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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (210252)	1/15/2025 3:33:58 PM
From: carranza2	Respond to of 217656

Xi has no clue. He is simply not very sophisticated in the macro sphere. Xi is known to have asked "[w]hat's wrong with deflation? Don’t people like it when things are cheaper." This comment single-handedly shut down discussion about the subject among his mandarins at a time when vigorous (and free from retribution) intra-CCP debate was absolutely necessary. Example: this is what happened to Gao Shenwen, a top economist who dared suggest something everyone with two neurons to rub together knows, i.e., that the Chinese GDP figures are fudged. Specifically, "[m]y own speculation is that in the past two to three years, the real number [for GDP growth] on average might be around 2 percent, even though the official number is close to 5 percent." newsweek.com Nope. A mandarin will talk about deflation or why it is actually very bad for an economy, or how a deflationary spiral is a killer, or anything else of that nature, only at his own substantial career risk. Chairman Fat Panda knows better. Jack Ma can tell you all about it. A terrific example of how China's top-down directives just simply do not work. LOL! barrons.com Xi Jinping, electronics salesman? That is how micro China’s leader is getting about a macroeconomic challenge spinning out of control. China is facing deflation, and Team Xi is finally realizing it has been too slow to address the scourge. Look no further than Xi supersizing plans to incentivize purchases of smartphones, rice cookers, dishwashers, microwaves, water purifiers—anything to boost flagging consumer spending. This follows a wake-up call from the bond market, where yields on Chinese sovereign 10-year debt have plunged to record lows. An unprecedented 300-basis-point rate gap with the U.S. is widening despite a barrage of economic stimulus measures. A basis point is one hundredth of a percent. The drop in yields also sparked a fresh wave of speculation that Xi’s Communist Party absolutely loathes: that China is well on its way to a Japan-like lost decade. And this is even before President-elect Donald Trump returns to the White House spoiling for a trade war the likes of which Asia has never seen. Xi’s failure to confront China’s structural problems is now catching up with the economy. Thanks to the last 10 years of half measures on reforms and putting stimulus over structural change, Xi approaches Trump 2.0 with some debilitating pre-existing conditions. These include: a confidence-killing property crisis, near-record youth unemployment, local governments buckling under the weight of trillions of dollars of debt, and a 1.4-billion-person population more inclined to save than consume. What these wounds have in common is that they’re self-inflicted. The same goes for the pre-Trump headwinds slamming China’s tech sector, a dynamic hitting the broader stock market. Sure, President Joe Biden’s efforts to limit mainland access to U.S. technology inputs hasn’t helped. But Xi’s crackdown on internet platforms since late 2020 —starting with Alibaba Group co-founder Jack Ma—continues to hobble innovation and private sector development. It also has Wall Street debating whether China Inc. is “ uninvestible.” Even here, we’re seeing Xi’s penchant for treating symptoms, not underlying problems. Earlier this week, the People’s Bank of China said it would step up support for entrepreneurship. The idea includes encouraging “high-quality foreign capital” to invest in China’s battered tech sector. There is an obvious cart-and-horse problem here. It isn’t a lack of financing that has tech billionaires keeping a low profile and investors scared. The culprit is regulatory chaos. Xi’s reluctance to curb the dominance of state-owned-enterprises is giving global funds pause, not access to PBOC borrowing windows. The same pattern will limit Xi’s success in selling electronics to the masses. There’s nothing wrong with Beijing offering shoppers 15% subsidies for a range of goods and home appliances. It’s grand that coastal cities like Shanghai and inland metropoles like Hubei and Sichuan are handing out consumption vouchers. Ditto for Xi reading from Biden’s playbook in incentivizing electric vehicle sales. But making it easier to spend won’t necessarily bring consumers back. The problem is a lack of social safety nets to dissuade households from upping savings year after year. Put it all together and the bond vigilantes have every reason to push yields lower and lower. China is now on track for its worst deflationary streak since the 1997-1998 Asian financial crisis. On Wednesday, Beijing announced that consumer prices rose just 0.1% in December year on year. Factory prices dropped 2.3%, extending their deflationary trajectory to a 27 th straight month. Aging populations, as Japan taught us, are inherently deflationary. Folks in their 70s don’t spend the way 20-somethings do. With the unemployment rate for Chinese between 16 and 24 stuck above 17% —or higher given the vagaries of Beijing’s data—what good will subsidies and rebates do? In 2024, China saw an alarming increase in in-person protests. Most were manufacturing workers on the front lines of the overcapacity troubles that China is exporting around Asia. China’s pension system is under increasing strain as tens of millions of young workers stop paying into it. As economic confidence goes, these dynamics aren’t promising. Nor are the optics of Xi going after economists who dare speak the truth about the rough 2025 that China faces. The price China is paying for Xi’s glacial response is deepening deflation. There are hints Xi is picking up the pace on stabilizing both factory-gate and consumer prices. This includes giving the PBOC more latitude to cut borrowing costs. Yet with Trump returning on Jan. 20, one wonders if PBOC Gov. Pan Gongsheng missed his easing window. The yuan is under intensifying downward pressure, a side effect of bond traders betting in lower yields. This has the PBOC setting its daily reference rate stronger than the psychologically important 7.2 per dollar level. Though a currency devaluation could be China’s fastest route to battling deflation, there are several reasons Xi is avoiding it. A weaker yuan would increase default risks among property giants with big offshore debt burdens. It might squander progress morphing the yuan into a reserve currency and set back efforts to reduce leverage among state-owned enterprises. And it would surely make President-elect Trump’s head explode. Despite the 60% tariff threat Trump is holding over Xi’s own head, the incoming White House is in charm-offensive mode. Trump even invited Xi to his inauguration. That, at a moment when Shigeru Ishiba, prime minister of staunch ally Japan, can’t even get a meeting with Trump. Yet nothing would put Trump on a trade-war footing faster than the yuan dropping sharply. It would make Scott Bessent’s first job as Treasury secretary labeling Beijing a currency manipulator and working with Trump’s trade team to revoke China’s most-favored nation status. And 60% levies on mainland goods could quickly become 200%. Talk about a balancing act. Now, Xi’s options are being complicated by the bond vigilantes taking matters into their own hands, driving Chinese yields sharply lower. That, in turn, has Beijing clashing with currency speculators eyeing a weaker yuan. It’s high time Team Xi woke up and acted boldly to counter the perception that deflation is burrowing its way, Japan-style, into China’s future. The problem won’t take care of itself. And it leaves China poorly positioned to withstand the Trumpian storm heading Asia’s way.

To: carranza2 who wrote (210252)	1/16/2025 1:17:19 AM
From: TobagoJack	Read Replies (1) \| Respond to of 217656

re <<Big Mac as a good PPP indicator is absurd.>> perhaps you are again correct. Observation, just-saying and 'nuff-said, that a troy oz of gold (~$2,700) can be swapped for 474 Big Macs in USA, and 897 Big Macs in HK Message 34981418 , meaning it actually makes some sense to ship Big Macs from HK to US. Whatever the basket of goods, HK basket is either comparable or better and very rarely worse than basket of same goods in USA. Whatever the case, the PPP deflator applicable to USA GDP is NOT-1.00, but some number between 1.01 and 9.99, a wild guess Following up to this note, the hospital in HK is Singapore HQ-ed and publicly-listed, and indubitably equal amount of gold can be used treat my knees to same or better standard in HK, at rate of 135 : 40 or 3.38 more knees, a rate even better than achievable for Big Macs, and yes, the knees are made in the same factory, and the doctors are trained in either US, Australia, or UK, and the equipment are the most modern as the hospital is brand new Message 34956751