Markets took flight overnight on Wednesday 15 August, as recessionary fears took centre stage again, following weak economic data from Europe and an escalation in the US/China trade war. The US markets fell by over 3%, following falls in value seen across the Asian markets. This however, is only what we have been predicting across the summer, in that an increase in volatility will occur as tensions between China and USA increase. An increase in volatility is not an absolute pre-curser of a recession. Our stance all year has been that there will undoubtedly be a recession, just not yet! A major current factor is negative interest yields across Europe, and Sweden’s bond market joined that not so exclusive market overnight. Again, negative interest rates are not a guarantee of a recession. The world can be rescued by a global fiscal stimulus, led from within Europe by Germany, who have room for deep tax cuts and the wherewithal to place incentives for economic expansion. So do not despair, we have seen this before and we now need policy makers in Europe and the USA to respond with policies to strengthen the Dollar and the economies. That’s what works long term.