Emerging Markets

Currency wars kick off as Japanese yen tumbles to 35-year low; Bank of Japan spends initial $59bn to defend it

This is the 3rd time we have forewarned of an approaching crisis. Both previous times, ahead of the Great Financial Crisis and the Covid pandemic, we were told we “didn’t know what we were talking about”. And nobody did anything to avoid the looming disaster Let’s hope its “3rd time lucky” and that “this time is different”.

Currency wars kick off as Japanese yen tumbles to 35-year low; Bank of Japan spends initial $59bn to defend it Read More

Demographics are destiny – and today’s ageing populations are creating a “replacement economy”

Demographics are taking demand patterns in completely new directions. Sustaining future growth now depends on successfully developing and implementing new policies, focused on the opportunities offered by the emergence of the Perennials 55+ cohort.

Demographics are destiny – and today’s ageing populations are creating a “replacement economy” Read More

Asia’s debt crisis starts to approach its endgame as the yen continues to tumble

Last week, the Japanese yen fell through the US$ : ¥150 level for the first time since 1990. It has now fallen by nearly 50% against the US$ in the past two years. The currency is behaving as if Japan were a 3rd world country – whereas it is actually the 3rd largest economy in the world. Clearly, something is very wrong.

Asia’s debt crisis starts to approach its endgame as the yen continues to tumble Read More

Asia’s debt crisis edges nearer, as Japan’s interest rates rise and China’s property bubble bursts

Bubbles are great fun while they last. But they are much less fun when they burst. For the past 20 years, central bank stimulus has created some of the largest bubbles ever seen. But now, led by developments in Japan and China, they are bursting

Asia’s debt crisis edges nearer, as Japan’s interest rates rise and China’s property bubble bursts Read More

An Asian debt crisis would shake the global economy, now the ‘Presidential Cycle’ effect is over

The Presidential Cycle is now over. Instead, worries about the recession and the US debt ceiling talks are moving centre-stage. But Asian currency markets are sending a warning signal. A rising US dollar and US interest rates, and a falling yen and yuan, could soon raise the risks of a major Asian debt crisis.

An Asian debt crisis would shake the global economy, now the ‘Presidential Cycle’ effect is over Read More

FT Letters - Jackson Hole comment by Paul Hodges

Today’s financial crisis confirms that “failing to plan, equals planning to fail”

Companies and investors need to invest time now on having a genuine debate about the risks ahead. The regulatory failures of the past few days highlight what can quickly go wrong, if one hasn’t war-gamed out potential risks. As the saying goes, “Failing to plan, equals planning to fail”.

Today’s financial crisis confirms that “failing to plan, equals planning to fail” Read More

Global auto fleet goes electric as “the electrification of everything” begins

The ‘digitalization of everything’ has transformed the global economy over the past 30 years. The rise of the internet is just one example. Now electrification is set to have a  similar impact, starting with the world’s largest manufacturing industry. Fasten your seatbelts for the ride!

Global auto fleet goes electric as “the electrification of everything” begins Read More

“We now understand better how little we understand about inflation”, Jay Powell, US Federal Reserve Chairman

We are facing a perfect storm of global food, energy and financial crises set off by the war in Ukraine.  Analysts need to stop focusing on monetary policy and the inversion of the yield curve. They need to look out of the window and start dealing with the geopolitical reality of Putinflation. 

“We now understand better how little we understand about inflation”, Jay Powell, US Federal Reserve Chairman Read More

Markets will see plenty of rallies, but history suggests the real bottom will be at least 2 years away

The history of the 1929 and 2000 downturns suggests the real pain is yet to come. Housing markets look terribly over-valued around the world, as I noted last month. And US consumer sentiment is at all-time lows. So most company earnings seem set to fall, with more than 60% of US CEOs now expecting to see a recession.

Markets will see plenty of rallies, but history suggests the real bottom will be at least 2 years away Read More

Time for demographics to replace economics, as Evergrande’s default marks the end of the central banks’ debt bubble

It is time for the central banks to give up their outdated economic models, and focus instead on the science of demographics. Their efforts to create economic growth by ‘printing babies’ have simply created a debt bubble. This will likely now burst as Evergrande goes bankrupt.

Time for demographics to replace economics, as Evergrande’s default marks the end of the central banks’ debt bubble Read More