Monday, 24 December, gold prices on the world market has updated its annual high, rushing towards $ 1270 per Troy ounce. Rising prices due to expectations of a slowdown in the global economy, and the political situation in the United States.
Recall: Saturday, December 22, the U.S. Senate concluded the meeting and not voting for the temporary funding of the Federal government until February 8, 2019. In this regard, from midnight on 22 December in the US was suspended 25% of agencies and about 800 thousand officials. Funding was not approved because Donald trump wanted to contribute to the budget item about the allocation of $ 5.7 billion for the construction of a wall on the border with Mexico. The house of representatives supported this idea, and was rejected by the Senate.
Moreover, according to sources Fox News, to finding a compromise between the White house and the Senate far, so the following discussion of the budget, which will be held in the Senate on December 27, will also be fruitless.
Problematic is the situation in the stock markets. A number of parameters December has already proved to be one of the worst months in the history of trading in the United States. So, Dow Jones and S&P 500 lost nearly 8%, which was the worst dynamics since the great depression in 1931. At the end of the year, the dynamics of these indices may prove to be the worst since 2008, when the American and then global markets were in deep financial crisis.
The evening of 23 December, the Minister of the Treasury Steven Mnuchin phoned the heads of the “Big six” U.S. banks — Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo. As said Mnuchin, “CEOs have confirmed that they have enough liquidity for lending to the consumer and enterprise markets, and other market operations.” “They said that it is not faced with the massive sales of assets or requests additional assets from investors,” — said the head of the U.S. Treasury.
The Minister added that he would hold an emergency meeting headed by the President’s working group on financial markets. Represented managing members of the Federal reserve, the securities and exchange Commission on term and futures trading. The meeting also invited representatives of the office of the Comptroller of the currency and the Federal Deposit insurance Corporation. It is reported that all the key regulators “will discuss coordination with each other to ensure normal operation of the markets.”
Note, according to published 18 December, a joint survey by CNBC and the fed, the probability that in the next 12 months the U.S. economy will enter a recession has increased markedly. If two months ago, this possibility was not excluded 14% of the experts surveyed (more than 40 economists, Fund managers and strategic analysts), and now these 23%, almost a quarter. To poll CNBC/fed it was the highest level during the reign of Donald trump.
In this situation, a growing number of those who are trying to protect themselves from risks, investing in gold, the newspaper notes Investing. In addition, while gold has room to grow — the current price is 4% lower than in January.
What is happening in the US economy, as its inhibition will affect Russia?
— What is happening in the US economy — the alarming signal — the head of a direction “Finance and Economics” Institute of contemporary development Nikita Maslennikov. — Superficially, the situation looks as a chain of purely technical corrections. But it must be noted that the frequency of these corrections increases, and the amplitude drops and hops growing.
In fact, therefore, the markets are showing that, in General, is ripe for a decline. And it is even harder for the news which the markets read as a trigger for a major correction down.
American analysts are certain differences in the estimates of the dynamics of the markets of stocks, bonds, and the yield of government securities of the United States. But in the main estimates agree: the situation is far from blissful. Suffice it to say that 90% of the assets denominated in dollars, will end in 2018 even with a small but negative returns. For understanding: in 2017 the amount of these assets was only 1%.
It is not surprising that in this situation, many indices us platforms show that “stars look down”. As a result, we are seeing a clear and a sharp deterioration in stock exchange indices.
In the end, and 2018 for financial markets unambiguously negative. And this is a clear sign of approaching global recession, and a sign that the peak of the current global economic cycle has been passed in 2018.
“SP”: — How much brake leading economies?
— USA brake until less than other countries. For example, the GDP of the countries “Big twenty” in the third quarter increased on average by 0.8%, while second quarter growth was 1%.
United States show growth in the third quarter at 3.4% of GDP in the second was 3.5%. Thus causing the greatest confidence in the economic model of the largest U.S. banks are predicting growth of America in the fourth quarter by 2.5%. In the end, the whole this year U.S. economic growth will amount to 2.8−2.9% of GDP, and from 2019 is likely to be followed by additional significant decrease.
Brakes and China. This week a number of senior analysts from Commission of the PRC on regulation of and reforms, de facto, stated that the growth of China in 2019 will be in the corridor of 6-6,5% of GDP.
“SP”: — How soon can break out of the global crisis?
— While the situation on world markets is not critical — it does not mean the beginning of the global recession. Up to this point the us economy — in the worst scenario — separate the at least two or three quarters. If the events develop according to the favorable scenario, the recession in USA will move in 2020.
However, markets can be sharply corrected downwards before the start of the real recession: too much negative news now.
“SP”: — What specific news do you mean?
— First of all, “hitting” Donald trump on the fed. Let me remind you, the US President wrote in his Twitter that the only problem of the economy is the Federal reserve. He compared it to a good golfer who has no gift because he can’t score the ball in the hole.
To lunge trump has been supplemented by the partial suspension of the Federal government. Plus we have hearings about forthcoming resignation of the Minister of Finance Steven Mnuchin.
Notice for Russia, his resignation would be extremely negative news. Mnuchin was almost the only serious opponent to the Republican proponents of the new wave of anti-Russian sanctions.
If Mnuchin leave, the probability of introduction of restrictive measures against the Russian state debt will increase dramatically. For foreign investors it is the signal for an early exit from Treasury bonds of the Russian Federation.
Negative markets, oddly enough, puts the trump decision on the withdrawal of American troops from Syria, and the resignation of Secretary of defense James Mattis. Many suspect that the outcome of such actions will be a new US intervention in Syrian Affairs, only much more extensive — and it will require sending to the middle East has 20-30 thousands of American soldiers.
Naturally, markets react to geopolitical uncertainty in one of the most volatile regions of the world. In General, the situation in the markets reminiscent of the end of 2007, beginning of 2008. And then before the crisis, let me remind you, there is just two or three blocks.
“SP”: — in the case of a global recession awaits Russia?
— For us, the situation is compounded by the fact that in the first half of 2019, Russia will face an economic shock of the VAT increase, rising fuel prices, and the likely tightening of sanctions by the United States. It means, the recession in the Russian economy may come even earlier than in the us. And the choice of protective measures in such a situation will require the Kremlin’s political decisions, including a significant weakening of the ruble.
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