Semiconductors from China will face a ‘special-focus type of tariff’: Lutnick (youtube.com)
Hang Seng has outperformed S&P since beginning of 2024 because that market got dirt cheap. The AI trend that ended in US shifted to China.
The returns might not be made in the US for a period, they might be made elsewhere. Canada, Australia, Brazil, natural resource economies, could well-outperform the US. Commodities.
Commodities, you buy when the cycles down, you sell when the cycle's up. Crops can change year by year, because you have a season every year, or in Brazil two seasons or whatever, but minerals you can't just bring them on every year, you need investment, and you can have periods of 10 years of gains.
Gold is the most important reserve asset right now, not treasuries or USD. Silver half the time trades like gold (othertimes it's an industrial).
Major producers of platinum are Russia, SAfrica and Zimbabwe. It's 50% below it's 2011 peak.
US has lost $9t since Feb19 on stocks, but hasn't made basically anything on the bond side. ... When Lehman went down people lost $8t in stocks but made $3.5t in bonds, and when Covid hit, lost $9t on stocks but made $4.5 on bonds. ... When Lehman went down, the fiscal and monetary response was $4t. When Covid happened in 2020 and there was a regional bank crisis and then elections, fiscal spending in Washington, they spent $16t.
Yellen issued tons of Tbills, placed bond volatility not in the election issue but pushed out to 2025 2026 placing bond volatility in the hands of the republicans. Bissent has to go sell these bonds, not a great spot, he has to try to calm things down.
Trust not where it was, in the bond market. US borrowing a lot in the front, finding ways to fund it through pounding taxation throughout the globe. ... For 30 years, funds have just allocated in the US, buy more and more in US. Now they just have to take it down, maybe to where it was 10 years earlier, ie at least $1t.
If China hints they'll dump US bonds others will try to frontrun.
Will taxation control be taken away from White House? White House is just trying to undo 40 years of unruly spending, and no manufacturing base anymore (hallowed out) in the US. They're trying to do it in 4 years, and keep the effects as much as they can away from midterms.
Last 10 years was 60/40, and of that 60 stocks a lot was BigCap tech, growth. Maybe moving to a 30/30/40, commodities, bonds, stocks. More value, growth.
Copper to rebuilt LA, Ukraine, Gaza.
Usually, treasury yields up, it means people will invest more (capital inflows), which boosts the USD. Not this time. Investors beginning to shun dollar-based assets and questioning US as global bedrock of funds. This is just a possible emergent pattern, not an abandonment. Treasury usually holds $500 to $800b in cash, a buffer, but that had gone to 0 and had to quickly be propped up.
Treasury usually does regular, predictable issuance, it doesn't try to play the market and just issue when they need money.
China probably wouldn't sell USD becuase that would push up the value of their Yuan and creating risks to treasury market and global security which would harm them. Yellen.
US creating opportunity for China to work with US allies like Japan, because US seems more isolated and untrustworthy.
A jump in inflation expectations. Tariffs might mean increase in $4000 per household.
A redditor said on the maybe 9% decrease in value of USD, ‘Shows how dangerous it is to go your portfolio in full cash. Once they turn the money printer on to deal with Trumps mess, we are going to see markets rise. But not necessarily your purchasing power rise. At the end of the day you want to own as many assets as possible.’
Another said ‘Yeah i hold quite some dollars and my account is displayed in euro. It just dropped 4% overnight without any stock movements.’
Bitcoin tracks BigTech stock holders. Frothy or tight for the individuals. Does gold track its holders?