Can The US Avoid A Major Recession?
By Geoffrey Fouvre, Our Classical Economist at LaDucTrading for EDGE clients
Forward By Samantha
Geoffrey and I discuss macro forces on the fake market & real economy all the time. He has correctly warned of the gold & silver breakout in March/April 2024 as a lasting trend, at the same time he became very bearish the US dollar on the failure of DOGE & fiscal restructuring by Trump in early 2025. On bonds he has been especially in tune. And his oil short thesis is also validated. So too were his oversold China plays that resulted in a 440% portfolio gain in 18 months ;-)
On the recent/ongoing AI mania, he has warned: Big Tech is not a short:
“There will be overinvestment like there has always been in each big cycle including in 1885 where the push in capex into railroads failed to prevent the bad credit from being cleaned up.
But I prefer to focus on the clean up necessary which is the US consumers. They are broke. And Mainstreet businesses, they are broke too.”
He reminds not to expect “Bubble Vision” (TV & consensus bulls) to show you where there are areas to be careful. With that, he has spent considerable time researching macro economic data the market has not priced in. Everything from:
US Treasury “Bond Stuffing” on banks as national security... to
State-sponsored Bitcoin/Stable Coins as ponzy off-ramps to inflation...to
Yield-gorging distress forming in the private equity & credit markets... to the...
Potemkin Village facade of consumer lending, savings, income deterioration
And from the above AI overinvestment theme, he decided to explain the great parallel to the 1882-1885 period of BAD CREDIT that was about to implode so the government of France pushed aggressively into the “NEW TECH” of industrialization, delaying the implosion and recession/depression. But the papering over of risk did not last, so that in time the entire economy was eventually engulfed in a great reset.
I think this line of thinking is an apt parallel and fore-boding warning of the future risks. I wanted to make sure all clients - not just EDGE - can see this great history-as-guide example that Geoffrey is laying out before us.