The Ripple Effects of US Levies
#268 An update on US Indices, Copper, Gold, BTC & US Dollar-Index
Introduction
A lot is happening that impacts the world’s economies. With the US tariff levies coming into effect, this will soon affect US consumers and producers. As many US stocks have an international reach, this will certainly have a worldwide effect.
Ultimately, it is not the exporter that bears the cost of the levies, but the importer, who will pass some or all of this cost onto us as consumers and producers. This could potentially lead to further increases in inflation, which we have already experienced over the past few years.
The recent announcement of 50% US levies on steel and copper will likely impact the prices of many products we use daily. This includes household appliances, air conditioners, computers, smartphones, televisions, cars (EVs use 2-3 times more copper than conventional cars), and everything used in plumbing and construction materials. Energy bills may also rise due to increased costs for the energy grid, as they all require copper.
Copper is often a good indicator of the economy's health so that we will take a close look at copper in this week’s edition.
With decreased consumer demand and higher production costs, we may eventually see individual stocks and the overall stock market decline.
It may take some time before the effects show up in diminishing revenues, but I can't think of any US stock that will be immune to the increase in levies. It will also take time before the ripple effects from the various levies create a larger wave that pushes stocks down. As many US stocks have an international reach, this will certainly have a worldwide effect.
The US levies announced in recent months have led to a decline in confidence in the US Dollar. I forecasted this decline back in November last year, and in this week’s post, we will review where we are on the 30-month cycle in the US Dollar Index.
Continuing the uncertainty about US economic policies, Gold and Bitcoin have been surging to new highs in recent months, which calls for a new update.
Looking at the different long-term cycles, we might not be heading into a recession right away. In this week’s edition, I’ve included planetary and cycle analysis of the US indices, copper, gold, BTCUSD, and the US Dollar Index to see what is likely ahead.