Jeffrey Klingelhofer, co-head of investments and managing director at Thornburg Investment Management, discusses the outlook for US and Chinese economies, and the implications for financial markets. He speaks with Paul Allen on "Bloomberg Daybreak: Australia."
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BREAKING: Recession News LEARN MORE ABOUT: Bank Failures REVEALED: Best Investment During Inflation HOW TO INVEST IN GOLD: Gold IRA Investing
US Recession Is Delayed, Not Canceled, Thornburg Says As the US economy continues its impressive run, with record-breaking stock market levels and low unemployment rates, talk of a possible recession seems to have faded away. However, one expert warns that the recession is merely delayed, not canceled. Larry Thornburg, CEO of Thornburg Investment Management, has analyzed the current economic landscape and believes that the signs of an eventual downturn are still present. Although the US has experienced an extended period of economic expansion, Thornburg believes this cannot last forever. Thornburg points out that economic cycles are a normal part of any economy, and the current upswing is no exception. While policymakers and investors may breathe a sigh of relief, assuming the worst is behind us, Thornburg argues that complacency could be dangerous. The signs that Thornburg cites as indicators of an eventual recession include overextended corporate earnings and valuations, mounting government debt, and sluggish global economic growth. These issues, if left unaddressed, can eventually lead to an economic slowdown. One of the biggest concerns is corporate debt, which has risen to record levels in recent years. Many companies have taken advantage of low-interest rates and borrowed heavily, leading to a potential debt crisis. Once interest rates rise or economic conditions worsen, companies will struggle to service this debt, potentially leading to bankruptcies and job losses. Another worry is the enormous US government debt, which has surpassed $26 trillion. While significant fiscal support has been crucial in responding to the ongoing COVID-19 pandemic, it has also contributed to a massive increase in public debt. At some point, this debt burden may become unsustainable, leading to potential ramifications for the broader economy. Finally, the global economic landscape is a cause for concern. Europe, China, and other major economies have faced challenges and slowdowns even before the pandemic. Sluggish growth and trade barriers can have ripple effects, eventually impacting the US economy. Thornburg's message is not meant to instill panic, but rather to remind investors and policymakers to remain vigilant. Ignoring these warning signs could lead to a more severe downturn when it eventually arrives. To avoid a painful recession, Thornburg suggests taking proactive steps. Policymakers should focus on reducing government debt and implementing measures that promote sustainable economic growth. Companies should also be cautious about overextending themselves and maintain healthy financial positions. Furthermore, investors should assess their risk exposure and diversify their portfolios to withstand potential economic shocks. Instead of chasing high-risk investments that may falter during a recession, a balanced approach can help weather the storm. In conclusion, the US recession might be delayed, but it is essential not to dismiss the underlying risks. Larry Thornburg's warning serves as a reminder that economic cycles are inevitable, and it is crucial to remain prepared. Taking proactive steps now can help soften the blow and potentially mitigate the impacts of an eventual downturn. https://inflationprotection.org/thornburg-says-us-recession-is-not-canceled-only-delayed/?feed_id=144292&_unique_id=6524b56796eec #Inflation #Retirement #GoldIRA #Wealth #Investing #Bonds #china #chinesebonds #chineseeconomy #chineseyuan #Currency #economy #ForeignExchange #JeffKlingelhofer #paulallen #u.s #U.S.economy #RecessionNews #Bonds #china #chinesebonds #chineseeconomy #chineseyuan #Currency #economy #ForeignExchange #JeffKlingelhofer #paulallen #u.s #U.S.economy
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