Economics

The very recent ending of the Saudia Arabian agreement with US to prioritise oil orders placed in Dollars (signed 50 years ago when Nixon and Kissinger were the names in the news) may well generate news stories in the mainstream press in the next few weeks.

I am not able to predict in any meaningful way out the macro-economic impact, because the ending of an agreement is not likely to have any instant impact in a world where all efforts, especially in China where they have been dumping Dollars in favour of mainly Gold, have failed to dislodge the Dollar as the world’s preferred currency.

Yesterday, I listened to a webinar delivered by Steve Bell, the Chief Economist at Columbia Threadneedle, because although economists as a rule rank no higher than weather forecasters in my ranking of scientific reliability and utility, Steve is a man of mature years, presents vast amounts of data in interesting charts and is modest in offering his prognosis.

Here are some extracts that will give you some extra context for decision making in the immediate future.

Note that the focus was on the 3 main developed market groupings of interest to British investors, being the USA, Europe and the UK. Only passing reference was made to the Asia Pacific markets. The comments were about macro ecomomic trends and therefore applicable to all asset classes, notably both equities and fixed income (bonds).

I recommend keeping in mind that the data supplied is naturally backward looking, although very up to date, and I am only referring to a trend or future direction when I say so.