If anything, 2024 hasn’t been a boring year. We have seen elections taking place all over the world and we have saved the best for last, the elections in the USA. We have seen wars escalating in the Middle East and big tech companies in America reaching all-time highs on the back of AI.
Locally, we have transformed our government into one of national unity and in the recent Medium-Term Budget Policy Statement we have heard that although our economy is still in intensive care, things might be improving.
The USA is the biggest economy in the world and very influential when it comes to world-wide trends. That is why we often look at what is happening there and accept that as the benchmark. One of the criticisms socialist countries often level against capitalist states is that capitalism benefits only the wealthy. In a recent study by the Federal Reserve, it was found that the poorest 50% of the population had in fact benefitted most since 2019. Not everybody wants to be rich, but everybody wants to be comfortable.
Back to financial shenanigans, just as we thought everything was accelerating towards a record-breaking year-end, the bond market gave us a nasty surprise. With interest rates falling all over the world, bonds seemed to be the safest place to be, but unfortunately that turned out to be wrong. The problem might lie in the fact that both presidential candidates in the US election will be inflationary and on top of that, not talking about reducing the eye-watering debt to GDP figure, currently so out of control. As we have mentioned before, as long as the US dollar remains strong, things will be okay, but they are sure playing a high-stakes game.
