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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (5217)	8/23/2022 8:23:14 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 10709

It seemed to me that you missed the explanation for why the secular bull is coming to an end by attributing it to the Chinese RE. Did I misunderstand you? You said that: you are probably right that Chinese real estate bust will probably cause inflation here As you said, inflation is almost nonexistent in China, so they can't be exporting it. From my post, here is my explanation for the end of the bull market prosperity of the last 40 years was built on the back of global liquidity pump that did not create inflation because China and the emerging markets provided cheap goods for that liquidity. Now that the supply chains are being dismantled and there is no room to print more money, that cycle is coming to an end. Printing more money in this environment leads to higher inflation. Not printing more money will also lead to inflation b/c we are busy dismantling globalization and supply chains. The global liquidity pump that I was talking about was the Fed, ECB, and BoJ printing presses that could not push the inflation higher no matter how much they printed or lowered the interest rates. BTW, China is not interested in defending its currency. They want it lower to improve their economy. The reason they are selling their USD assets is not to for defending their currency but because the US declared a trade war. If you go back to when Trump threatened to impose tariffs on the Chinese goods, in this very same thread I said that as a major goods exporter, China is vulnerable in a trade war, but as a major debt exporter, the US is vulnerable to a capital war. It's been happening as I thought, though milder. The bottom line is that change is always painful and as you said, the US is changing its positioning and now China is the defender of global trade while the US is fighting it. It is this change that will bring about the economic pain and the secular bear market. If the US backs out, then we can delay (possibly for a long time) the secular bear. Right now this seems unlikely. But perhaps once the pain is felt, the policy makers will change their mind. Or maybe the EU will fracture.