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   #61  

DV52

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^^^^ hmm.......... me thinks not Jack!!! I tend to blame the antics between your particular leader and his counterpart in "Schin-ya”.

When will POTUS learn that his commercial enemy in Asia has a devastating weapon which America can't match: The ability for a country's Government to unilaterally set its own currency exchange rate has got to be the commercial equivalent of a nuclear weapon!

Don
 
   #65  

dafrazi

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^^^^ hmm.......... me thinks not Jack!!! I tend to blame the antics between your particular leader and his counterpart in "Schin-ya”.

When will POTUS learn that his commercial enemy in Asia has a devastating weapon which America can't match: The ability for a country's Government to unilaterally set its own currency exchange rate has got to be the commercial equivalent of a nuclear weapon!

Don
There are some market limitations on what China can do with their currency value. They can effectively use it to minimize the impact of Trump's tariffs but they can't use it like a nuclear weapon without causing significant harm to their own economy. The shifts China is making now can halve the impact of the current tariffs. Luckily for the USA, most major commodities are still bought on sold in dollars; so, a weak yuan hurts China's ability to buy raw materials.
 
   #66  

DV52

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^^^ Agree (about the balancing effect of the low purchasing power of yuan abroad)!!

BUT (and there is always a "but"), the crucial aspect of this countering effect is the state of China's balance of trade numbers which answers the question as to whether the overall benefit of a lower yuan to Chinese exporters are greater than the overall disadvantage to Chinese importers.

Just to add some perspective on this pivot point - "in 2019, exports will rise 3.7%, pushing up the trade surplus to USD 492 billion". Sure this is only about 11% of China's GDP - but it's a compelling advantage to have as a negotiating weapon (regardless of whether it's deemed to be nuclear, or sub-nuclear)!!!

Nevertheless - whilst I suspect that the rest of the world (including many companies within America) would prefer for the US/China trade wars to be resolved, for us here in the very deep south there are both advantages and disadvantages - given that we export lots of iron ore to China.

Don
 
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Jack@European_Parts

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https://www.yahoo.com/finance/news/yield-curve-inverts-for-first-time-since-2007-102034083.html

YIELD CURVE INVERTS: Recession indicator flashes red for first time since 2005

Dow Jones Industrial Average (^DJI)


DJI - DJI Real Time Price. Currency in USD

25,479.42-800.49 (-3.05%)At close: 4:20PM EDT










MARKET ROUTDOW PLUNGES 800, WORST DAY OF 2019

The yield curve inverted, flashing a recession warning.



 
   #70  

Uwe

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Yes, the media wants a recession badly. They don't want Trump to be able to campaign on a good economy next year.

-Uwe-
 
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DV52

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Uwe - I'm with you 101%!!! I hope that your view about the robustness of the US economy is correct - but my hope is more about the impact of a US recession on the rest of the world rather than how it impacts the re-election ambition of Mr Trump (yes, unashamedly pure self interest)

And I hope that Wednesday morning's yield dynamic where the U.S. 10-year Treasury bonds momentarily dipped below the yield on its 2-year counterpart was an aberration!!

And I hope that your Mr Greenspan statement (as reported by Bloomberg) that "nothing is stopping the U.S. from getting sucked into the global trend of negative yielding debt" is indeed fake news.

And I hope that the practice of global central banks in engaging in an unprecedented amount of monetary easing ($15 trillion of government bonds worldwide now trade at negative yields) is not a portent for the state of global economies

But - what if I'm in denial (and I'm not referring to the river in Egypt) ? ;)

Don

EDIT: Jack - perhaps it's time for us both to re-look @ cryptocurrencies as a safe-harbor (I'm not sure that more traditional edging instruments like Gold yields will work this time around) ?
 
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   #72  

Jack@European_Parts

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EDIT: Jack - perhaps it's time for us both to re-look @ cryptocurrencies as a safe-harbor (I'm not sure that more traditional edging instruments like Gold yields will work this time around) ?
Funny you should ask that Don't

I was thinking of it for the last 5 years and pretty much been playing with scenarios in ultra short funds and trading the volumes.
I learned my lesson a decade ago about long or held positions.

Never again!
Liquid or nothing is my motto now.
 
   #73  

Uwe

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Uwe - I'm with you 101%!!! I hope that your view about the robustness of the US economy is correct
Oh, I'm not saying the US Economy is "robust" by traditional standards. There's way too much debt in the system (not just government debt) for it to be "healthy", and a recession is already several years overdue.

I'm simply commenting on the fact that the media wants a recession, which is an unusual, or maybe even unique thing, and if they talk about it enough, it could become a self-fulfilling prophecy. Let's face it, markets the monetary system are heavily influenced by confidence, and if they can shake that, they might just get one sooner rather than later.

-Uwe-
 
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DV52

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Funny you should ask that Don

I was thinking of it for the last 5 years and pretty much been playing with scenarios in ultra short funds and trading the volumes.
I learned my lesson a decade ago about long or held positions.


Never again!
Liquid or nothing is my motto now.
I like your motto - liquidity means that you nimble and can react quickly to changing market conditions (which is a good thing). Problem is though that it assumes that holding the funds isn't costing you. In the past, folks that were fortunate enough to be in your situation were concerned (in the main) about holding costs being an opportunity cost.

However, "a decade ago" I very much doubt that as an American investor you needed to also worry about negative interests rates.

"That will never happen in the USA" I hear you thinking - maybe you are correct but negative yield curves are utter madness!! Perhaps it isn't so important for commercial, or junk bonds, but Government bonds have minimal credit risk (there is almost zero risk of the bond issuer not paying the face value of the note). With other predictors appearing in neighboring financial markets (across "the pond") it's prudent for investors to listen when the Government bond market speaks and the day of reckoning must come - because the market demands it.

Perhaps the answer is the precious metals market - it has a history of being a safe harbor. But the more that folk use this hedge, the more that instruments like Gold, platinum and silver will be out-of-step with general market risk. The interesting new comer is cryptocurrency -it's now semi-matured as a financial facility. I wonder what role (if any) it will play?

Don
 
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   #75  

Jack@European_Parts

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Well I don't believe in owning either but I would be open minded to trading the volatility when adequate numbers permit the flow, that and earnings.
Maybe a straddle but less likely right now.
 
   #77  

Uwe

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negative yield curves are utter madness!!
Agreed. And negative interest rates even more so.

Perhaps the answer is the precious metals market - it has a history of being a safe harbor.
PMs have been doing well lately. Gold is over $1500.

"Gold is money, everything else is credit". :)

-Uwe-
 
   #78  

Jack@European_Parts

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No Uwe, Money is money and gold is gold.

I would rather trade gold financial instruments than hold the actual gold.

When shit falls apart..........

Abilities applied with actual Knowledge/TRUST/Weapons/Food/Water/Shelter/CLANS or secret hiding places are than money then sir!
 
   #79  

DV52

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^^^^ No Jack, when the shit falls apart - the shit falls apart! :)

Holding precious metals script certainly does have its advantages over the physical stuff. But the benefits of "virtual ownership" are limited to the quantum of the financial Armageddon that befalls the market.

Plus there really ain't any substitution to opening up your own personal gold vault and seeing the distinctive glint of light that bounces off those yellow bars. I'm surmising of course in my case, but perhaps you have first hand experience of that lighting effect (only kidding)!!

Don
 
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   #80  

Jack@European_Parts

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Nope.... I'm just a dumb poor bastard from Chicken and Gravy Montgomery New York & has the rank of Majestic Asshole!

I'm rich in VAG repair and virtual RT forum adventure!
 
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