Dear Reader,
Currently the US government debt is almost 21 trillion USD or 105.4% Government Debt/GDP ratio.
Is this situation sustainable? No. Had USA similar levels of debt before? Yes, in 1946 Government Debt/GDP was 118.90%. After world war 2 the USA managed to diminish its debt burden.
Can the US continue to lead and manage the world with so much government debt? No. It can not. At least, not to the same degree as recently. China holds large portion - more than 1 trillion USD of US government treasury securities. Currently, the US President Donald Trump is being confrontational with China with his trade policies and other measures. This could lead to China selling off large portions of its US treasury debt load and the yields on US Treasuries could shoot sky high.
The US is vulnerable in that respect. I think Trump realizes that. If the USA does not manage to clear its debt like it did after the Second World War, America is headed for trouble. The US dollar continues to be the world's foremost reserve currency and this cushions the situation so far, but that may not be the solution forever.
The bottom line? I think the USA will continue to lead the world, but because of its high indebtedness USA's position is weakened. Can America get rid of the huge debt load? Yes. How? Strong growth, inflationary spiral, technological breakthrough are some obvious solutions. Will America cut down its government debt. Yes. I bet on USA surviving this mini crises and going on to lead the world again along with the other superpowers.
Disclaimer:
The blogposts and comments on this blog and posts on social
networks(Twitter, LinkedIn etc.) are not investment recommendation,
are provided solely for informational purposes, and do not constitute an
offer or solicitation to buy or sell any securities. The opinions
expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
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Disclaimer:
Disclaimer: The blog posts and comments on this blog and posts on social networks are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
The blog is stocks analysis and valuation, Bitcoin, Cryptocurrencies, Artificial Intelligence, AI, deep-learning focused. Independent, unbiased AI insights.
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blog posts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blog post and posts on social networks!
The blog is property of Wolfteam Ltd. www.wolfteamedge.com
Respectfully yours,
Petar Posledovich
Sunday, March 25, 2018
USA Overburdened by Debt. The End of American Supremacy?
LinkedIn Bio:
https://www.linkedin.com/in/petar-posledovich-5236123/
I recently worked for almost 3 years as a Senior Expert at United Bulgarian Bank AD, part of KBC Group solely doing Market and Counterparty Risk. Before that I worked for 2.5 years as Chief Expert, Market and Counterparty Risk in DSK Bank, part of OTP Bank.
I have interned for 2.5 months with Deutsche Bank AG, worked for 8 months as Market and Counterparty Risk Manager at ING Wholesale Banking and for 1.4 years as Investment Associate at Unicredit Bulbank AD, Bulgaria.
Since November 2010 until July 2017, I was a Research Analyst at the Bulgarian National Bank, where I analyzed financial markets for managing Bulgaria's foreign currency reserves in an efficient manner.
I hold a Master of Science in Applied Mathematics(Financial Mathematics) and BA in Economics from Sofia University 'St. Kliment Ohridski'
I have done 1.5 year of graduate studies at the University of Constance, Germany and Erazmus academic exchange year studies at the Friedrich Alexander University of Erlangen-Nuremberg, Germany.
I am a Licensed Investment Consultant by the Bulgarian Financial Supervision Commission
Sunday, March 18, 2018
Protectionist USA, Debt Bubble Soon to Burst in China?
Dear Reader,
The US President Donald Trump announced new protectionist measures in order to further the interests of US producers and enhance US employment. As is obvious from the news, Europe and China will follow with retaliatory protectionist measures. I forecast global trade will diminish henceforth and this will slow global growth. If a full scale trade war erupts between USA and China this will seriously disrupt the supply chains of many global corporations. Apple is a case in point. Its products(IPhones, Ipads and Macs) are basically manufactured in China by Foxconn.
If a global trade war erupts this will hurt global growth, but it should not cause a recession. I forecast the next recession will again have financial roots and it will be invoked by too much leverage in the financial system.
China is an interesting case. The Chinese economy, both corporate,consumer and state has too much debt. Shadow banking disguises the leverage, so the debt load is even bigger. I forecast sooner or later there will be an abrupt end of the Chinese economic growth an the economy will suffer a severe recession and will grow much slower after that. The Chinese GDP could fall by something like 10% before it resumes its growth again. That should not necessarily be a huge problem, since the Chinese economic system will clear its high debt load and start growing on a fresh note.
So I think the next global recession can be caused by the China debt bubble bursting. The high growth of Exchange traded funds which now proliferate in financial markets will exacerbate the crises. That said, I do not think in the next 2 years there will be a global recession. So the current economic cycle of growth should prove the longest in history, albeit with a reasonably slower growth of GDP.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
The US President Donald Trump announced new protectionist measures in order to further the interests of US producers and enhance US employment. As is obvious from the news, Europe and China will follow with retaliatory protectionist measures. I forecast global trade will diminish henceforth and this will slow global growth. If a full scale trade war erupts between USA and China this will seriously disrupt the supply chains of many global corporations. Apple is a case in point. Its products(IPhones, Ipads and Macs) are basically manufactured in China by Foxconn.
If a global trade war erupts this will hurt global growth, but it should not cause a recession. I forecast the next recession will again have financial roots and it will be invoked by too much leverage in the financial system.
China is an interesting case. The Chinese economy, both corporate,consumer and state has too much debt. Shadow banking disguises the leverage, so the debt load is even bigger. I forecast sooner or later there will be an abrupt end of the Chinese economic growth an the economy will suffer a severe recession and will grow much slower after that. The Chinese GDP could fall by something like 10% before it resumes its growth again. That should not necessarily be a huge problem, since the Chinese economic system will clear its high debt load and start growing on a fresh note.
So I think the next global recession can be caused by the China debt bubble bursting. The high growth of Exchange traded funds which now proliferate in financial markets will exacerbate the crises. That said, I do not think in the next 2 years there will be a global recession. So the current economic cycle of growth should prove the longest in history, albeit with a reasonably slower growth of GDP.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
LinkedIn Bio:
https://www.linkedin.com/in/petar-posledovich-5236123/
I recently worked for almost 3 years as a Senior Expert at United Bulgarian Bank AD, part of KBC Group solely doing Market and Counterparty Risk. Before that I worked for 2.5 years as Chief Expert, Market and Counterparty Risk in DSK Bank, part of OTP Bank.
I have interned for 2.5 months with Deutsche Bank AG, worked for 8 months as Market and Counterparty Risk Manager at ING Wholesale Banking and for 1.4 years as Investment Associate at Unicredit Bulbank AD, Bulgaria.
Since November 2010 until July 2017, I was a Research Analyst at the Bulgarian National Bank, where I analyzed financial markets for managing Bulgaria's foreign currency reserves in an efficient manner.
I hold a Master of Science in Applied Mathematics(Financial Mathematics) and BA in Economics from Sofia University 'St. Kliment Ohridski'
I have done 1.5 year of graduate studies at the University of Constance, Germany and Erazmus academic exchange year studies at the Friedrich Alexander University of Erlangen-Nuremberg, Germany.
I am a Licensed Investment Consultant by the Bulgarian Financial Supervision Commission
Monday, March 5, 2018
Are Large Capitalization US Technology Stocks Overvalued?
Dear Reader,
US and global stocks continue recovering from the recent correction. That said, are the top five US and global technology stocks Apple, Google, Microsoft, Amazon and Facebook overvalued?
In short, if they are overvalued it is not by a lot. If I have to pin it down the five aforementioned stocks are overvalued anywhere between 10 and 30% at the current pace of economic growth.
If the global economy,US including, enters a recession the top 5 US technology stocks could fall anywhere between 20% to 55%. Why? Simply because these top 5 tech stocks are leveraged mainly on the average consumer. With the exception of Microsoft, of course, which is geared to businesses. However, business would also suffer in a downturn, so Microsoft is not insulated.
For the next 2 years I presume, the 5 large capitalization US technology stocks will continue to party like it's 1999-2000 again.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
US and global stocks continue recovering from the recent correction. That said, are the top five US and global technology stocks Apple, Google, Microsoft, Amazon and Facebook overvalued?
In short, if they are overvalued it is not by a lot. If I have to pin it down the five aforementioned stocks are overvalued anywhere between 10 and 30% at the current pace of economic growth.
If the global economy,US including, enters a recession the top 5 US technology stocks could fall anywhere between 20% to 55%. Why? Simply because these top 5 tech stocks are leveraged mainly on the average consumer. With the exception of Microsoft, of course, which is geared to businesses. However, business would also suffer in a downturn, so Microsoft is not insulated.
For the next 2 years I presume, the 5 large capitalization US technology stocks will continue to party like it's 1999-2000 again.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
LinkedIn Bio:
https://www.linkedin.com/in/petar-posledovich-5236123/
I recently worked for almost 3 years as a Senior Expert at United Bulgarian Bank AD, part of KBC Group solely doing Market and Counterparty Risk. Before that I worked for 2.5 years as Chief Expert, Market and Counterparty Risk in DSK Bank, part of OTP Bank.
I have interned for 2.5 months with Deutsche Bank AG, worked for 8 months as Market and Counterparty Risk Manager at ING Wholesale Banking and for 1.4 years as Investment Associate at Unicredit Bulbank AD, Bulgaria.
Since November 2010 until July 2017, I was a Research Analyst at the Bulgarian National Bank, where I analyzed financial markets for managing Bulgaria's foreign currency reserves in an efficient manner.
I hold a Master of Science in Applied Mathematics(Financial Mathematics) and BA in Economics from Sofia University 'St. Kliment Ohridski'
I have done 1.5 year of graduate studies at the University of Constance, Germany and Erazmus academic exchange year studies at the Friedrich Alexander University of Erlangen-Nuremberg, Germany.
I am a Licensed Investment Consultant by the Bulgarian Financial Supervision Commission
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