Today’s review is dedicated to bitcoin and the general macro picture. That being said, since macro conditions play a leading role, discussing bitcoin or the macroeconomic background is one and the same. So the question is: Is a recession inevitable?

In my humble opinion, yes, recession is inevitable. At the moment, there are too many factors affecting the economy:

  • high energy and commodity prices;

two years later, COVID continues to disrupt the global supply chain (talking about the current lockdowns in China);

  • high inflation;
  • the Fed is going to tighten its monetary policy (but they they start, in fact, from scratch).
  • So, from a qualitative point of view, the game is rigged. The impact on economic conditions is usually more like driving a supertanker than a dolly. It’s too late to avoid a recession, the die is cast.

    To be honest, recessions in the US are not particularly rare at the moment. Since the Great Depression to the present, there have been a total of 14 of official recessions (i.e. recessions declared by the US National Bureau of Economic Research).

    Looking at the time between successive recessions (shown below in blue), this is an average of one recession every 6 years.

    Recession Leading Indicators
    Recession Leading Indicators

    There is a joke that economists have predicted nine of the last five recessions, but to be honest, these indicators are not that bad:

      yield curve inversion correctly predicted 6 of the last 6 recessions without false positives;

      leading OECD composite indicator correctly predicted 10 of the last recessions with 5 or 6 false positives (depending on how you count).

      Consolidated PMI is too noisy to get a meaningful way of counting false positives, so I’m not going to attempt that. But qualitatively, there really seems to be some kind of relationship.

      So yeah, not that bad, not that bad…

      What then do these indicators tell us about the current situation?

      • zbezhna;

      composite PMI has already declined from a recent high;

    • the leading composite indicator is about to fall below the level 17.
    • Right. It seems that bitcoin will soon pass its serious test.


      disclaim any liability for any investment recommendations that may be contained in this article. All judgments expressed express exclusively the personal opinions of the author and the respondents. Any actions related to investments and trading in the crypto markets are associated with the risk of losing the invested funds. Based on the data provided, you make investment decisions carefully, responsibly and at your own peril and risk.

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