The fundamental objective of the strategies that we employ are firmly centered around the principle of wealth preservation, alongside achieving realistic and sustainable growth.
For a number of years now we have been painting a picture of the global economy that sheds light upon some key factors, which all indicate that we are fast approaching some very turbulent times throughout the global economy.
History teaches us some hard facts and the bottom line is that recessions happen. Markets crash. Currencies collapse and financial crises’ happen. It is historically proven that every seven to thirteen years, key elements within the global economy are hit by a recession. Despite how clear this is, what surprises us is that so many people do not expect it to happen and are caught completely cold, suffering the impacts of economic loss, a lack of liquidity, flexibility and subsequently find themselves trapped at the mercy of factors that are beyond their control.
When we look at debt as being one of the key symptoms of a recession, it is incredible to think that since the last financial crisis of 2008, as opposed to the world reducing it’s debt problems, global debt from through companies, governments and households has actually increased by a staggering 50%. The world debt increased by $3 trillion in the first quarter of 2019 alone, where it now stands at $246.5 trillion.
In the U.S, when Barack Obama was sworn in as President in January 2009, the U.S debt stood at $10.626 trillion. When he left the White House in January 2017, the debt had been increased by 87.7% to $19.947 trillion. In their presidential tenures, Obama added $9 trillion, Bush added $4.9 trillion and Clinton added $1.5 trillion. Since Trump has been sworn in, U.S debt has already hit $22.5 trillion and it shows no sign of slowing, which will obviously only succeed in adding to our debt crisis.
In the UK, at the start of 2007 before the crash, the debt amount hit a record £500 billion. Since the financial crash, the level of debt has surpassed a staggering £2.2 trillion. In 2007 the debt was equal to 38% of GDP. It has now exceeded 84% of GDP. Another worry is China, whose debt has recently risen to over 300% of GDP, rising to $40 trillion, representing some 15% of the world’s overall debt. With growing concerns over national and world debt, currencies, tech and property bubbles, trade wars, along with a high degree of political uncertainty through events such as Brexit, it is clear to say that we are sleep walking deeper into a financial storm.
Here at DEFOES, we are perfectly positioned to take full advantage as we are strong believers that comes downturn - comes opportunity. It is time for smart money to be placed into real-world, hard assets to act as a hedge and to safeguard capital against the coming economic volatility that we will see within the stock markets. We are entering a time where liquidity will be king when it comes to taking advantage of the next coming recession.