In a recent episode of Palisades Gold Radio, host Tom Bodrovics welcomed back Julian Brigden, co-founder of Macro Intelligence 2 Partners, to discuss the current economic condition often referred to as ‘macro purgatory.’ Brigden warned of an impending recession following a tightening cycle, with only an 8-10% chance of a soft landing.
Brigden emphasized the importance of employment data, particularly unemployment rates, which have often preceded a recession. He cautioned that significant rises in unemployment could cause bond markets to rally, while equities weaken. The Fed’s efforts to combat inflation have been complicated by the actions of the Treasury and Janet Yellen, who have counteracted their efforts, further muddying the waters.
Brigden also discussed his perspective on inflation trajectory over the last few years. He identified several significant factors, including the breakdown of globalization, a resurgence of the cold war, demographic changes, and the impact of C---D-19. Despite falling goods inflation, core services remain high. Brigden noted that if core service inflation does not decrease significantly, it could indicate weakening wages, potentially sending recessionary signals, even if overall inflation rates are falling.
The Fed’s challenge in making monetary policy decisions due to lagging and imperfect metrics like employment data, GDP, and CPI are well-known. Despite this, Brigden expressed optimism about precious metals as a potential investment during this economic period. Shifting investment strategies towards precious metals could be beneficial, particularly when recognizing market weakness and the Fed’s response.
Brigden also touched upon historical trends of investors being fully invested during strong markets, leading to a lack of liquidity during downturns. The impact on bond yields when the Fed inevitably intervenes could also be significant.
Finally, Brigden addressed potential geopolitical risks, including uncertainty surrounding the next U.S. presidency. While the economic future is uncertain, focusing on employment data and recognizing the potential impacts of a tightening cycle are crucial.
In summary, while there are undoubtedly challenges ahead, being aware of employment data and potential market shifts, particularly towards precious metals, could be essential in navigating the current economic condition.
______________________________________________________
If you wish to contact the author of a post, you can send us an email at voyagesoflight@gmail.com and we’ll forward your request to the author (if available). If you have any questions about a post or the website, you may also forward your questions and concerns to the same email address.
______________________________________________________
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © Dinar Chronicles
Advertisement
______________________________________________________
