Back in 2001 China was allowed into the world trade organization. As far as I was concerned, this was inevitable. China had become the manufacturing arm of the world. They were growing in leaps and bounds, and we were sending trillions of dollars into their economy.
Back in 2001 China was allowed into the world trade organization. As far as I was concerned, this was inevitable. China had become the manufacturing arm of the world. They were growing in leaps and bounds, and we were sending trillions of dollars into their economy.
As all this growth was taking place, and China looked to be part of the big boy club, it was quite evident to me that “at some point” they didn’t just want to be the planets labor system. They wanted a seat at the upper echelons of high finance.
As time moved forward, this played out, as they petitioned to be part of the IMF’s “SDR” system. What’s that you ask? The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. From 1969 to 2000, the SDR “basket” was three currencies. The US Dollar, the Japanese Yen, the Pound Sterling. Then the Euro, which was created in 1999 was added.
Well, in the years 2009,10,11,12 etc, I was on record many times saying that not only is China petitioning to be part of this reserve asset, they would gain acceptance. That happened in 2015. I got it right. The following is from the IMF itself:
The RMB’s inclusion is an important milestone in the integration of the Chinese economy into the global financial system. The IMF’s determination that the RMB is freely usable reflects China’s expanding role in global trade and the substantial increase in the international use and trading of the renminbi. It also recognizes the progress made in reforms to China’s monetary, foreign exchange, and financial systems and acknowledges the advances made in liberalizing, integrating, and improving the infrastructure of its financial markets. We expect that the inclusion of the RMB in the SDR basket will further support the already increasing use and trading of the RMB internationally.
In addition, while data disclosure is not a formal criterion for a currency’s inclusion in the SDR basket, issuers of reserve currencies generally meet high transparency standards. The Chinese authorities have recently taken welcome steps to increase data disclosure and enhance their commitment to multilateral data initiatives; for instance, reporting the currency composition of reserves to the IMF. Also, the Chinese authorities continue to work with the Bank for International Settlements on their reporting of the Chinese banking sector statistics. These developments will lead to increased acceptance of the RMB among official holders of foreign exchange reserves.
So, China got its entry into the big boy club. But there was something else brewing that was never really reported by the main stream press, nor on such outfits like CNBC. China was gobbling up gold like it was going out of style. How many times did I write something along the lines of – “The Chinese culture is ...
On Monday, we learn that consumer sentiment is the highest since the end of the Great Recession.
On Tuesday, we’re told that Americans’ fear of hunger, eviction and foreclosure are at record highs.
On Wednesday, a new analysis tells us that GDP is expected to grow by 6% in the 1st quarter of 2021.
On Thursday, an article shows that over 10 million people are still unemployed, with tens of thousands of restaurants and bars permanently closed.
And on Friday, one strategist suggests that the stock market will grow by another 30% this year.
Another one says that because stock prices are so overpriced relative to earnings the market is due for a major correction.
Quite a week, eh?
And there it is. Joe Biden, who probably doesn’t know what he’s saying any more, is coming after guns in a big way. Second Amendment? Not absolute in Joey’s eyes. It shouldn’t surprise anyone, the left has been on that little treasure hunt for years.
There are some things swirling around in my head, that I’d like to talk about, but I’m simply not prepared for it yet. Why? Because if my theory is right, and unfortunately it could be, we are witnessing the biggest Satanic, evil movement, in the history of mankind.
Gold vs. Bitcoin. Who’s going to win? Right now, gold is taking an absolute pounding, and Bitcoin continues to hold ground or gain. Who’s the ultimate winner here?
The question is, do they work. And the answer is, yes and no. A chart will NOT tell you what is going to happen tomorrow. No matter how highly regarded some technical analyst might be, a chart tells you just one thing perfectly, it tells you what Happened. Not what’s going to happen.
I’m sure a bunch of you are moaning and groaning and saying colorful words about me. It’s okay, I’ve heard them all. But the fact still remains, charts show you where a stock has been, but it does not tell you where it’s going.
Check this: Boulder County District Judge Andrew Hartman blocked Boulder from enforcing bans on assault-style weapons and large-capacity magazines on March 12. Less than two weeks back, they stopped bans on things like AR-15s and whammo, a lunatic shooter shows up and kills 10 people. Out of the clear blue, because you know, if it was still banned, he wouldn’t have killed those folks, right? Give me a break.
Last March, in 2020 “they” decided that in a year, they would end the “SLR” program. What’s that you ask? Policy manipulation that gave banks more latitude on what they could hold, reserve requirements, etc.
Two issues back, I wrote an article called the “Charging World” as we continue to see the push away from hydrocarbons and into an all electric world. I said that I personally would love to see it, because it makes so much sense. But I ALSO said that it is unrealistic to believe we’re going to pull this off.
The $1.9 trillion stimulus bill helps low and middle-income families but way too little. It’s only for two years.
What people don’t seem to understand is that all the incredible things that we have, were made by and because of capitalism, and the freedom to invent things. If the market demanded it, people would make it. AAPL didn’t make cell phones to show off their engineering prowess, they made phones because people with money wanted to buy them. It’s terribly easy to understand. Unless of course you’re a 20 year old college kid, wearing 150 dollar sneaks, sporting a 200 dollar leather jacket, wearing 70 dollar jeans, talking on a 1000 dollar phone, going to a 70grand a year school, while eating 5 meals a day. Then you’re oppressed and/or suppressed. Offended by everything, and obviously the world is unkind to you. Somehow. Oh, and it all needs to be fixed. Because of, well, some reason.
Most of you probably know what this past week was like in market land. Enormous swings up and down. The NASDAQ losing 2K points from its high just 14 sessions ago. Entire indexes giving up all their 2021 gains.
Shortly after the open on Friday, things went south again. The NASDAQ peeled off another 350 points, the DOW plunged red by another 200+ the S&P was blood red by 40. It was another slaughter day. Until….
Over the past few days, I have been looking hard at the miners and shaking my head at the beatings they’ve endured recently. Some truly wonderful mining and streaming operations, have had their stocks cut to the bone. It’s crazy. I think we could very well be looking at at least a nice bounce in the mining area.
“This alone gives gold and other commodities a generally inverse relationship with the USD.”
But nominal rates don’t necessarily sync with inflation. As Tiggre explains, a nominal 1% interest rate is actually negative if inflation is greater than 1%. “This is why gold and nominal rates can rise together during times of higher inflation.”
So, from up here in the cheap seats, it seems to me that Amazon and other major companies have the scale and scope to work out insanely cheap rates with UPS, so they can offer “free shipping,” while the “retail” guy gets to make up for all the money they’re losing on Amazon.
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