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


• 01.03.2022 08:30 am
#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.

Talks hold little hope at this point.

NSW QLD floods serious impact.

Everything that is happening in the world is working towards reduced economic activity and super high inflation.

Hello everyone,

And it seems the problem with Queensland's response to the floods is the Bureau of Meteorology?

So says the Queensland Premier.

We live in a strange age where nothing can have happened without someone or a group of people having been to blame. We seem to have lost the ability to accept that some things just happen. That there can be accidents where no one is at fault. An act of nature is simply that.

In Australia, we go out of our way to approve and build on flood plains and push further into forest areas. In doing so, we invite greater tragedies. This is unavoidable. As our population grows, the number of people impacted by challenging natural events will also continue to grow. We see this all round the world.

And we see crises made by humans most terribly in war.

Here, the blame can be afforded, but it is never a simple black and white reality. Some blame will always exist on both sides of any argument and especially in the complexities of war. This is why the initial peace talks just held were only ever going to be a get to know each other at best affair.

Ukraine wants all Russian troops to return to Russia. Russia wants the current Ukraine leadership gone, a big swathe of Ukraine to keep, as well as its total disarmament. Hardly an easy bridge to build.

The most likely outcome of the peace talks was always going to be continued war. Perhaps, some ground can be made at the next meeting which both sides agreed to hold in a few days or "soon". As vague as it gets. Russia is likely to see there is more actual ground to be had through its army moving forward.

Again, I am just trying to be as accurate as I can be about the situation. So we continue to have some kind of handle on how severe things will become and the on-going economic impact for Europe and the world will be.

It looks like the fighting will get much worse before there is any end in sight.

While the European Union wanted to send advanced Mig fighters to the Ukrainians, both Poland and Bulgaria thought better of it and have refused to do so. Thank goodness, as we all want to help Ukraine, help peace, and do so without a direct conflict between NATO and Russian forces. Such an eventuality really could lead to that feared World War III scenario. To me that whole scenario is a complete non-starter. As I believe both sides will do what they have to in order to avoid such a situation. Well done Poland and Bulgaria.

You do not save Ukraine from war by making the war even bigger and more devastating.

The reality everyone should be sadly prepared for, is that Russia has been holding back on its full capability.

Aware of the civilian risk should it push forward with all its might. As pressure from the West and more and more armaments begin to be sent to Ukraine, President Putin may well feel his window of opportunity is closing. If so, he either has to push harder and more quickly into cities now than he wanted to, or accept some form of consolidation of regional territory and enter talks more emphatically. His recent actions would suggest the first scenario is most at risk of un-folding.

The rush to provide lethal aid, may in fact heighten the casualty rate.

Again, this is not taking sides. It is simply assessing the realities of what may occur. Simplistic wish lists of what should happen hold no value at this point.

Unfortunately, it does appear there could be a heightened level of far more serious weaponry and attacks in the coming days.

That, or Putin begins to consolidate what he already has. Which appears less likely.

THE IMPACT FOR MARKETS IS JUST BEGINNING.

There is no soon to be discovered path to instant peace. NATO and Russian forces will remain 'at trigger point' toward each other. The humanitarian crisis will intensify. The shooting could go up a terrible quantum.

Economically, Europe cannot avoid recession.

This is a certainty  A deep recession is most certainly the risk. A "dark deep recession" being the further risk, if Putin no longer cares about the revenue and switches off the existing pipeline flow in response to Germany's sudden turnaround.

Stocks will remain heavy as economic activity slows more dramatically than most commentators expect.

Gold, Oil and agricultural products may only have just taken their first steps on much grander major price shifts higher.

The Euro will remain vulnerable. Though with ECB smoothing and support activities. This could see sharp Euro rallies on occasion, but the trend is likely to remain down.

The Australian situation is more vulnerable than most appreciate. War following hot on the heals of Covid will mean on-going reduced global travel and immigration. Though we should be welcoming with open arms the people of Ukraine.

Some commodity benefit will be afforded, but an overall weakening of the global economy has never been a good prospect for this trading nation. Our currency and stock market remain vulnerable.

The impact of the current very severe and widespread flooding in northern NSW and South East Queensland is incalculable at this stage. It is enough however to cause very flat GDP contributions from these two states over the current quarter.

Overall, slowing global activity with super-global inflation is by far the most likely economic scenario moving forward.

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.