The question is what to expect from the rest of the year. Is the halt in equity prices the start of a more volatile environment leading back to price levels seen last October? We believe so. The reason is that corporate profits will sink further. That leads to lower valuations, meaning lower stock prices. Financing costs are still on the rise. With increased interest rates, sticky core inflation, decreasing corporate profits, and weak consumer confidence, chances are that banks will become even more restrictive in giving out loans. This is not only an issue in the U.S. and Europe. Last week it was announced that Chinese banks’ lending plummeted to Rmb 345.9bn (USD 47.8bn) instead of the expected Rmb 800 bn. This is the lowest figure since 2009, even though the Chinese central bank lowered interest rates in June to boost consumer spending.

In this podcast episode, the WHVP team sits down with Dr. Beat Habegger of Habegger Strategy to discuss geopolitical risks in the current climate. In addition, Dr. Habegger will answer questions pertaining to investors regarding geopolitical risks and how he sees the trends of the world moving. We hope you enjoy it!

While this year indices look great, the economies do not. Investors are falling back into old habits, becoming too enthusiastic about positive signs such as decreasing inflation and ignoring threats such as the looming recession. As many experts, central bankers, and not at least the Bank of International Settlements are stressing, the last bit of the fight against inflation is the most challenging part. Therefore, everyone who thinks that inflation will continue to fall at the same pace as it did since the end of last year is either not showing a great understanding of how economies and monetary policy work or is just naïve. As shown in our previous publication, core inflation is moving very little at a very high level.

Inflation is increasing prices and a fall in the purchasing value of money. Banks and governments make inflation sound complicated as it serves their interest. It’s a hidden tax. Government-created inflation weakens the value of the currency, our money buys less. As evidenced by the recent debt ceiling farce, politicians have no interest in fiscal sanity or balancing the budget. While many predict the demise of the dollar, and much of the world is assisting in the erosion of the USD as the world currency, there are other factors. Urs Vrijhof-Droese is the Managing Partner of WHVP, international asset managers. Urs, an expert in international banking is based in Zurich. I’m a WHVP client. His recent article, The Swiss View – Cash is King got my attention.

On this podcast episode, the WHVP team sits down to talk about central bank digital currencies (CBDCs) and the initiative being presented to the Swiss government to ensure that cash stays a part of the Swiss economy forever. In addition, the team will briefly discuss the current debt limit standoff taking place in the U.S. government. We hope you enjoy it!

Expecting a slowdown in economic growth will most likely lead to a reduction in corporate gains. So far, companies were able to pass on price increases in raw materials to their clients. Additionally, managers try to keep their profit margins by letting off employees and transform their production to more efficiency. Not everyone will be successful in this environment and will be able to keep the profit margin on a high level. However, there will be firms that find ways to become more price efficient or increase their product or service’s quality to a level which increases the consumers willingness to pay higher prices. Long story short, “Cash is King!”. Accordingly, it is crucial to look out for companies that generate a cash flow that enables them to run their business, invest for the future, and if the time is ripe to acquire one or the other company to either grow their market share or use synergies.

The dominance of the USD in the global economy gives the USA a huge amount of power should another country go against the will of the U.S. or attack an ally of the country. Because of this, whether good or bad, it has caused some countries to view the dominance of the U.S. dollar as a threat to their sovereignty and independence. In this blog, we will look at some of the international movements away from the USD and how they may affect the dollar's value in the long term. Finally, it will conclude with what Americans can do to begin protecting their wealth's value in the face of a depreciating dollar.

Managing Partner Urs Vrijhof-Droese was recently featured in the Miller on the Money article to discuss how the Swiss banking system is set up and how it runs. Shortly after the Fed bailed out the Silicon Valley bank depositors, Reuters reported that Credit Suisse failed: “ZURICH, March 20 (Reuters) – Credit Suisse and UBS could benefit from more than 260 billion Swiss francs ($280 billion) in state and central bank support, a third of the country’s gross domestic product, as part of their merger to buffer Switzerland against global financial turmoil. …. The deal,…involves…a pledge from the Swiss government to absorb up to 9 billion francs in potential losses from the takeover.”

Many people are worried that we are back at the Great Financial Crisis. While we are convinced that history does not repeat itself, it often rhymes. The risks that result out of central banks rising interest rates in light-speed are not new. We believe that the decision of the central banks to raise interest rates has been the right one but that they clearly underestimated the inflation and thus started too late. However, not only was it a misjudgment of inflation rates, it was also a misjudgment that the Modern Monetary Theory could work. That is something we and many others have warned from repeatedly. After more than a decade of ultra-low interest rates, many market participants have forgotten how to behave in an environment of rising interest rates.

On this podcast episode, the WHVP team sits down together to talk about the U.S. bank crisis and the merger between UBS and Credit Suisse. In addition, the podcast will cover the stability of the Swiss banking system and the differences between the U.S. and Swiss banking industries and systems, and what Americans can do to ensure they select the right banks to partner with. We hope you enjoy it!

On Friday, March 10, the Silicon Valley Bank (SVB) collapsed after experiencing a classical bank run. Because of it, we are now confronted with a new collapse of the 16th biggest bank in the U.S... All of us need to understand how this has happened and learn about the banks we use. Further in this blog, we will explore the SVB collapse and the differences between banks in the U.S. and Switzerland. Finally, for individuals with personal wealth in banks, it will be informative about what Swiss banks can offer you amid uncertainty in the U.S. financial situation.

As we navigate through uncertain times, one phrase that has stood the test of time is "never fight the Fed". This adage is a reminder that the Federal Reserve holds significant power over the direction of the economy and the markets. Its decisions can have a ripple effect across industries, asset classes, and global markets. Understanding the Fed's role and its impact on the economy and markets is crucial for investors and traders alike. Nevertheless, it seems like in 2023 investors have completely thrown this saying out the window. Investors have been optimistic this year despite the Federal Reserve's decision to raise interest rates, believing that the rate-raising cycle may be over and we’re in for a soft-landing. The Nasdaq stock market is up nearly 15% this year, after posting its best January since 2001. While some believe that this is the beginning of a new bull market, we are of the opinion that this is just another bear market rally and that we will continue to experience ongoing market volatility for the time being.

January is the time to look ahead to the year. Sadly, way too much depends on the Federal Reserve and world central banks. Michael Howell writes: “It has been a bleak year for many investors. Global investors have lost $23tn of wealth…so far in 2022. …. That is equivalent to 22 percent of global gross domestic product” When bureaucrats create money out of thin air, they create a mess. Alasdair Macleod tells us: “Monetary policymakers face an acute dilemma: do they prioritize inflation of prices by raising interest rates, or do they lean towards yet more monetary stimulation to ensure that financial markets stabilize, their economies do not suffer a recession, and government finances are not driven into crisis? …. The inconvenient truth is that policies of monetary stimulation invariably end with the impoverishment of everyone.”

We hope you had a wonderful start to 2023! The beginning of a new year is always a great opportunity to look ahead and share our assessment of what to expect in the next twelve months. Before we do that, however, we would like to look back with a quick look at the most meaningful charts of 2022.

An impending recession, markets are continuing to fall, and the steady stream of news that companies are making job cuts. The news continues to look bleak, and with the recent stream of news, the economy and markets continue in the cycle of squeezing those participating in them. But there is hope for people looking to learn about what the job cuts can mean for the economy, investment market, and their portfolio, and steps they can take in protecting their wealth.

There has been a momentous meeting between China and the OPEC nations. Our blog will cover the happenings of the event and how they may affect Americans and their wealth. It will be important to learn about what to expect looking forward as you seek to protect the value of your hard-earned U.S. dollars.

Earlier this month the FED held its latest press meeting where another interest rate hike of 0.75% was announced. This was the fourth consecutive rate hike. During the press conference, a reporter asked about the expected positive reaction from the stock market to the announcement (it turned out after the conference the stock market has not reacted positively to the rate hike news at all) and Powell replied: “…We have a ways to go. And the last thing I'll say is that I would want people to understand our commitment to getting this done. And to not making the mistake of not doing enough or the mistake of withdrawing our strong policy and doing that too soon….”. This statement led most market participants to conclude that the FED is going to continue tightening for quite some more time. Consequently, while we do already asses the current situation as a technical recession, we do expect that in 2023 a formal U.S. recession will be announced and generally accepted.

With a recession looming over the U.S. economy and high market volatility, investors can be left scratching their heads on how to proceed with their investment activities. Moreover, once the recession does hit the U.S., more fear could seize the markets. Therefore, it is crucial to understand what can be done when planning to invest during a recession. The blog post will cover how U.S. Investors can act in times of economic turmoil and find the right partners to help them find the right opportunities and manage their emotions.

In this blog, we will describe the impact the metaverse may have on the financial world and asset managers. The metaverse is an exciting topic due to recent trends and developments in technology, pandemic restrictions, and the evolution of cryptocurrencies. In addition, working remotely and connecting with loved ones became difficult for many, but the metaverse proposed an interesting solution for these issues, even proposing an independent economy.

After inflation started to pick up last year due to supply chain issues, the war in Ukraine started threatening western stability even more. Long story short, we slid from one crisis into another, and then another. Investors, governments, and central banks seem to have erased the concept of economic cycles from their memory. They desperately try to dispute and fight an economic contraction, which is a normal, sometimes even healthy, short-term development. We are convinced that big economies such as the U.S. and the European Union (EU) are in a recession already despite them trying to change the definition in an effort to make the situation look less dire. Nonetheless, it is important to not let fear take over our decision-making abilities and long-term investment strategy. Times of crisis, no matter how painful they may be, also always offer opportunities.