A couple of weeks ago I went to a presentation made by Carmignac and which told us his views on the economy and as mentioned is another of the sources that I trust believes that there will be a relapse in the economy.
For those who do not know Carmignac only comment that it is one of the best managers and has two funds (Patrimonie and Investisment) with over 20 years of experience, which has outperformed its index by more than 5 points per year.
They say that we are in a 3-speed economy:
– The European economy , the slower where this imposing rigorous budgetary expenditure and this emphasis on cutting national deficits to reduce pressure on debt spreads of peripheral countries.
The economies of the euro zone are further apart than ever, with a locomotive (Germany) and several cabooses (Greece, Ireland and Spain) both in terms of growth as consumer spending.
All this will produce:
1) Weak growth.
2) With interest rates low
3) A weak euro.
– The US economy , still pulling strong, although it is not what it was a year ago. Here deleveraging practically just begun, because although both the financial sector, businesses and households have sharply reduced their debts, the state has doubled. Furthermore USA real estate still indoldrums, but at least seemshave made ground.
Unemployment and consumer debt reduction slow consumption growth, resulting in limited growth. It is also a sign of lack of confidence lack of recovery of inventories of producers. However, both industrial activity and exports and business investment, continue to improve smoothly.
all this leads to the following conclusions:
1) The slowdown is a pause midcycle
2) They need a robust world trade
3) Low rates continue.
– Emerging economies , are not under the same pressure as developed countries because their public finances are sanitized.
In the case of China, there are problems in the housing market, although industrial activity remains, this can be seen in wage growth, which is good news. On the other hand, China can grow without exports, relying on domestic consumption.
Regarding Brazil and India see a robust industrial production.
On the other hand the increase in consumer credit and mortgage in these emerging countries has enormous potential due to low starting levels.
This leads them to the following conclusions for emerging countries:
1) The Chinese monetary tightening is coming to an end
2) The internal dynamics of emerging countries continues to improve.
Now let ‘s see what their conclusions on a general level :
1) The economic slowdown in the US has features of a classic mid-cycle pause.
2) The deleveraging effect permanently weighed on growth and price levels in advanced economies
3) The economic standards of developed countries goes through strong emerging economies whose growth is increasingly affecting the rest of the world.
4) The volatility mark this new stage in the global rebalancing.
And this is all a greeting.
although you always say that to invest in a country have to live in the same country, if you jump off that rule,
what country, sector or company you want to invest right now?
complicated but not too deep in response, as a country Brazil for potential and cultural affinity.
Regarding sector, everything about electric cars (batteries, materials, equipment, etc …)
I hope you are right, the euro does nothing but rise against the dollar. I guess that’s weak euro refirirían the intersection € / $, was it? I read the citi market vision and in his opinion it stabilized around 1.30 commented what about it ? I’m interested enough
If they are right or will fail Carmignac, I have only reflected the opinion of these , and personally I have no idea currencies. They said they are very bearish on the € in the medium term, despite recent increases, and if, relate mainly to € / $.
I think the conclusion that it is an economy that is at three speeds is the most successful of the vision they have. And it seems that is a vision of at least the medium term.
Because in the short term, the weak euro is hard to see. And more shocking Moreover, the Chinese economy can grow without exports based on domestic consumption hard to believe when news of the day / week (and see if it is not also the coming months) is the ‘currency war’ and possible consequences in terms of trade, protectionist measures, etc.
things in financial markets change at breakneck speed, 3 months ago the general view was that the euro was going to parity with the $ and now is 1.4 practically. Who knows if in four months it changes again.
I should change. As different governments are reacting, which devalues not directly, take action to weaken its currency or anchor a weaker … except Europe. And Europe can not afford to do without exports to support its weak growth.
It seems to talk about it at the G20 meeting in November. French promise to ‘kick ass’ …
And do not comment anything about the possible hyperinflation?
Let they are saying: Take your euros and emerging buying and if you do it in dollars, better, best …
Thanks Antonio. Of course, I understand that is the opinion of Carmignac. I wondered what they had been told that I have some products in $ and are suffering lately (well, the sufferer me). I look AT only, and is in bearish and bullish primary school (almost 4 months up). The entities that work strike a balance about 1.30; that again 1.30 am content to collect profits and retire
they do not see, actually see more danger in deflation in the developed economies that high inflation
Perhaps because hyperinflation already have had? Or how would you call the decade of inflation with negative real interest? What a financial economy that has come to multiply by 30 the real economy? Like now that money is needed to fill the holes of the mountain of debt that has gotten the world was created. The truth is the only explanation I can find to inject as much money and inflation has not been created.