overall lt trend is china lower growth means lower global gdp as china is now the main driver of global gdp because the US is only about 15% exports. used to be as high as 40% back when US was manufacturing based economy
china slows - europe, asia, africa all slow to a degree
agree with dalio - china's 40 year expansion now suffers a 10 year+ deflation - and because it was overly built on debt that supports non performing state owned entrprises it will be a longer unwind. if the debt had built highly productive businesses only then the unwind would be shorter.
coming at the same time as a global aging phenomenon from post WW2 breeding boom - more older people with higher health costs, not producing gdp etc. this is true for most economies. even true of china for a different reason.
these are all the reasons why economists are fighting so hard and so unorthodox trying to extend this growth cycle - because the gdp flame is hard to rekindle if it goes out - and there are these 2 major forces pushing down on gdp
hence higher usd (safety buying + higher nominal bond rates + carry trade), but lower lt bond yields but also higher m2 (easy money to speed circulation in attempt to boost inflation), lower gdp growth and low inflation low(negative real rates) (because easy money doesnt work when everyone is getting cautious and once there are few assets yet to bubble)
when US hits recession gold will catapult. market is factoring that to a degree now but some question on whether its started, or its still 6-18 months away
gold tactically is mainly at risk from a bear rally in lt bond rates - but they wont rise far or easily and that will be followed by even deeper lows going by the tlt chart
there should be some sort of global debt jubilee and reset - the debt is strangling the globe. would probably kill gold price but then we could get back on a better footing to deal with the aging issue.
that goes away in about 20 years. the 2040s should be a great time if we dont do too much damage getting there.
some singular bright spot economies that are on a different curve - Vietnam, some in africa for eg
