We are talking about the Macro environment which depending on your criteria, started in 1980 with supply side trickle down economics, or 2011 with Bernanke’s QE 2, 2017 with Trump’s tax cut for the top, or 2019 with Powell’s capitulation to Trump with the unneeded interest rate cuts that flipped an attempted return to balance and sanity. Bottom line, speculation and greed are in control as we enter 2021.
After the first of the year I will try to make some forecasts for 2021. Most economists label these kind of forecasts as surprises. If any of the factors listed in the first paragraph here are flipped, you will see a look of surprise for sure.
Three charts to contemplate before the surprises to come..
Here is the interest rate chart with Powell’s capitulation period outlined in red.
Next, here is the dollar chart with the Obama strong dollar period in the first circle, and in the second circled area, Trump’s meandering and declining dollar. Obviously what Biden does here will be crucial. His Treasury pick is more a strong dollar advocate that has balance and equality at the core of her economic agenda.
And lastly, the Fang stocks, the end all recipient of loose economics, appear to be rolling over, started on December 22nd for the Fang 20 that CNBC’s Fast Money crowd loves.
Here’s hoping that 2021 will see a return to Main Street economics. Happy New Year.