Time Past & Time Future.
What this piece discusses: Why markets are where they are - across all categories? Six drivers are isolated. Can what got us here take us further? What would have to happen for that be our fate? What do consensus forecast expect for 2025? What are the major risk factors that work against consensus being the outcome?
Six risk factors are analysed:
- Sustainability of the. 6 equity market drivers of 2025?
- "The New Cold War" - the internationalisation of the Renminbi and the dethroning of the US$ as global transaction & reserve currency
- What would be the economic damage from the waning of the Non-Bank Financial Credit and AI credit and asset bubbles?
- The economic and risk effects of the end of the Transatlantic Alliance - now the Entente Inimicale!
- Japan as a new locus of risk - the unsustainable fiscal arithmetic and the confrontation with China.
- "The New Global Disorder" as the Alliance of Dictators and Dictator Wannabes seek and fail to impose spheres of influence.
There are a bunch of winners: China (equities & the RMB); Asian assets (India and SE Asian equities) and Gold (demand driven by internationalisation of the RMB). Finally, there are safe haven commodities like energy and copper and strategic metals, like Lithium (if you can find them).
And there are big losers: US assets (bonds, equities & the US$); European assets (except defence & nuclear) and the Euro. Global equities are likely to fall 20-30% and stay down.
End