HSBC: Stick with the US dollar

Good stuff here from HSBC:

The only other game changer I can see would be a major European fiscal stimulus that, so far, is not coming.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

  1. Germany have repeatedly ruled out fiscal now. Ironically the 0.1% quarter they just reported looks like the final nail in the coffin for German fiscal.

  2. No fiscal from US until after the election at least.
    China already running huge stimulus; feeding overcapacity into overcapacity, like a virtuous blackhole
    Germany ruled out fiscal; relying on spontaneous private sector recovery for manufacturers producing goods that have no buyers
    Japan still being Japanese

    One wonders where the global growth is supposed to be coming from… It’s so late in the cycle, with too much debt, too much capacity and a chronic, global shortage of willing and able consumers.

    • An excellent summary. Of course, the answer could be “Demand is borne of much lower prices?” It’s not ‘how much we earn’ after all, but what it can buy. Asset Price Deflation, of some significance, seems to be the only way out.

      • Central Banks and governments are doing their best to make sure that doesn’t happen. Keep printing money, lower rates to zero and beyond, pump up stock and property markets and it’ll result in wage growth and inflation.

        Oh, it didn’t work? OK then, rinse and repeat until it does!

    • Historically, a lot of wars have been started by kings wiping out their debts.

      It’s also a great stimulus for an economy, all those young men need nice shiny uniforms before they go off to die for their country.

  3. Why would the Chinese do any significant trade deal with Trump when they can simply wait another year in the hope that a Democrat Surrender-Monkey will take his place?

    American Presidents come and go. I would have thought the Chinese rulers take a much longer view.

  4. UNITED STATES …

    US housing starts rebound; building permits at highest level in over 12 years … CNBC

    https://www.cnbc.com/2019/11/19/us-housing-starts-total-1point314m-in-october-vs-1point320m-expected.html

    KEY POINTS
    • U.S. homebuilding rebounded in October and permits for future home construction jumped to a more than 12-year high.
    • The data pointed to strength in the housing market amid lower mortgage rates.
    • Housing starts increased 3.8% to 1.314 million units last month, with single-family construction rising for a fifth straight month and activity in the volatile multi-family sector rebounding solidly, the Commerce Department said.