• Clifford Bennett, Chief Economist | World’s most accurate currency forecaster at ACY


• 28.04.2022 04:15 pm
#stocks , Clifford Bennett has over 36 years of market trading experience and was named the 'World's most accurate currency forecaster' by Bloomberg New York. He has advised some of the world's largest organisations, billionaire investors, and political leaders and spoken at the prestigious APEC summit on reserve currency issues. Clifford is the Chief Economist at ACY Securities.

ACY has lead the charge in warning of the approaching inflation wave since mid-last year when everyone thought it would be ’transitory’.

Sometimes it is necessary to say the un-popular thing to protect our clients, and we are steadfast in doing so.

The US is experiencing 8.5% inflation, going higher. Australia has leapt to 5.1%, going higher.

The global economic environment, particularly in the northern hemisphere, is deteriorating fast. I have spoken at length about the ‘recession risk’, immediately this year, confronting Europe, the USA and China.

The real twist in all of this and one that financial markets continue to miss, is that in nations like the USA and Australia we are most definitely going to experience stubbornly high inflation and one of the most aggressive interest rate hiking cycles we have ever seen. Simultaneously hitting consumer and business spending power. These economies are going to be crunched severely, due to higher interest rates actually having little impact on inflation over the next 12-18 months.

This very seriously has the risk of driving the US economy into recession. And similarly, even raises the risk of a recession in Australia. To as high as 30% over the next year.

The coming Federal election: No matter which side wins, the incoming government will be faced with abstract low interest rates having to rise extremely quickly just as the domestic economy begins to implode on inflation, and rising mortgage stress across the nation.

There is little appreciation by either of the major parties, as to just how dire the real “look out the window” economic picture is.

Solutions are staring us in the face, but get absolutely zero air time in this election campaign.

My long held call for a review of the RBA is supported by the OECD. Radical reduction and simplification of the tax system is something that is actually achievable. Regulatory and taxation complexities are a major driver of loss of national wealth via the creation of a ceiling for young talented people across working families in every corner of the land.

Australia, a resource rich nation of just 25 million, badly needs to think 'world’s best practice' in all areas of productivity and streamlining the tax and compliance burden. We cannot continue to tinker with an already absurdly complex tax system, instead of starting anew with a clean piece of paper and achieving an Asian regional best practice tax system. This needs to be the new direction across all government departments and impetus. To compete in Asia.

My suggestion has for a decade now been a 20% company tax rate, a 20% income tax rate and a 20% GST. Which immediately achieves a more egalitarian tax burden and rejuvenates the economy tremendously.

As the northern hemisphere economically convulses, which is what is happening, it has never been more important for Australia to recognise its place in Asia and to maximise this wonderful geography and further potential.

With the rather gloomy economic outlook, higher rates, high inflation, mortgage stress and property price declines, the outlook for both Australian equities and the Australian dollar remains somewhat circumspect.

My forecasts remain: The Australian dollar heading to 65 cents and a decline of 20% in the local equity market.

Clifford Bennett
ACY Securities Chief Economist.

The view expressed within this document are solely that of Clifford Bennett’s and do not represent the views of ACY Securities.

All commentary is on the record and may be quoted without further permission required from ACY Securities or Clifford Bennett.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.