stimulus

“When all the experts and forecasts agree — something else is going to happen”, Bob Farrell

At the beginning of the year, “everyone knew” that inflation was about to take off, and that the US$ was going to collapse. Last week, the great Bob Farrell’s Rule No 9 proved its worth, yet again. US interest rates fell sharply and the US$ bottomed for this cycle. The two charts above tell the

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Pandemic leads to ‘baby bust’ as births decline in most countries

A year ago, many were suggesting the lockdowns might produce a “baby boom” as couples spent more time together. But early data suggests the world is instead seeing a “baby bust”. As Nikkei Asia reports: “Births (in December/January) have fallen between 10% and 20% in such countries as Japan, France and Spain — and even

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Americans hunker down on spending as the pandemic’s impact continues

US stock markets have been hitting new records recently, as investors swoon over the likelihood that the $1400 stimulus payments will power a major surge in consumer spending. But unfortunately, the facts show this is most unlikely. The chart from the New York Federal Reserve measures consumers’ intentions with regards to the 3 stimulus cheques

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China’s dual circulation policy aims to reduce debt reliance

Every now and then, people wake up to the fact that debt is only good news when it adds to growth. Otherwise, it simply destroys value. China is usually the case study for this analysis, as the chart confirms. It shows the rise in debt from 2002, when official data begins, versus the rise in

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Rising US interest rates, US$ and oil prices set to pressure financial markets

Everyone who has ever played the Beer Distribution Game on a training course knows what is happening in supply chains today. A small increase in underlying demand is rapidly leading to a massive increase in ‘apparent demand’. As the New York Times reports, “the pandemic has disrupted every stage of the (supply chain) journey.”  And

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Chart of the Year – CAPE Index signals negative S&P 500 returns to 2030

Each year, it seems there is only one candidate for Chart of the Year. And 2020 is no exception. It has to be the CAPE Index developed by Nobel Prize winner, Prof Robert Shiller.  As the chart shows, it is nearly at an all-time high with Tesla’s addition to the S&P 500. Only the peak

OPEC set to lose out as Biden, EU and China focus on Climate Change opportunities

OPEC used to dominate global oil markets. In the early 1980s, there was even talk of another OPEC cartel to control gas prices. But those days are long gone.  Instead OPEC members such as the UAE are increasingly aware they have only a limited time left to monetise their vast reserves of fossil fuels. This is

Oil prices signal potential end to the V-shaped recovery myth

Oil prices have moved into another ‘flag shape’ – which previously provided critical warning of the March collapse, and of those in 2014 and 2008. The shape is important as it means the bulls and bears have been battling each other to exhaustion, making it likely one or the other will give up. This time,

Bankruptcies now the key risk as hopes for V-shaped recovery disappear

Governments, financial markets and central banks all originally assumed the Covid-19 pandemic would be over in a few days or weeks. But it is now clear they were wrong. And unfortunately, there is little sign of a Plan B emerging. The idea was that consumers would have plenty of money in their pockets after the