Inflation is not economic armageddon, only an economic pest. Anyway, the risk is higher in southeast Asia where 99.9% of oil and gas comes from the Gulf.
AI-bubble is closer to fail to deliver results than replacing people. There is a risk in all the money invested burning up in a giant fire, not in taking our jobs.
US debt is growing, but 1 year of increase wonât change much.
Russia/Ukraine has been dragging since Crimea invasion (2014).
Venezuela is less disrupted than it seems. People was really looking forward to a change.
Greenland was a brain fart
Cuba is alone. It may be a total change for them, but zero impact outside the island.
The only thing I know for sure: I donât know nothing!
Canât remember a moment in my already quite long life that there was no problem, war, inflation, idiots as politicians, stock market crashes and so on. Crisis after crisis after crisis.
My personal and economic life is much better than 40 or 50 years ago. I found peace and while 50 years ago I had to work one week per month without a single Rappen in my pocket my peace of mind when getting older made money find me, not the other way round. It all can be over in the blink of an eye, but like the Spaniards say: âque me quiten lo bailado!â.
I have seen inflation in Venezuela. Just understand that cash is trash (so are bonds) and you are OK. All central banks want inflation because we are stupid and cannot accept lower prices for some things. So, inflation is the only solution and knowing that just donât keep money. It has a state guarantee to lose value.
AI obviously rises productivity in some fields, even it spends lots of energy. Higher productivity was a good thing historically.
US debt and almost all debt, hell, even my debt, is rising. So what, it is just money and cash is trash!
Shadow banking / private credit / private equity showing potential signs of trouble as we had some gating and several frauds. Jury is out as to whether they were isolated exceptions or a signal of more to come
There were, are and will be wars because we are made that way. It is in our genes to kill each other. That is bad, but not an armageddon.
Venezuela, I love that country. Finally Iâll be able to visit again soon.
Greenland? Whatâs that?
Cuba is the last communist bastion, when it falls there will be big business. And I finally will be able to visit. I always thought that I could not during my lifetime.
China? Taiwan? Another war? Letâs hope not, but who knows.
Remember: all may be over in the blink of an eye. So why worry? Nuclear weapon can destroy the complete earth and end humankind just like that. And we cannot do anything against it. Just enjoy while it lasts, that is what I do!
We are so focused internatlonally that we are forgetting the Time Bomb next doorâŚGermany. The AdF is making such inroads there they may bring Scary Times back to Europe.
If there is one thing I hate about me it is my stubbornness. I went to jail in Portugal for âhelping to escape a young man from the Angola warâ (I picked up a hitchhiker), so I said 44 years ago that Iâll never set foot again into that country and I didnât.
I wonât visit Cuba until it is free.
Yep, same in Spain. After 8 years with that liar of a president many want back fascism. And they probably get it, the extreme right will either gain the next elections or at least be the âkingmakerâ as was the extreme left 8 years ago (that was a boomerang that took away the last little bit of civilization politicians still had) . Politicians almost always destroy what can be destroyed.
Not economic armageddon, but this is relevant for Switzerland in general.
We are becoming more expensive. Luckily most of my work is sold in EUR, around 10% in CHF, and 10-20% in USD. But, other people get paid 100% in USD contracts
Whoever gets paid in USD and has to pay workers and suppliers in CHF is not having fun today.
The US dollar has lost 18% relative to the Swiss Franc since Jan 25.
The Swiss Franc is even higher than in the aftermath of the Great Recession (1.24 USD/CHF) when people was literally in panic and thinking about their livesâ decisions.
Please, donât scare me that way! Since the high in 2005 it is 41%. A simple average of 1.95% per year. The interest difference is way higher!
I make only a little bit of CHF, enough to pay tax and health insurance and a bit more. The rest is USD from dividends and capital gains in the stock market. But then for cash flow I have debt in CHF. Short time this is sometimes bad business like last year. But over the long time the cash flow (the saved interest) is higher than the capital loss.
The Swiss Franc is the only currency that did significantly better than the USD since world war I. The other currencies that did not lose a lot against the dollar were somehow fixed to the dollar most of the time.
But then, lucky for me, the forex volatility is peanuts compared to to stocks. Check that chart to see what I mean SPY against CHF/USD:
Sorry. Not talking about stocks but contracts for services.
I sell myself (through my employer) around the world and get paid in other currencies, mostly EUR and USD. We add a little extra for ârisksâ, but nowhere near 18%. Multi-year projects are protected with inflation terms and sometimes even currency hedging. But, a 1 year project is lost in a limbo where not covered for currency slides and just the right timing to send it to profit hell.
It is a similar situation, I make most of my money in USD. Hedging is not an option as I said, long-term it is more expensive than not to hedge because of the interest difference. However, short term it may be interesting like the last 12 months.
My advice is to turn your USD liquidity into Gold, because de-dollarization is around the corner. The Middle East pumps and injects money into the US Economy, invests in stocks, AI, US treasury bonds, and if they pulled out of that, USD would just be a piece of paper without much value. There is a financial crisis looming around the corner, as oil prices are projected to go up to 200 USD, meaning 3x than the average normal, world economy will be hit.
It sounds reasonable and compelling, but a currency being crap is not a reason to avoid doing business.
Being a bit simplistic, any other currency is crap if you look around from the Swiss perspective. So, is that an impediment for selling to others goods and services? No Switzerland wouldnât enjoy its current level of prosperity if people were afraid of dealing with other people in countries with less stable macroeconomic conditions. Give me your whatever you have in hand and letâs see what we can do.
Of course, if the exposure to USD is very high, reduce it to a comfortable level. But, no reason to jump from the ship, itâs not a sinking macroeconomic ship (yet).
If a customer from US shows up (electronically), I wouldnât tell them to f**k off with their useless currency. Yeah, prices may have increased for them due to exchange rates, but letâs talk about whatâs possible. Same for stocks, no prejudice, only check if it may work or not.
I failed at nuance in the previous reply. Trying to fix this now.
