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Topic: Chinese (Read 63 times) previous topic - next topic

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  • Erich 
  • [*][*][*][*]
Chinese

Re: Chinese
Reply #1
Not surprised
http://www.kitco.com/news/2018-01-10/China-officials-recommend-slowing-or-halting-U-S-bond-purchases-Bloomberg.html

This  should be positive for PMS

I believe the Chinese look to increase their wealth. That said, dollar value is decreasing, lowering the wealth or stated another way, the purchasing power of their US debt holding. Also, with federal reserve support, interest rates are rising slowly diminishing nominal value of their holdings slowly, which does not add to the holding's wealth. Trump has openly stated he wants the dollar value lower, meaning he wants the wealth of people and other entities holding their wealth in dollar denominated assets confiscated. This is very different from Reagan's statement that no nation ever built a strong economy by trashing its currency. I believe the Chinese move is a smart investment decision being made in their interest w/o concern for ours other than how our situation will affect them. Sounds a little like Trump.
As an add on, that comment about wealth confiscation occurs w/o the wealth holder having any direct say in the value of the dollar. The end result is counter party risk dependent on a stable dollar. Trashing the dollar causes a loss of faith in a faith backed asset, not good for America, but good for the PM space.

  • ken
  • [*][*][*][*][*]
  • Global Moderator
Re: Chinese
Reply #2
Not surprised
http://www.kitco.com/news/2018-01-10/China-officials-recommend-slowing-or-halting-U-S-bond-purchases-Bloomberg.html

This  should be positive for PMS

I believe the Chinese look to increase their wealth. That said, dollar value is decreasing, lowering the wealth or stated another way, the purchasing power of their US debt holding. Also, with federal reserve support, interest rates are rising slowly diminishing nominal value of their holdings slowly, which does not add to the holding's wealth. Trump has openly stated he wants the dollar value lower, meaning he wants the wealth of people and other entities holding their wealth in dollar denominated assets confiscated. This is very different from Reagan's statement that no nation ever built a strong economy by trashing its currency. I believe the Chinese move is a smart investment decision being made in their interest w/o concern for ours other than how our situation will affect them. Sounds a little like Trump.
As an add on, that comment about wealth confiscation occurs w/o the wealth holder having any direct say in the value of the dollar. The end result is counter party risk dependent on a stable dollar. Trashing the dollar causes a loss of faith in a faith backed asset, not good for America, but good for the PM space.
Excellent analysis.