JP Smith of the IRF is joined by Patrick Perret-Green, the Founder of PPG Macro.
----more----
In this podcast Patrick argues that the impact of the problems in the banking sector is likely to be highly disinflationary as the contraction in credit creation outweighs the creation of money by the US Fed. Whilst the stock of money supply remains extremely high, the flow is contracting at a rate unseen in the lifetime of most market participants.
Moreover, the expectation that high inflation is here to stay has become consensus, partly on the back of aging demographics pushing up consumption relative to savings, a narrative that Patrick does not buy into given Japan's experience over the past thirty years. Given the lags built into the inflation indices, especially with regard to shelter and the prospects for a marked weakening in the labour market as the global economy slows, investors will begin to focus on the secular disinflationary forces.
Outside the US, Patrick is especially concerned about China where the capital-intensive growth model has run out of steam and the money created by the PBOC will be used to prop up the property market and especially the highly indebted local government financing vehicles.
Given this backdrop, Patrick advocates a cautious and pragmatic approach to asset allocation favouring longer dated sovereign credit and equities that offer a defensive earnings profile and sustainable yield. Because of his pessimistic outlook for economic growth, he would underweight cyclical sectors, most commodities and emerging markets, the latter being further penalised by the likelihood of a stronger dollar as part of the global flight to perceived safer havens. Property and private equity are also very vulnerable to the process of price discovery and retrenchment by the banking sector.
“Is An Inflation Regime Change Underway?”, Manoj Pradhan, Talking Heads Macro
"The US Economic, Political and Investment Outlook", David Metzner & Chris Czerwinski, ACG Analytics
"The Politics of Macroeconomic Stabilisation in Argentina; Can President Milei Succeed?", Nicholas Watson, Teneo
"Global Investing at a Time of War", David Murrin, Global Forecaster
“Global Financial Markets: Recent Trends and Future Prospects”, Ron William, RW Advisory
“Sustainable Investment Opportunities and Risks in 2024”, Lenka Martinek, Sustainable Market Strategies
“The Outlook for the US Economy and Financial Markets in 2024”, Brian Pellegrini, Intertemporal Economics
“The Outlook For World Commodity Prices”, Jeffrey Christian, CPM Group
“Latin American Politics: Navigating The Rapids”, Marcos Buscaglia, Alberdi Partners
“Japan: Back in the Big Time?”, Ryoji Musha, Musha Research
“The Global Financial Markets in 2023 and Beyond”, Ron William, RW Advisory
“ESG Investing: Pitfalls and Potential Opportunities”, Lenka Martinek, Sustainable Market Strategies
“A Diabolical Mechanism”, Mark Latham, Commodity Intelligence
“The Outlook for the Turkish Economy and Financial Assets”, Michael Harris, Cribstone Strategic Macro
“US Economic Policy: Teetering on an Inflationary Equilibrium”, Brian Pellegrini, Intertemporal Economics
“The Outlook for the UK and US Economies and Financial Markets”, Helen Thomas, Blonde Money
“Canada: On Course for a Soft Landing in 2023/24?”, Ben Rabidoux, North Cove Advisors
“Navigating the World with an Inverted Yield Curve”, Michael Churchill, Churchill Research
Research and Markets: “Buckle up for an Increase in Volatility”, JP Smith, IRF
Join Podbean Ads Marketplace and connect with engaged listeners.
Advertise Today
Create your
podcast in
minutes
It is Free
The Commercial Edge: Unleash the Power of People
The emPOWERed Half Hour
Aligned Money Show
Dubai Property Podcast
IBKR Podcasts
The Ramsey Show
The Clark Howard Podcast