127 days ago • Posted by Charles-Henry Monchau

Gavekal foresees a major economic cycle shift from disinflationary boom to inflationary boom

According to Gavekal, economic activity is likely be strong to very strong in the near future. As such, inflation is going to accelerate significantly in the next 12 months. Yields on 10-year treasuries will rise from an abnormally low level to a more normal level. If the Fed tries to stop rates rising, the US dollar may collapse, which will be inflationary for the US and deflationary in Europe. In short, the US is moving from a deflationary boom to an inflationary boom. This should have major implications in terms of asset classes performance leadership. To sum up, buy stores of value (Gold, real estate, commodities, high fixed costs companies, cyclical producers) and sell long-term treasuries - source: Gavekal

The four quadrants business cycle framework by Gavekal