Premium Investment Service (February 2024)

China – The 2024 ‘X Factor’
Our dreaded ‘Terminal, Terminal 2.0’ potential economic scenario for 2024 has at its foundation the premise that not only do cash rates remain higher than the market presently expects, but also that something finally ‘breaks’ in the global financial system because of the sustained pressure that these elevated cash rates imply.

Identifying the trigger for a ‘black swan’ event is extremely challenging, but should one speculate on a likely source for the onset of a financial crisis in 2024, The Middle Kingdom appears to be the front runner. The country is already showing signs of economic vulnerability, highlighted by repeated monetary interventions from its central bank. The potential return of a Trump-led administration, which seems more and more probable, could lead to the resurgence of a trade conflict between the US and China, a scenario popular among voters…

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