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  • Ritesh Jain

    Independent Market Expert, Mumbai
    He is a trend watcher, Global Macro investor and Blogger at worldoutofwhack.com. He has over 20 years of experience in financial markets, bonds, equities, gold, and derivatives. He muses about global macro investment opportunities, economics, business, and financial issues.

Brave New World: Indian economy staring at stagflation; Fed’s balance sheet shrinks

India's headline inflation surged to 7.35% in December, the highest in five years.

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Last Updated: Jan 27, 2020, 08.03 PM IST
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Ritesh Jain, a Dalal Street veteran, trend watcher and Global Macro Investor, captures global macro investment opportunities and economic, business and financial trends with charts and commentaries in this space.

According to Bloomberg, venture capital barometer down close to 40 per cent from its peak in June 2019. VC deal volumes are down 24 per cent, while deal exits just plunged 35 per cent!.

Bloomberg
1

When 10 per cent of the US GDP growth comes from shale and Texas, you need to keep an eye on “Great Shale Bust”.

2

Christopher Balding… A China expert
China will push its trade surplus away from the US to Europe and Asia

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Stagflation fears
Indian economy is staring down stagflation, as an alarming deceleration in growth collides with rising prices. Headline inflation surged to 7.35% in December, the highest in five years. The following chart is something straight out of an economist’s nightmares:

BCCL - Non Copyright
4

Crop yields are going down
Corn and wheat crop yields are going down as per the latest data from the USDA.

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Fed’s balance sheet shrinks
Falling repos, surging T-bills, slowly rising coupon Treasury securities, falling MBS, and other activities reflected on the Fed’s balance sheet, all combined, have caused total assets to decline by $30 billion over the seven-day period to $4.146 trillion. This is down by $20 billion from the balance sheet four weeks ago, on December 25:

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Credit rating downgrades

Bloomberg
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Stagflation threat looms for former world-beating economy India

India may be heading for a bout of stagflation: Viktor Shvets, Macquarie

Goldman says stagflation is looming large

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