Stagflation 2.0

OpinioPro Selection
By August 2, 2022 14:26

Stagflation 2.0

Introduction: of Wolves and Bears

“To ignore the warning signs and continue with the strategies of the past is to ignore the third, crucial cry of wolf.”

Key Takeaways

  • In our special analysis from the fall of 2020, "The Boy Who Cried Wolf", we warned urgently of the underestimated danger of high inflation. The wolf is now here to stay. The war in Ukraine is exacerbating the inflation dynamic.
  • The intractability of supply chain issues, the cost of sanctions, tighter monetary policy, and deglobalization are now bringing the recession bear to the table alongside the wolf.
  • The majority of investors have been caught on the wrong foot by entering the inflationary environment. Balanced portfolios have been suffering heavy losses so far this year.
  • In addition to de-globalization and decarbonization, there are a number of other structural reasons that argue for a longer-term stagflationary environment in which multiple waves of inflation are likely to occur.
  • The freezing of Russian foreign exchange reserves and the new geopolitical realities make gold increasingly attractive as a neutral international reserve asset.

OpinioPro Selection
By August 2, 2022 14:26

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