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Duck And Cover: A Compelling Argument for an Impending 2nd Global Recession

November 8, 2011

Unlike any other time in my 25 years as a New Market Entrepreneur, global macroeconomic factors matter and must play into our Go to Market plans.  Here is a thoughtful analysis of how central banks are increasingly interfering and uprooting our global capitalist system as they pursue their individual national self-interests.

Below is one example of many insightful graphics… in this case demonstrating how China is printing Yuan to fund US deficits while holding it’s currency rates artificially low so we can continue to buy their stuff…

Think global high finance doesn’t matter in your little sandbox?  Give this a read.  You will be shocked and outraged as this piece helps you connect some dots you have already been hearing about.   If these factors resonate as much to you as they did to me, they will help you (re)consider (and perhaps develop) your downside-scenario New Market Entrepreneurial plans and strategies.

For the time-pressed and/or attention-deficited, here’s a cut to the chase glimpse of their conclusions:

So what is the conclusion:

  • Global currency regime will face significant changes in the ensuing decade
  • Self-reinforcing cycle between Debtor-Developed and Emerging-Creditor nations likely to unravel – perhaps violently
  • European crisis may tip us into a second global recession
  • Global policy makers are out of stimulus options
  • Dollar hegemony may be challenged in the future

And some advice from Artemis:

  • Prepare your business for the potential of a second global recession
  • USD is historically strong when the economy is weak – watch for reversal
  • Evaluate portfolio returns against a global basket of currencies and commodities
  • Diversify exposure during periods of dollar strength and deleveraging :
    • Nations with healthy finances and commodity driven economies (e.g. Canadian Dollar, Norwegian Krone, Australian Dollar)
    • Tangible assets like real estate and metals (but not on leverage)
    • Alternative asset classes (e.g. volatility and managed futures)

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