Let’s assume the US Debt crisis is averted. What comes next? A full-on speculative bubble and hype around Artificial Intelligence is underway. How will AI influence trading strategies, or turn markets into gray-goo? Will AI trading prove to be little more than finding new innovative ways to relieve retail investors of their money?
AI has become the markets new, new thang/bubble as investors pile into the new, new narrative forgetting the fundamental rules of investment are about generating dull, boring, predictable returns which look frothy in hot stocks, negative yields in bonds, thus positive returns from real assets stand out!
Yesterday’s UK inflation numbers hint the Bank doesn’t understand the modern drivers of inflation or how to address them. It leaves some stark likely outcomes: stagflation or a Reflationary Death Scramble. Neither are good.
There is a myth BRICS nations now exceed the GDP of the G7 West. It’s propaganda to boost a story of de-dollarisation, anti-G7 rhetoric and how China and its allies will create a stronger, more equal global market. It’s like watching Stags fight for dominance.
Markets remain obscure and uncertain, but the UK’s virtuous sovereign trinity and financial exceptionalism is at stake as political graft mounts and a previous financial scandal comes back as a new one – the Libor Scandal needs investigation.
- Blain’s Morning Porridge, Artificial Intelligence, Bonds, Businesses, Capitalism, central banks, China, corporate debt, Currencies, Debt, deflationary bust, distortion, Economy, Energy, food, geopolitics, Green Energy, Inflation, Investing, Megatrends, Political risk, Recession, stagflation, Supply Chains
Markets are focused on the immediate debt-ceiling crisis, and the short-term game of guessing rates vs inflation. Down the line are the bigger challenges of the medium and long-term: issues we need to be investing in now to garner long-run returns or just to survive!
Two parts this morning: What the Bank of England actually said, and The Big Lesson from the Ukraine War is simple: “Things are seldom as bad as we fear, but never as good as we hope.” Global geopolitics and markets have taken a knock, but will coalesce around whatever new global links emerge.
- Blain’s Morning Porridge, Air Travel, Apple, Banks, Bitcoin, Boeing, Capitalism, central banks, cryptocurrencies, deflationary bust, Inflation, stagflation
What does £5.40 a coffee tell us about the economy? That inflation is sticky. Do we face a stagflationary bust or a reflationary boom? Either will mean Central Banks have failed. At the heart of today’s economy are a succession of issues to resolve – not least is the need for a reset on corporate behaviours to drive stable growth.
