Well, despite a few distracting shoots sent by the Bulls to ease the current pessimistic scenario, the fact of the matter is economy around the world are on an edge, they just need a little push to fall into a recession period, like Germany, given that the euro area largest economy lost 0.1% in the second quarter, to an annual average growth of 0.4%. Yes, the U.S is still adding decent gains in its economic output over 2%, but that can change really quick if consumer sentiment is affected by a stock market correction.
I call your attention to Gold. The precious metal hasn’t been a safe-haven asset since the debt crisis in Euro back in 2011/12, with a little uptick in 2016, when Wall Street corrected, but nothing else until now. Gold is going strong reaching levels not seen since March 2013, which for me it’s an important signal that the U.S sovereign debt yields inversion is not a dry power shoot. That doesn’t mean a recession is going to happen this year, usually, it takes 18 months or just enough to occur after the U.S presidential election, but no matter how long it takes, it’s almost certain that it will happen, we are in the end zone.
Photo by Samuel Zeller.
