Showing posts with label USD. Show all posts
Showing posts with label USD. Show all posts

Wednesday, April 2, 2025

Red Alert: Is the US Economy Headed for a Devastating Recession?

1. Stock markets are facing significant uncertainty. US stocks ended last week with a 2% decline. Goldman Sachs has assigned a 35% chance of a US recession within the next 12 months. The firm has also officially reduced its S&P 500 forecasts, citing the impact of higher tariffs and increasing recession risks.


2. The trade deficit reached unprecedented levels in February, ballooning to $147.9 billion. January's revised deficit also soared to $153.3 billion. This surge is primarily due to a significant increase in imports of industrial supplies, such as oil, liquefied natural gas (LNG), gold, and steel, as producers prepare for an extended trade war.


3. The financial storm is intensifying. Since January 31st, the S&P 500 and the US Dollar index have dropped by 6.5% and 3.5%, respectively. This is a rare occurrence, as the last time both stocks and the Dollar fell in tandem by such a significant margin was in 2008.


4. The US stock market is experiencing historically unprecedented concentration levels, surpassing even the intense frenzy of the 2000 Dot-Com Bubble. The top 10 stocks now make up 36% of the S&P 500, approaching an all-time high.


5. Gold is gaining attention as a safe haven. According to Bank of America, 58% of fund managers believe gold performs best during a trade war. Over the past 12 months, $7 trillion has been added to gold's market capitalization, signaling significant economic uncertainty.


6. The Congressional Budget Office (CBO) has issued a concerning forecast regarding the US debt. Federal deficits are expected to rise from 6.2% of GDP in 2025 to 7.3% by 2055. Public debt is projected to surge dramatically, growing from 100% of GDP in 2025 to a staggering 156% by 2055.


7. The yield curve typically shows higher yields on long-term US bonds compared to short-term bonds, reflecting the greater risk associated with lending money over a longer period. However, the US is currently experiencing an inversion of the curve, a historical pattern that has reliably preceded past recessions.


8. By February 2025, the U3 unemployment rate is projected to be 4.1%, while the U6 unemployment rate is expected to be 8.0%. Peter Schiff argues that the U3 rate appears low because it doesn't account for millions of unemployed individuals who aren't included in the official statistics. According to him, the US systematically hides the true extent of unemployment.


9. If Trump were to escalate with tariffs, the impact on complex supply chains could be significant. Cars, for example, could see an additional $12,200 in costs due to tariffs, particularly those with parts from Canada or Mexico, which would face the steepest increases. Additionally, domestically produced goods that rely on imported materials would incur hidden tariff costs, further adding to the economic burden.


 

» China is crushing the US in the technological innovation race. China’s economic model is superior to America’s. Chinese companies reinvest their profits into expanding production, employment, research, and development, while US companies reinvest their profits into stock buybacks. « — Prof. Michael Hudson, November 21, 2024.
 
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Monday, March 17, 2025

Ahead of Iran War, Capital Flows Flee the US and Europe | Martin Armstrong

Comment by EKL: Your computer model tracks capital flows, [...] capital is being withdrawn globally in preparation for war. We could not make decisions in our boardroom without consulting Socrates anymore. It is unbiased and that is the most valuable asset in times of such uncertainty. God bless.

Martin Armstrong's Socrates Daily Global Capital Flows Heat Map as of March 17, 2025.
 » From about May 15th on, Europe is going into war, Europe will lose, and the Euro will become extinct. «
Martin Armstrong, March 1, 2025.

Reply by Martin Armstrong: Yes, you are correct. We are witnessing capital contracting in both the United States and Europe. It is even leaving Canada and Mexico. 

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Friday, March 14, 2025

The ‘Mar-a-Lago Accord’ Chatter Is Getting Wall Street’s Attention | Jim Bianco

It might sound too extreme to even consider, but the idea that President Donald Trump could force some of the US's foreign creditors to swap their Treasuries for "zero-coupon" bonds—in other words, zero-interest bonds that do not mature for a century—in order to lighten the nation’s debt load is being taken seriously by some.

That’s exactly what Jim Bianco guided his clients to discuss after rumors of a so-called "Mar-a-Lago Accord" began to spread. To be clear, Bianco doesn’t anticipate this happening soon, if ever. But in many ways, that’s beside the point. Trump, Bianco said, could very well disrupt the entire global financial system within the next four years, and Wall Street needs to be ready for that.

 A User’s Guide to Restructuring the Global Trading System, Stephen Miran, November 2024.

Bianco, a market veteran with over 30 years of experience and founder of Bianco Research, explained that restructuring America’s debt is part of the Trump administration’s broader plan to overhaul global trade through tariffs, weaken the dollar, and reduce borrowing costs—all with the goal of making US industries more competitive on the world stage. Other pieces of the plan include setting up a sovereign wealth fund (which Trump has already started) and pressuring US allies to contribute more to defense spending.

“You have to start thinking big and you have to start thinking bold about what is going on here. The Mar-a-Lago Accord is not actually a thing, it’s a concept. It is a plan to basically remake some of the financial system.”

 
The term “Mar-a-Lago Accord” is a play on the 1985 Plaza Accord and the 1944 Bretton Woods Agreement—two major agreements that shaped the modern global economic system, each named after the locations where they were negotiated.

Many of the ideas behind this agenda stem from a November 2024 paper by Stephen Miran, Trump’s nominee to lead the White House Council of Economic Advisers. In it, the former Treasury official proposed a strategy for reforming the global trading system and addressing economic imbalances caused by the “persistent dollar overvaluation.” The paper also highlighted that President Trump has long been focused on putting American industries on a fairer playing field globally.

» Everything that President Trump’s administration is doing will be disinflationary. «
US Treasury Secretary Scott Bessent, February 20, 2025.
 
Bianco noted that this vision doesn’t necessarily clash with Treasury Secretary Scott Bessent’s statement that “the US still has a strong dollar policy.” This is because, while the US may aim for a weaker trade-weighted dollar (which measures the dollar’s value against that of its trading partners) to narrow the trade deficit, financial indicators of the dollar, such as the Bloomberg Dollar Spot Index, could still rise. 

“Stephen Miran and Scott Bessent seem to be kind of singing from the same hymn sheet. The whole idea hopefully is lower the value of the dollar, lower the value of interest rates, bring down the debt burden in the country. And that’s what they’re trying to do.”

» Scott Bessent is one of the most powerful champions of the US deep state. He is the real gladiator behind Trump 2.0,
not Elon Musk. His role will be crucial in keeping the US empire alive. Bessent is extremely intelligent and capable.
Bessent’s capabilities go beyond what most people can imagine. He possesses a deep understanding of monetary, currency,
and financial systems—and, more importantly, he has real-world combat experience in financial warfare. He is a genius.
But like everyone, Bessent also has his flaws. People like him, who are highly capable and self-confident,
often don’t hide their moves or intentions. «
 
Bianco, echoing Miran’s paper, also referenced former Credit Suisse strategist Zoltan Pozsar, who has long argued for a “Bretton Woods III” overhaul as part of his theory that the dollar will play a less dominant role in global finance in the coming decades. One of Pozsar’s central ideas is that other countries should pay more for the security and stability provided by the US. One potential way to do this is by swapping some of their Treasuries for 100-year, non-tradable zero-coupon bonds. If these nations needed immediate access to funds, the Federal Reserve could make it temporarily available to them via a lending facility.

Bianco emphasized that such a debt swap may never actually happen, and if it were pursued, it would require extensive international cooperation and could potentially destabilize the global financial system. However, bond markets have shown little concern so far, with Treasury trading remaining relatively calm in recent days. Still, Bianco’s point in discussing these ideas with his clients is to highlight the magnitude of the potential changes ahead.

“Take them seriously, don’t take it literally. If Trump is willing to blow up NATO, why wouldn’t he be willing to blow up the financial system?”

Reference:
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Monday, March 3, 2025

Europe Will Go to War, Lose, and Euro Will Become Extinct | Martin Armstrong

It looks like every country in Europe is backing more war in Ukraine. And now, there is renewed talk of an EU army. Martin Armstrong says:

"Why? Because they all are facing the collapse of the European Union. The debt is just unbelievable. They never consolidated. Between Covid, Climate Change and sanctions on Russia, the German economy has shrunk 3% to 5%. The economic growth of the EU is appalling. Europe is falling, and this is why they need war. So, they are backing Zelensky.”

 UK Prime Minister Keir Starmer's ‘coalition of the willing’, March 2, 2025:
European NATO members desperately want World War 3 with Russia, and the US to help them.
Most, if not all, in this group photo would be ideal candidates to be hanged or shot 
as fanatical and ruthless war criminals in the forthcoming Nuremberg Trials 2.0.
 
In a new report on March 2nd, Armstrong lays out the case why war in Europe is coming and coming soon:

“In this report, I gathered a bunch of headlines:  London Financial Times, what’s the headline?  ‘America is Now the Enemy of the West.’ This is why Trump is saying ‘We are out.’  Zelensky has admitted that 58% of the $350 billion the US gave him is missing.  You cut the funding, and you are going to find out the truth. Trump should cut every single penny. Bring it all out. Zelensky is counting on Europe to replace the United States. This is why he’s so arrogant [...] Trump should get the hell out of NATO–as soon as possible.”

 » Trump should get the US out of NATO asap. From about May 15th on, Europe is going into war, Europe will lose, gold is coming
to America, the US dollar is not collapsing anytime soon, the Euro will become extinct, Ukraine is going dead. That's it. « 
Martin Armstrong, March 1, 2025.

So, why are all these reports coming out in the last few months about gold coming to America from Europe? Armstrong says, “Last week, I was on the phone, and I can’t tell you how much, but when you are about to go into war, capital moves. [...] Right now, I am concerned from about May 15th on. [...] Our computer “Socrates” says Europe is going into war, and I put it into this report, Europe will lose. [...] This is why the gold is coming to America.”


Armstrong also contends you can forget about predictions of the US dollar collapsing anytime soon - it won’t. Armstrong says, “The Euro will become extinct.” Armstrong also predicts, “I published what the computer “Socrates” put out on Ukraine. It’s a flatline, and I have never seen that on any other country. It’s a flatline. It’s going dead. That’s it.”

 
Martin Armstrong (March 4, 2025): » We must get out of NATO. «
 
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Sunday, February 9, 2025

China Already Won the Next Trade War with the US | Keyu Jin

Keyu Jin, a Harvard-educated professor from the London School of Economics, is one of the world’s leading insiders into the Chinese economy. She lays out the exact reasons why China is entering this next trade war with the US from a position of strength. China embraces strategic long-term planning, and when Donald Trump launched his first trade war against China back in 2018, the Chinese learned a valuable lesson: Never be too reliant on your main trading partner. China has long been preparing for reduced exposure to the US, diversifying in all aspects—not just in terms of trading partners and investment, but also in digital currencies and payment systems.  
 
 » Never be too reliant on your main trading partner. Diversify.
Don't be at the mercy of the dollar, nor the US financial system. «
 
Over the past seven years, China has strategically developed key industries that are set to dominate the future of our world: AI, quantum computing, blockchain, e-commerce, EVs, 5G networks, biotechnology and pharmaceuticals, materials science and nanotechnology, advanced manufacturing, 3D printing, robotics, space exploration, high-speed rail, advanced transportation and urban technologies, green technologies, agri-tech, and geoengineering—mirroring the complete technocratic Fourth Industrial Revolution agenda of the World Economic Forum. At Davos, Professor Jin explains how this shift has transformed the global economy:
 
"If you look at industries like electric vehicles (EVs) and solar panels—what they call new productive forces—very little of it is actually going to the US. This shift has pushed China to embrace new opportunities, sign new trade deals, and establish new trading partners. Global trade has actually expanded, and China's position in the world as a share of global exports has risen, while the US's has declined. So, while the US is retreating, China is opening up as much as possible. This is why Premier Li Keqiang (2013-2023) has repeatedly said China will unilaterally open up, offering zero tariffs to the least developed countries. We should not underestimate the degree and pace of fragmentation that is happening—multipolarity and the rise of economic blocs. We are already seeing the data, whether it's investment or trade, regarding the interaction between non-aligned blocs and aligned blocs. If you go around the world, asking the likes of Brazil or Asian countries, what are they saying? The same thing: Diversify. Don't be at the mercy of the dollar, nor the US financial system."

China halted exports of several rare minerals, including gallium, germanium, antimony, and superhard
materials to the US, citing their dual military and civilian uses. In response to a 10 percent levy
on Chinese goods, China also imposed a 15 percent tariff on US imports of coal and LNG.
 
This cannot be overstated. All of these new industries in which China is leading—electric vehicles, solar panels, and high-speed rail—are mostly not going to the United States. In the US you won’t see a single Chinese EV on the road. But in places like Thailand, Australia, and Brazil, Chinese automakers are dominating the market. Look at the top 20 fastest-growing economies on earth: Every single one of them is in the Global South—in the Middle East, North Africa, Asia Pacific, and Sub-Saharan Africa. Meanwhile, not a single American or European country is on that list. Many Western economies are stuck with zero to 3% growth, teetering on the edge of recession. And who is the number one trading partner for every single one of these rising economies? China. China hasn’t just dominated the fastest-growing regions; it has become the largest trading partner for the majority of the world. That’s why China can withstand this tariff war far better than the US.

» DeepSeek R1 is AI's Sputnik moment. «
Marc Andreessen, January 26, 2025.

Simply put: China has a plethora of options. But it doesn’t stop there. It’s not just about who is growing; it's also about who is declining. Western economies are not what they once were. The average American—and European, for that matter—simply doesn't have the same disposable income they did decades ago. And this trend is only worsening. This presents a massive problem for Trump, as his biggest leverage in this trade war is supposed to be the US consumer market. But what happens when that market isn't as powerful as it used to be? That only leaves the industrial sector, where the US is simply no match for China.

» This is China’s, not AI's, “Sputnik moment”. «

At the same time, the United States currently has sanctions on more than a third of the global economy, including 60% of all poor countries. As a Global South country, looking at who to trade with, it’s a no-brainer: China is clearly the better partner. While China has been building bridges and securing trade deals, Trump has been doing the exact opposite—taxing his closest allies. Under his administration, every country or region that has a trade surplus with the United States is now a target. The message is clear: If your country sells more goods to the US than the US sells to yours, you have two options: either relocate your industries to the US or face trade tariffs. Even Canada—one of the United States' closest allies and neighbor—was hit with 25% tariffs before Trump saw the stock market crash and quickly announced a 30-day pause to give time for Canada to negotiate. What Trump will do with the rest of the world has yet to be seen, but one thing is for certain: other countries aren't waiting around to find out. Every major economy is scrambling to diversify and find alternatives to US trade dependence.

» 2025 is the year when the investment community realizes that China is surpassing the rest of the world. «
Deutsche Bank, February 05, 2025.
 
While the US falters and the EU looks for an economic lifeline, Asia has firmly established itself as the center of global economic growth, with China at the helm as the undisputed economic superpower. China now accounts for more than 30% of the world’s total manufacturing output. China has completely leapfrogged the rest of the world in producing sophisticated industrial goods at a scale and cost that no Western country can compete with. 
 
Looking west, the Persian Gulf nations—Saudi Arabia, the UAE, and others—have also begun prioritizing their relationships with China and India. Why? Energy. Asia now accounts for over 70% of total oil and gas exports from the Gulf. This energy trade, combined with the region's critical position along the New Silk Road connecting China to Europe, has turned the Middle East into one of the biggest beneficiaries of this new global economic order. 
 
» I expect a sharp recovery in China’s economy in the latter half of 2025, boosting global performance. «
Simon Hunt, January 11, 2025.
 
The global landscape is quickly changing. One of the fastest-growing economic blocs is ASEAN—the Southeast Asian powerhouse economies of Vietnam, Thailand, Indonesia, and Malaysia. These countries are crucial for China’s future success. The biggest changes in trade can be seen in Asia. Nearly 60% of Asia's trade happens within the region, and half of the world’s fastest-growing trade corridors are there. In 2023, China's exports to ASEAN nations bypassed those from the United States. And with a majority of these countries either already in BRICS or set to join, these trade relationships will only deepen.

 
 » The supreme art of war is to subdue the enemy without fighting. « 
Sun Tzu, The Art of War, 5th century BC.

 
 » Americans are not known to like Chinese, nor are they known to like Muslims.
But somehow they like Chinese Muslims a lot. «
Former Foreign Minister of Singapore, George Yeo, on the Xinjiang Uyghur issue, May 23, 2023.

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Saturday, February 1, 2025

Trump and Stockholm Syndrome: In a Captured State | Steve Brown

The current reverence for Donald Trump as potential savior of the Western world is like a twisted version of Stockholm Syndrome. The Biden regime was so vile and so corrupt, that the manifestation of Trump (since his election) seems like a life raft thrown to a drowning person. In other words, the US situation is so hopeless that any sort of hope from anywhere must look good to the average US American now.
 
» A Western financial system built on bullshit and fake industry. «
 
Trump is, of course, beholden to his donor class. It is a donor class where unsavory ‘trillionaires’ like Zuckerberg, Bezos, and their Wall Street moguls (including the banks) have ‘switched sides’ to back the Trump regime. And well, that is the mantle of power. Trump’s backers preside over war, mayhem, and death all over the globe with glee – just as Biden’s did. The only question for elites now – whether Democrat or Republican – is  how affordable this ongoing destruction may be.
 
The great debacle for the former United States is that its political leadership has failed — meaning both parties — and the Wall Street model of leveraged graft, theft, corruption, and greed has eventually devolved into a Western financial system built on bullshit and fake industry — which Pepe Escobar calls ‘casino capitalism.’ That devolution has now become apparent to the entire world. Trump has drawn a veil over donor influence by promoting a populist message of ending the ‘forever wars’ that the US engages in. But ending forever wars is not a goal that the entrenched Military-Industrial Complex (MIC) can allow, even if that is the will of the American people.

 » MAGA in itself is an admission that the US has already failed. «

Thus, Trump has used the immigration issue as cover too, to obfuscate a deeper agenda. That agenda includes confrontation with China, assistance to the Greater Israel project, and accepting advice to leverage crypto as a means to support the lagging primacy of the US dollar. The foregoing agenda will be enforced later during his regime after the dust has settled.

The point is, Trump promised to “make America great again” — which in itself is an admission that the US has already failed and is playing catch-up. China’s success in AI with Deep Seek is just one example. Bottom line, where US America was once about its industry and the ingenuity of its people, due to the criminality of Wall Street and its banks, that dynamic is gone. Ironically, all that remains of US success (as a unipolar hegemon) is the primacy of the US dollar.
 
 And the swamp? Still thriving.
It's a deep swamp, and we are about to learn a lot more than
we ever knew about what horrors lie in the podscum.

US financial markets, including debt instruments, are still the most secure and reliable stash for trillions of US-manufactured Federal Reserve Notes to go. Of course, when those dollar investment vehicles become ignored by the rest of the world, that becomes an issue, and that process is underway. Meanwhile, I stand by my article from 2019, "Trump’s Limited Hangout: Populism Derailed."
 
 Fun Facts 101: The list of names in Jeffrey Epstein’s book of Mossad assets
includes Robert F. Kennedy Jr., Elon Musk, and Donald Trump. 

While the above may seem a bleak message for the West, the bottom line is that the United States has been on the wrong side of history since the end of the Second World War. Only the redeeming asset of the US dollar and Western financial markets have maintained US primacy over these decades.

The hopeful message is that, as the US dollar erodes and eventually US financial markets crash, the Neocons and satanic creatures who have led US foreign policy for eighty years now will finally erode away as well—or at least be marginalized—and that's via their own historic folly, personal excess, and greed.

 
 
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Sunday, January 12, 2025

Markets Amidst Trump 2.0: Geopolitics & Geoeconomics in 2025 | Simon Hunt

In recent years, I have analyzed several long-term cycles, including demographic, economic, weather, war, inflation, and interest rate cycles. To my surprise, they all appear to converge around 2028. While geopolitical tensions will likely remain tense in 2025, the ultimate crisis may emerge as these cycles align.

 Ron William, Development Director of the Foundation for the Study of Cycles (FSC), interviewed
Simon Hunt, CEO of Simon Hunt Strategic Services, on January 11, 2025.

Continuing US Economic Decline and Stock Market Crash by September 2025
The US economy is weaker than portrayed. Employment data, revised down for the first quarter, shows a likely weak second quarter, with retail sales, adjusted for inflation, declining last year. Big US companies will be laying off thousands. The Biden administration has inflated economic indicators, but the reality is far bleaker.

 S&P 500 Bull-Trap Reversal, Rotation Fragility, and Cycle Risk in 2025.

I anticipate a sharp stock market drop by September 2025, with the S&P 500, the NASDAQ and tech stocks (Mag 7) falling by 20% to 40%, respectively. By Q4, Trump’s policies—tax cuts, deregulation—will take effect, and governments will likely respond with fiscal and monetary stimulus. Over the next few years, equity, base metal, and precious metal markets may surge. This will be highly inflationary, possibly mirroring the 1980s, when US CPI surpassed 13% and global inflation hit 15%. The key question will be the impact on long-term bond yields. Bond vigilantes will likely push 10-year US Treasury yields into double digits, with similar trends globally (excluding China), leading to a crash in asset prices, especially in an already highly leveraged system with a 360% debt-to-GDP ratio. 
 
The primary drivers of inflation are excess liquidity and rising wages, along with a trend where a larger share of wages is being allocated to capital on corporate balance sheets. I expect US CPI to remain elevated, with the official CPI possibly reaching 13%, mirroring 1980 levels. However, John Williams of Shadow Government Stats estimates the real CPI averaged 10.8% last year. This persistent inflation will push long-term interest rates into double digits, likely triggering a crash in the debt-laden global system. Comparing current inflation to the 1970s, we see a pattern of volatility, with asset prices potentially deflating before structural inflation resurges, driving CPI to double digits.

Empire Cycle, Risks of War, BRICS, and the Emergence of a Multipolar World Order
Today we have two major powers—one established (US), the other emerging (China)—each with conflicting goals. One seeks to maintain global dominance, while the other rejects that vision. The only resolution could be through a significant crisis, possibly war. Afterward, we might see the emergence of a multipolar world, but this will likely take place in the early to mid-2030s, once we’ve gone through the crisis. The empire cycle, as outlined by voices like Ray Dalio, typically culminates in revolutions, internal conflicts, and proxy wars, followed by political and debt restructuring before a new world order emerges.
 
 Geopolitical tensions will continue to simmer through 2027,
with open conflict likely not breaking out until 2028.

The current geopolitical and geoeconomic picture is shaped by several major cycles: Since 1991, and potentially as far back as 1946, the US has sought to weaken Russia in order to control its vast natural resources. Simultaneously, China has emerged as America’s primary competitor, and to maintain hegemony, the US must constrain its rise. A related theme is Washington’s growing concern over the BRICS nations, which, if they mature into a serious rival, could undermine US dominance, particularly over the dollar. The war in Ukraine and tensions in the Middle East fit into this broader geopolitical strategy. Israel has long served as America’s foothold in the Persian Gulf, and a key aim of Trump’s foreign policy could be to disrupt the China-Russia alliance while isolating Iran, given their strong ties. The US has already made progress in Brazil, where key ministries are anti-BRICS and pro-Washington, with President Lula aware of the risks of opposing the US. Despite potential challenges for BRICS under Brazil’s leadership, the group’s recent expansion with Indonesia’s full membership is a significant shift, especially in South Asia.

Geopolitical concerns are at the forefront for many investors, and they’re my primary worry. It’s not a matter of if war will happen, but when. Geopolitical tensions will continue to simmer through 2027, with open conflict likely not breaking out until 2028, though this is my best-case scenario. In the worst-case scenario, Israel, after defeating Hamas and Hezbollah, may decide to attack Iran. In response, Iran would retaliate with overwhelming force, using advanced missile technology, including hypersonic missiles, capable of bypassing Israeli and US defense systems. While the risk of war is high before 2028, I believe open conflict will likely occur no sooner than then.
 
Weather Cycles, Severe Drought in the US in 2025, and Global Food Supply Shortages by 2026
However, one cycle that remains largely unaddressed but could disrupt Trump’s domestic agenda is the weather cycle. This cycle, particularly the Gleissberg cycle, a 90-year pattern, is aligning with US drought cycles for the first time since the 1930s. This could mirror the impact of the Dust Bowl. As the cycle begins to take effect this year, reports from areas like Pennsylvania indicate food shortages—beef and chicken in particular—which could drive soaring food prices by 2026. This will pose significant challenges for Trump’s efforts to regenerate America, especially considering the global nature of this issue, as the US is a major food exporter.

Shawn Hackett on weather cycles, their relationship to price action in agricultural commodities,
and the potential for a major drought in the US in 2025 based on the 89-year Gleissberg cycle. (see also [HERE])

The weather disruptions are linked to a shift in the Atlantic Ocean’s cycle, transitioning from a 40-year warming phase to a cooling phase starting in 2025. Historical parallels show that this cooling period could cause extreme weather, including shorter growing seasons and disrupted food production. Additionally, the Sun’s quiet phase, along with the 60-year Yoshimura planetary temperature cycle and the 90-year Gleissberg cycle, will likely exacerbate these effects, creating a pattern of climate instability not seen since the early 1600s. This emerging cycle, largely overlooked, could lead to global food supply shortages and soaring food prices, impacting markets, debt, and interest rates.

Two-Year Commodity Boom: Rising Food, Crude Oil, Copper, and Gold Prices
Food prices are expected to rise sharply, and by 2026, oil prices are likely to increase despite efforts by President Trump. Disruptions, such as sanctions on Iran, could lead to China sourcing oil from Russia instead. By 2028, oil prices could surpass $150. Once inflation cycles begin, they often become self-perpetuating as people hedge by buying in advance and companies stockpile goods. For example, copper prices could double from $7,000 to $14,000 by late 2027, reflecting the inflationary dynamics at play.
 
While commodities are underperforming equities, they are relatively cheap and primed for a rebound, especially with inflationary pressures. Precious metals have already shown strength, and sectors like energy and food may follow, particularly if weather disruptions occur. Although we won't enter a supercycle until the early 2030s, we could see a two-year commodity boom. This period will set the stage for a return to 4% global GDP growth, marking the true supercycle.

 Although we won't enter a Commodity Supercycle until the early 2030s, 
we could see a two-year commodity boom.

Gold had a remarkable 40% rise last year, signaling inflation concerns and currency instability. Central banks are diversifying into tangible assets like gold, and both China and Russia hold significant, underreported gold reserves. If China’s currency faces pressure, it could announce gold backing, possibly from its 25,000 tons of gold. Russia holds about 12,000 tons. The BRICS nations may also introduce a gold-backed currency in the next five years, further driving gold's upward trajectory over the next decade.

US Dollar Index (DXY) Decline to 0.90 by the End of 2025, and as Low as 0.65 by 2028
The dollar, often referred to as the "king of currencies," is expected to peak around 110 on the dollar index in the coming months before beginning a decline. By the end of 2025, it may hover closer to 0.90, and by 2026, closer to 0.80. By 2028, the dollar could fall as low as 0.65, marking a substantial decline ahead. Policies such as trade tariffs could impact the dollar, with some close to the Trump camp suggesting he may favor a weaker dollar to boost exports. However, the broader trend is clear: increasing trade among BRICS nations, excluding the dollar, will reduce demand for the currency.

China's Economic Recovery in 2025 and Bull Market into 2028
Despite recent challenges, the Chinese equity market has surged, suggesting potential for an inflection point. A key shift in China is the transition to collective decision-making, moving away from President Xi’s sole influence, likely driving fiscal and monetary expansion. I expect a sharp recovery in China’s economy in the latter half of 2025, boosting global performance. The Shanghai Composite will likely mirror global market trends—approaching a peak, followed by a correction, and then a bull market into 2028. Despite negative narratives, China’s consumer spending is up 10%, and the property market appears to be bottoming out. Consumption patterns are shifting, but not necessarily unfavorably.
 
 
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