sweeping cars, pavement and lives into the sea below.
Naturally, rock slides from the erosion reached a point where the road has been deemed unsafe and closed. In the end, the Devil in the details was a weak foundation supported by illogical engineering.
Today, the Financial Devil has watched patiently, as the world’s central banks and political leaders built a financial debt and interest rate structure on a foundation consisting of theories, acronyms and worst of all – hope.
Since 1982, the financial world has enjoyed a thrilling ride – one zoomed around the world by 36 years of bailouts and declining long-term interest rates.
In this issue of the IceCap Global Outlook we help you see how a pattern of minor financial stresses will culminate into a major financial stress.
And more importantly, how to identify the opportunities that will be created as the majority of the industry continues to ignore the Financial Devil.
For many, the investment world can be a confusing place. Banks, mutual finds, stocks, bonds, currencies, insurance, inflation, taxes, economies - it's no wonder the majority have glossed eyes.
And sitting on top of this confusion pie are central banks.
Each country has its own central bank which is responsible for setting overnight interest rates and the amount of money in that country's financial system.
Yet, there is one central bank that is the most important, sits on top of the world, and all of its actions impact not only their local country, but also every other country in the world.
This central bank is the US Federal Reserve.
In this latest IceCap Global Outlook we share how actions by the US Federal Reserve are always reactive to a crisis which, ironically, it helped create in the first place.
Today's central banks are once again, trying to thread the financial needle, and rescue us from the crisis that was born from the depths of the 2008-09 Great Financial Crisis.
The crisis is happening, yet there is good news - the crisis is creating opportunities to not only preserve your hard earned savings, but to capitalize too.
With Halloween right around the corner, it's the time of year to analyse what is safe and what is scary in investment markets.
And, the scariest investments in the world will become a complete surprise to many.
In this IceCap Global Outlook we detail what to be afraid of and why, and better yet - where you should hide.
Slides for a talk at Universitas Gunadarma regarding current economic conditions (mostly US and commodities) as well as Indonesia's capital market followed by stock recommendations.
When it comes to sleepless nights, Toimi Soini of Finland originally set the record by using the “toothpicks under the eyelids” method for 11 straight days. In hindsight, Toimi was an amateur.
You wouldn’t know it, but the nice people running the Bank of Canada have gone sleepless since 2003 – that’s 3,564 days without sweet dreams.
Yet, that’s nothing compared to the very private folks at the Swiss National Bank. These super-secretive bankers have surpassed over 4,660 sleepless nights – despite living in Zzzzzzurich.
This, of course brings us to the World record for sleepless nights. At 5,025 nights and counting, the always polite and well dressed chaps over at the Bank of England are reigning champions.
Toimi Soini was not a banker and this was his downfall. As for the Canadians, Swiss and British – yes they are all bankers, but not just any bankers. This terrific trio have the displeasure of forever being known as the bankers who sold their gold.
The irony of course, is the action of the World’s central bankers themselves is the reason why gold is destined to remain golden for sometime to come. And with gold sitting near $1700/oz, and with no end to the money printing games, the sleepless nights are destined to continue.
The fundamental theme of the newsletter remains the same -- to dive deeper into economic issues that affect our investors. However to keep it interesting, the analysis has been kept at a macro level without getting into minute details.
We received encouraging feedback on the inaugural issue and we have used the same to improve this edition.
We hope you find the newsletter interesting.
1. Reflation Phase To Be Temporary, More Downside Ahead
Earlier on in 2016, ‘random and violent markets’ went off to panic mode out of (i) fears over China’s messy stock market and devaluing currency, (ii) plummeting oil price, (iii) strong US Dollar. Today, we believe complacent markets are similarly illogical and over-shooting, this time on the way up. As we re-assess the validity of the underlying risks, we expect a shift in narrative in the few months ahead and a sizeable sell-off for risk assets.
2. Four Key Conviction Ideas
We analyze below our key ideas for the next 12 months:
Short Chinese Renminbi Thesis. In Q1, China only managed to keep GDP in shape by means of graciously expanding credit by a monumental 1 trn $. Unsurprisingly, at 250% total debt on GDP, you cannot borrow 10% of GDP per quarter for long, without a currency adjustment, whether desired or not.
Short Oil Thesis. Long-term, we believe Oil will follow a volatile path around a declining trend-line, which will take it one day to sub-10$. Within 2016, we expect global aggregate demand to stay anemic and supply to surprise on the upside, inventories to grow, primarily due to the accelerating speed of technological progress.
Short S&P Thesis. To us, the S&P is priced to perfection, despite a most cloudy environment for growth and risk assets, thus representing a good value short, for limited upside is combined with the risk of a sizeable sell-off in the months ahead.
Short European Banks Thesis. We believe that micro policies at the local level, while valid, are impotent against heavy structural macro headwinds, and only the macro environment can save the banking sector in its current form in the longer-term. Macro structural headwinds for banks these days are too heavy a burden (negative sloped interest rate curves, deeply negative interest rates, deflationary economy, depressed GDP growth, over-regulation, Fintech), and will likely push valuations to new lows in the months/years ahead.
In this issue, IceCap shows how the Toronto housing bubble has been created and what will make it break - the answer may surprise you.
In addition, we detail how the European Central Bank has applied all sorts of financial make-up to convince the world that Italy, Spain, Portugal and others are in solid, financial shape.
Of course, the problem with make-up is that eventually it wears off, and then what is left exposed is not pretty.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
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1. Our view on global investment markets:
February 2019 – “Surprise Party”
Keith Dicker, CFA
President & Chief Investment Officer
keithdicker@IceCapAssetManagement.com
www.IceCapAssetManagement.com
Twitter: @IceCapGlobal
Tel: 902-492-8495
2. IMPORTANT: An investment in any strategy, including the strategies
described herein, involves a high degree of risk. There is no guarantee
that the investment objective will be achieved. Past performance of
these strategies is not necessarily indicative of future results. There is
the possibility of loss and all investment involves risk including the loss
of capital.
The opinions and views expressed in this publication are those of the
firm and the author.
Disclaimer
3. 1www.IceCapAssetManagement.com
Surprise!
Markets
Unless you’ve been off-grid, all investors know by now that recent
market movements have been generating those eye-ball scratching,
media-dreaming headlines emblazed with horrific words including
CRASHING, DEVASTATING, and PLUMMETING.
With these headlines generated by real news networks, surely it must
be true and it should give you a cause for concern.
However, as the brain works in different ways, sometimes it’s better
to visualize these CRASHING, DEVASTING, and PLUMETTING markets.
Here’s a chart showing the US Dow Jones Industrial Average – we ask
you to spot the CRASHING.
No worries if you cannot see the CRASHING – we can’t see it either.
They can be a lot of fun.
Your closest friends, family and loved ones become giddy with
excitement of the thought and hope of springing the ultimate surprise
on you during your very special day.
Appreciated only by the surprise planners is all of the work put into
planning the perfect moment to make your heart race, your eyes
widen and your smile stretch to maximum lengths.
Surprise parties can also produce an unwelcomed surprise.
These are the parties where the intended surprise is nothing like the
actual surprise.
In the financial world today, nearly 40 years of continuously declining
long-term interest rates, combined with 10 years of zero and negative
interest rates, added to 10 years of money printing, 10 years of
growing zombie banks and lifetimes of governments overspending, is
very close to launching the ultimate surprise party.
The question of course – will it be a happy, champagne supernova
party? Or will the party produce the ultimate financial surprise?
Understand, everyone in the world will be attending this party – you
have no choice. And those who are smart and prepared will actually
have a really nice time. Everyone else will not.
February 2019 The Surprise Party
US Dow Jones Industrial Average
4. Hard to see… And then we have the hysteria created by the gold bulls – or gold
bugs as they dislike to call each other.
In the minds of these shining investment experts, Gold Bullion is now
surging higher than a kite and will once again (any day now) soar into
the stratosphere.
Here’s a chart showing Gold – try to spot the SURGING and SOARING:
No worries if you cannot see this either.
Next, considering the US Federal Reserve completely reversed its
course on interest rate hikes AND the government in Washington
fought and bickered over the budget – then obviously the US Dollar
should be crashing as well.
Here’s a chart showing the US Dollar – this time, we ask you to spot
the DEVASTATION:
No worries if you cannot see the DEVASTATION – we can’t see it either.
February 2019 The Surprise Party
US Dollar (DXY Index)
Gold Bullion
2www.IceCapAssetManagement.com
5. 3
Don’t read headline news
Seemingly everyone agreed - with stocks declining aggressively, with
President Trump shutting down the federal government and not
reaching any trade deals with China, and with the Federal Reserve
putting a complete halt to interest rate hikes – the USD was about to
hit the fan and splatter from sea to shining sea.
But it didn’t.
We like to remind investors that today’s financial markets have been
overwhelmingly influenced, supported and simultaneously
suppressed by 10 years of unorthodox, never-before-tried, and
fantasy-like monetary policies by the world’s biggest central banks.
At IceCap we have consistently communicated that this environment
has started to unravel, and the result will be a crisis across bonds,
currencies and interest rates that will drive enormous amounts of
foreign capital to seek safety in the USD.
THIS is why, despite the current sharp movements in many markets –
the USD fails to crash as the majority expect.
Something else that catches our eye and should catch EVERYONE’S
eye is the performance of European bank stocks.
Chart next page shows the performance of European bank stocks.
In a normal functioning economy, banks do VERY well.
So, just to be clear:
- Stocks are not crashing
- US Dollar is not plummeting
- Gold is not surging
Naturally, we know these factual and truthful observations are hurting
the feelings of many investors.
After all, we know of investment managers who have been completely
out of the stock market for the last 6 years. And with stocks declining
sharply on Christmas Eve – these managers were absolutely
[prematurely] popping the cork.
Gold investors too have been taking it on the chin for a few years now.
And every single time the shiny rock bounces from lower lows, it’s
inevitable for them to email me with anecdotes over their investment
precognitions. No doubt the current bounce convinced these investors
too, to pop the corks over their recent success.
And then we have the single, most important investment in the world
today – the USD.
And due to a myriad of reasons – it is also the most hated currency in
the world. Seemingly every investment expert, novice and weekend
warrior has developed a spectacularly strong dislike for the greenback.
This dislike is borderline impractical, unhealthy and most importantly –
unrealistic.
February 2019 The Surprise Party
www.IceCapAssetManagement.com
6. 4
For a dose of reality see European Banks
There will be a European Bank Stock
Crisis – once Euro banks start to go,
capital will rush to USD for safety
In a normal functioning economy, banks have strong demand for
lending, and most importantly – yet never talked about by the
talking heads, banks also experience fewer and fewer
people/companies reneging on their loans.
This type of economy is a bonanza for banks – and since banks
operate in quasi-monopolies with the benefit of being leveraged,
bankers love this kind of economy.
In fact, they love it so much, for most bankers, late mornings quickly
spill into liquid lunches followed by gelatos and then finish the day
with a great pint with their great banker mates.
Those are the days.
Except in Europe these days, the opposite is happening.
Early mornings begin with spreadsheets that won’t balance.
Followed by never-ending calls from the regulators, rapidly means
lunch being cancelled once again.
The afternoons are no better. Instead of enjoying that ice cream,
these bankers are being creamed by senior management over
increasing non-performing loans, decreasing lending and worst of all
– demands by the government to buy even more sovereign debt.
February 2019 The Surprise Party
www.IceCapAssetManagement.com
7. 5
POSITIVE Returns are important
Of course, the end of day pint still occurs. But instead of toasting
records profits, record bonuses and record boondoggles – the
bankers commiserate.
European bank stocks are not only scraping the gutters – collectively,
they are back to levels previously reached in the 1990s.
This is yet another crystal clear sign that Europe’s financial troubles
are no where close to being resolved.
The European financial and banking system is rotten to the core.
Recognizing and accepting this will provide enormous opportunities.
And speaking of opportunities – 2018 was a perfect opportunity to
preserve capital.
In 2018, IceCap clients all earned positive returns.
We are acutely aware that many investors in Canada and elsewhere
did not have enjoyable performance experiences. Most lost money in
emerging market stocks and bonds, high yield bonds, preferred
shares, various equity markets and most importantly by betting
against the US Dollar.
2019 is a new year. And it will absolutely create new opportunities to
both make and lose money on your investments.
Our over riding themes have not changed – we remain incredibly
bullish on the USD, and remain quite fearful of many parts of the bond
market and non-USD currencies.
Currently, we are neither fearful nor exuberant about the stock
market. While our equity market models have improved considerably
over the last 2 months, we fully expect the likelihood of markets
perhaps retesting the lows is a lot higher than we would like to see.
And with gold – we remain with zero holdings. We believe strongly
that gold will become an investment destination of choice, however as
long as our expectation for a surging USD continues, we’re afraid to
say that gold inevitably has one more leg down.
The good news is that this will give gold bugs yet another opportunity
to time the market perfectly.
The King is Dead, Long Live the King
Famed American bond legend Bill Gross is known as the Bond King and
he has called it a day – The King has decided to retire from the
investment world and ride off into the sunset.
After earning his bond skills, stripes and scars in the 70s, Gross’ career
really took off in the early 80s.
February 2019 The Surprise Party
www.IceCapAssetManagement.com
8. 6
The King
Year after year he began to bang out brilliant returns from the
unloved bond world.
In fact he was so good, from 1987 to 2013, his PIMCO Total Return
Bond Fund grew into an unheard of $300 BILLION fund.
Since then however, all hasn’t been rosy for the Bond King: “I look
back on it and the performance of the unconstrained fund in the past
February 2019 The Surprise Party
Bill Gross’ career
takes off
Bill Gross becomes
Bond King Legend
Bill Gross
ends career
Interest rates peaked
Interest rates bottomed
Interest rates bottomed
four years with Janus has been unsatisfactory, no doubt.” said Gross.
Yes, investment managers will ALWAYS have ups and downs – it’s the
nature of the beast.
Yet, to fully appreciate the incredible success of Bill Gross over his 40
year career, spend a few minutes on the above chart.
www.IceCapAssetManagement.com
9. 7
Savvy or lucky?
The Chart of course is one we’ve shown a million times – it shows the
history of long-term interest rates in the United States overlaid with
Bill Gross’ career.
As a reminder (all else being equal) – as long-term interest rates
DECLINE, the price of bonds INCREASE, and the opposite is also true.
We know by now, long-term interest rates peaked in 1982 and then
over a 34-year period declined all the way down to near 0%.
Yes, by now you should see that the Bond King, just happened to be
starting his career when long-term rates peaked, and naturally finished
his career when long-term rates troughed.
Of course, his recent struggles have begun in a period where long-term
rates have started to rise once again.
We’re certainly not here to pick on Bill Gross. Not only was Mr. Gross
an investor extraordinaire, he has also been extraordinarily charitable
and giving – yes, he’s a real nice person.
However, the reason we are highlighting The Bond King and his
experience is due to the (very obvious) overlapping/high correlation of
his career with the global yield curve and specifically, the trend and
change in long-term interest rates.
Was Gross expertly savvy at managing fixed income strategies?
February 2019 The Surprise Party
Or was he simply the benefactor of living his career at the exact
moment in time which just so happened to be the perfect time to
become a bond manager?
From yet another perspective, 10 years from now will IceCap’s
reputation as being an expert currency and global macro manager be a
function of our intelligence and witty writing?
Or maybe it will simply be the fact that we lived our careers during the
perfect time to become a global macro and currency manager.
For IceCap, it’s quite obvious how market trends over the last 40 years
have falsely shaped future expectations.
Think about this – over a nearly 30 year period, Bill Gross’s average
annual return from his fund was approximately 7%.
And since that is over a nearly 30 year period, and 30 years is a long
period of time – many investors, consultants and mutual fund sales
persons are telling the unsuspecting that this average return will
happen again in the bond market.
We’re telling you they are completely wrong, and this is why:
Uniformitarianism is the misguided belief that conditions always were
and always will be as they are now, and any natural changes will occur
over long periods of time (encyclopedia.com).
www.IceCapAssetManagement.com
10. 8
Uniformitarianism
In other words, in the future when people ask why few predicted the
“Great Bond Crisis”; the response will simply be – uniformitarianism.
Yes it is true. The majority of investors, managers, consultants, and
medias have all been lead astray. Since no one today has ever
experienced a crisis in the bond and currency world, then by nature –
no one is expecting one to occur now – which is of course, the classic
definition of uniformitarianism.
The problem of course – is that the financial world, and the interest
rate world, and the government spending world, is significantly older
than 34 years.
Long-term interest rates have clearly bottomed – the likelihood of
long-term rates going higher is 100%.
Yet, the big banks, big consultants, and big mutual fund sales
machines continue to absolutely believe in absolute terms that
anticipating future market movements is for chumps.
Instead, the majority of investment firms today simply accept the
current market conditions, never ask any thoughtful questions and
simply plough ahead as if one day is the same as the next.
Put another way – most investment firms today know only one
speed. And that speed is always full steam ahead, always search for
growth, always search for yield and most importantly, never question
the game.
February 2019 The Surprise Party
The game of course, is to come up with fancy ideas, fancy brochures
and fancy ways to get you, the investor, to fancy these firms.
Case in point, consider the table next page which shows a fancy new
product from a major big bank.
As you can see, this bank has created, developed and back tested a
brand new way to manage their investors’ hard earned savings by
investing it in the bond market.
Clearly, this bank recognizes times have changed in the bond world.
Yet, instead of concluding that the exponential increase in risk levels
has reduced opportunities in the fixed income world – this bank has
concluded the opposite.
Yes, they believe investment opportunities in the bond world have
actually increased!
Their solution is to do the unthinkable and reach for yield by investing
in junk bonds and emerging market bonds.
To put this into perspective – consider that current bond market
dynamics changed so much that it forced the Bond King to quit.
Yet, this entity who has never come close to achieving the same iconic
status as the King – has proclaimed that they have it all figured out.
www.IceCapAssetManagement.com
11. 9
Fancy games
Conserva)ve Bond Pool Core Bond Pool Core Plus Bond Pool
Throwing Darts
Bond
Strategies
have
become a
fancy
game
February 2019 The Surprise Party
What they have figured out are two things:
1) Current interest rates are so low that investing in regular
government and high quality corporate bonds will not produce
acceptable returns for their clients.
2) The only way to possibly produce returns acceptable for their
clients is to reach for yield – or put another way, take on
considerably more bond market risk.
When we put it this way – what should immediately jump off the page
is “take on more risk”.
Yes, the only way to meet the expectations of the most conservative
investors is to put them into increasingly riskier and riskier
investments.
In the professional world of portfolio management, it is well known
that the easiest way to increase potential returns, is to simply add risk
to the portfolio.
Most investment management firms would do this by increasing their
allocations to equity markets.
www.IceCapAssetManagement.com
12. 10
Stuck in a moment
Yet, this big bank is doing it through their bond strategies. Why?
It certainly isn’t due to the bank expecting equities to perform poorly
– if that’s their expectation, then emerging market bonds and high
yield/junk bonds would also perform poorly.
The real answer is they recognize the need to do something to make
their bond strategies more attractive relative to their competitors
Of course, this also means they have virtually no fear whatsoever of
any escalating risks in the bond world.
And as no one ever truly expects a crisis to occur – when it does
occur, it is a complete surprise.
The Surprise
It is fact – most financial crises in history have always been associated
with a large and sustained increase in borrowings.
Face it. If you borrow too much and then you cannot pay it back –
bad things happen.
Yet, the snap that causes the pop isn’t always what it seems.
Obviously, a point is reached when one cannot produce enough
income to pay previous debt.
February 2019 The Surprise Party
But what happens immediately before this moment in time is
something else – in order to maintain debt payments:
1) you reduce other spending,
2) and/or you try to earn more income with new or additional jobs.
And it is this moment that we face today.
Except, instead of individuals facing the moment of truth – we are
starting to see governments or sovereign states face the moment of
truth.
And during this moment of truth:
1) Governments will definitely NOT do #1.
2) Governments will ABSOLUTELY do #2
Now, when it comes to Governments, the way they try to earn more
income is not through new jobs, but rather through new and higher
taxes.
Looking at specific countries, there is no question – as a sovereign
state, America’s outstanding debt is at its highest point in history.
But the same is also true for Japan, Italy, France, Canada, Australia,
China and the beat goes on.
Yes, we’ve all heard this story before – yet this time it really is different
and we’ll tell you why.
www.IceCapAssetManagement.com
13. 11
So many things affected by rates
Chart this page, shows the growth of global debt since 1950.
FIRST, you’ll notice that debt REALLY begins to accelerate in 1982.
SECOND, you’ll recall that 1982 was the year when long-term interest
rates peaked (see previous chart on page 6).
THIRD, you’ll begin to understand and appreciate that nearly 40 years
of aggressive borrowing, has been consistently enabled by the COST
of borrowing consistently declining.
Therefore, the reason why TODAY, investors should absolutely be
quite concerned about global debt levels is rather obvious and
creates the rather obvious question – what happens when long-term
interest rates go higher?
The reason debt fears should matter NOW (and not BEFORE) is that
interest rates/cost of borrowing have declined to 0% AND have been
at 0% now for almost 10 years.
Obviously, the primary result of 0% rates is more people, more
companies and more governments have all borrowed more.
But the secondary result – and the one few talk about, is the interest
rate on these new borrowings is at rock bottom rates.
As soon as rates go higher (and we are not talking about central bank
February 2019 The Surprise Party
In 1982, global debt started to accelerate.
This also happened to be the exact point in
time when long-term rates peaked and then
started to decline.
www.IceCapAssetManagement.com
14. 12
Pay your fair share
rates – instead we are talking about long-term rates) the debt bubble
snaps, cracks and pops at the same time.
The reason a crisis emerges is due to borrowers paying increasingly
higher rates of interest on their debt which has the effect of clawing
away money that was previously used for spending in other areas.
The 2008-09 Global Financial Crisis was ignited when interest rates
on mortgages re-set to higher levels.
This produced a cascading effect of increasingly more and more
people being unable to afford their new mortgage payments at the
new (and higher) interest rate.
As all crises are different – and this next one will be very different;
the cascading effect of surging long-term rates will be especially
difficult for several reasons.
1) Bond prices everywhere will decline.
2) The cost of borrowing will increase.
3) A higher cost of borrowing will create larger deficits for
governments.
4) Larger deficits will absolutely result in higher taxes.
The last point is the surprise that few are talking about and it will
prove to be prescient.
February 2019 The Surprise Party
And unfortunately, the seeds are already being sowed to make this an
easy forecast.
Regardless of your political affiliation – understand that left leaning
political parties and movements are being supported by the fact that
the divide between the wealthy and poor has reached stratospheric
heights.
“The rich are not paying their share” has become an anthem across
the growing belief in socialist-leaning groups.
From this perspective – there’s really only one easy way to create a
remedy AND get elected at the same time.
Tax the rich.
And tax them they will.
With the 2020 American Presidential Election beginning to ramp up –
the candidates for the Democratic Party are tripping over themselves
to launch a tax the rich political platform.
Yet, there is one considerable challenge with taxing the rich – how do
you define rich?
www.IceCapAssetManagement.com
15. 13
Ae you rich?
February 2019 The Surprise Party
Currently across the developed world, top tax rates of 50% and greater
are triggered on annual incomes ranging from $200,000 and higher.
Of course on top of this, each country also charges additional taxes or
user fees on basically everything purchased for consumption, as well
as annual property taxes.
Putting aside your political view, one would agree that overall tax rates
are already high.
Yet, despite overall tax burdens already at high levels – governments
(Democratic/Republican/Liberal/Conservative etc) still cannot escape
the deficit trap.
Consider that during the 1940s the top tax rate in the USA was 94% -
one can see that based upon the past, there’s still plenty of room for
more taxes.
Of course, the other tax component that is being championed by the
Democratic front runners is the “wealth tax”.
This concept is to tax the mega rich 3% annually of their total net
worth. Considering the IMF has already wholeheartedly engaged and
accepted the concept of a 10% global wealth tax – the Democrats are
actually a little behind the curve on this one.
As investment managers, we shed our political and social views at the
door. It’s irrelevant what we think should happen. Instead, it’s infinitely
more valuable to understand what will happen.
And we can tell with a very strong conviction that talk of all these tax
increases will happen.
The reason for this is completely due to governments starving for
additional tax revenues.
Without it, governments believe it’s impossible for them to provide
the services and spending required to run their countries.
Sadly, none of these governments have ever demonstrated any fiscal
responsibility in the past – expecting it to occur in the future is a
guaranteed disappointment.
So, higher taxes are coming. And they are coming at exactly the
moment in time when governments will have to increasingly borrow
more at higher rates - just to simply maintain the status quo.
And based upon increasing deficits and debt loads, we know that the
status quo doesn’t work either.
Europe, Canada and Australia have long advocated a high tax regime in
order to provide strong social safety nets for its peoples.
Most should agree this is correct.
Except, there’s just one problem with this progressive, taxing approach
– it doesn’t work.
www.IceCapAssetManagement.com
16. 14
Simple math
The Wall Street Journal has noticed this challenge and states “Rising
levels of debt have long been a concern to policy makers. But low
interest rates in the years after the recession made those costs
cheaper for the government to bear.
What makes this chart even more frightening and is never written,
talked, or communicated in any way by the majority of the medias,
banks, advisors, and investment managers - is the rate of interest
used AND its exponential effect.
Data for the above chart was prepared by the United States
Congressional Budget Office (CBO). This is a non-partisan and not for
And the reason it doesn’t work is due to the following equation:
Put another way, the government spending side of the equation
always exceeds the tax received/income side of the equation.
Therefore, when it comes to fiscal policies, our governments only
possess the ability (or willingness) to only see tax revenues as never
being enough.
If only our governments were able to see that maybe, just maybe, the
reason practically every country, state, province and city are running
deficits, is due to unrealistic spending levels and policies.
From an investment perspective – this is where one needs to shed
their political, social and patriotic beliefs. The fact is that not one
government today is going to change their spending policies – unless
of course, they are forced to change their spending policies.
And it is this moment in time which will surprise governments and
investors who are unable to see this clear path towards bond market
mayhem.
To visualize the impact of deficits and its exponential effect on debt,
consider the following chart which shows how the % of tax revenues
allocated for interest payments on debt is set to surge higher.
Govt
Spending
Govt
Taxes
February 2019 The Surprise Party
www.IceCapAssetManagement.com
17. 15
Higher rates = Higher Trouble
rates and government fiscal imbalances have reached the point of no
return – it should be extraordinarily easy to see why a crisis re-
escalates across bond markets and currencies.
To really understand exactly how low interest rates have fallen,
consider the table/chart on the next page.
Practically all of Europe currently has negative or near 0% interest
rates.
As well, when you consider the following:
1) These negative and near 0% interest rates have been artificially
created by the European Central Bank.
2) Practically every country is running deficits
3) Practically every country operates in a ultra-low growth economy.
4) Practically every country is experiencing a sharp rise in ultra left
vs ultra right politics.
You would have to be daft to believe Europe escapes a bond and
currency crisis.
And when it happens, it shouldn’t be a surprise to anyone.
profit group meaning they are not trying to impress anyone.
If you dig deep enough into the data, you’ll find the “surprise” that will
certainly create that “moment in time” we are discussing.
For the 10 year period from 2018 to 2028, the CBO has calculated their
projections based upon interest rates on debt increasing from 2.3% to
3.5%.
Effectively, this means long-term rates in the United States will remain
relatively flat over the next decade.
Now here’s the kicker – this small increase in estimated long-term
interest rates has the effect of TRIPLING the interest payable on debt
outstanding.
Which should lead everyone to ask; what happens if interest rates rise
faster and higher than expected?
The answer will be a complete surprise to many.
When one combines this perspective with the fact that global interest
February 2019 The Surprise Party
Item 2018 2028 % Change
Gross Federal Debt (billions) 21,461$ 32,588$ 52%
Average Interest Rate on Debt Held by the Public 2.3% 3.5% 47%
Net Interest (billions) 325$ 876$ 170%
Source: CBO, IceCap Asset Management Limited
www.IceCapAssetManagement.com
19. 17
USD Rules
Our Strategy
Bonds
No changes. Our primary concern remains focused on the probability
of long-term rates surging due to re-escalation of sovereign debt
crises. We see emerging market debt, and high yield as being
especially vulnerable.
Stocks
We continue to have significant allocations to equities. Yet retesting
the recent December lows is possible. Currently, we do not have a
strong expectation in either direction. Technically, we are remaining
neutral for now.
Currencies
Despite the plethora of fundamental bad news for the US Dollar – it
continues to remain strong. We continue to hold a very favourable
view towards USD over all other currencies.
Commodities
We have no positions in oil or gold at this time. Gold has rallied off
recent lows which is absolutely encouraging. However, for us to
become structurally bullish on gold, we need to see it break through
several resistance levels and withstand an initial surge from the USD.
As always, we’d be pleased to speak with anyone about our
investment views. We also encourage our readers to share our global
market outlook with those who they think may find it of interest.
Keith earned the Chartered Financial Analyst (CFA) designation in 1998
and is a member of the Chartered Financial Analysts Institute. He has
been recognized by the CFA Institute, RealVision, MacroVoices,
Reuters, Bloomberg, BNN and the Globe & Mail for his views on global
macro investment strategies. He is a frequent speaker on the
challenges and opportunities facing investors today, and is available to
present to groups of any size.
Our Team:
Keith Dicker: keithdicker@IceCapAssetManagement.com
John Corney: johncorney@IceCapAssetManagement.com
Haakon Pedersen: haakonpedersen@IceCapAssetManagement.com
Andrew Feader: andrewfeader@IceCapAssetManagement.com
Conor Demone: ConorDemone@IceCapAssetManagement.com
Keith Dicker, CFA founded IceCap Asset
Management Limited in 2010 and is the Chief
Investment Officer. He has over 25 years of
investment experience, covering multi asset class
strategies including equities, fixed income,
commodities & currencies.
February 2019 The Surprise Party
www.IceCapAssetManagement.com