The recession is here and it is deepening. This is how investors can make money – Alfonso Piccatello



(Kitco News) — As the Federal Reserve prepares to raise interest rates on July 27 to fight high inflation, some analysts are predicting a recession.

Alfonso Piccatello, author macro compass, is one of them. Speaking with David Lane, Anchor and Producer at Kitco News, Peccatiello said, “We’re really in a recession.”

A recession is often defined as two quarters of negative GDP growth.

The real GDP of the United States in the first quarter fell 1.6 percent, and the Atlanta Fed’s GDP tracker sees a decline of 2.1 percent in real GDP for the second quarter. Second-quarter numbers will be confirmed later this summer.

Despite his negative outlook for the economy, Peccatiello suggested there is hope for savvy investors.

How deep is the recession?

Peccatiello uses indicators such as consumer income, household surveys, and personal savings rates to study the risk of a looming recession. Based on his research, he said the recession should last at least four quarters.

He also expected the decline in GDP to be in the range of “two to three per cent”.

Federal Reserve Chairman Jerome Powell recently pledged to raise interest rates to fight inflation. This could lead to a deeper recession. Peccatiello said, “So [The Fed] Willing to keep pushing until something breaks, until unemployment rebounds…they can and will slow inflation. ”

Powell spoke of a “soft landing” in which inflation is reduced without collateral damage to GDP. Picatilo said Powell was “dreaming” if he thought he could implement such a policy.




Investing in a Recession

As the economy recovers from recession, stocks are posting double-digit gains. According to Peccatiello, this means that when GDP is down, it’s an ideal time to buy public equity.

He said GDP would fall in “three or four quarters down the road”.

He also said that if the Fed backs off from fighting inflation, that would give a huge boon to the stock market.

However, with the Fed in a tightening cycle, Peccatiello said it was a bad time to hold “speculative assets” like Bitcoin.

“You have to sell all your speculative assets,” he said. “Bitcoin… is a speculative asset. It is an asset that needs risk sentiment to be strong to rise. This is exactly the opposite of where we are today.”

To see where Peccatiello has put his money and thoughts on gold, watch the video above.

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Disclaimer: The opinions expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to conduct any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will be liable for losses and/or damages arising from the use of this publication.

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