Hot cold hot cold, bipolarism continues unabated....

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    Hot cold hot cold, bipolarism continues unabated.

    https://www.cnbc.com/2019/10/14/wha...about-the-partial-trade-deal-with-the-us.html

    Now China is having cold feet if POTUS and the US can be trusted on the "deal" (see link above), so much for the "lovefest" when obviously there is a lack of mutual trust.

    And so the Dow futures is pointing to a >100 point drop and gold inching back up and closing in on USD1500/oz once again.

    The take on this is that despite the positive discussion, the only upside has been the suspension of the Oct 15 (tomorrow) additional 10% tariff on Chinese goods, while others are yet to be signed and agreed - even this suspension can easily be removed on short notice at a whim and fancy of POTUS via a twit.

    Meanwhile, President Xi has not minced his words when he declared that "anyone who attempts to split any region from China will perish, with their bodies smashed and bones ground to powder", a message directed at the HK democracy movement seeking greater autonomy for HK and external countries seeking to exert influence and support for the movement.

    Uncertainties and risks as I highlighted in late September will unfold in the months ahead, so expect them to be protracted and with that, market volatility could well continue to be a feature for longer than most of use would have hoped for. Time will tell but perhaps the market rally over the last sessions may have been a suckers rally and the market mistakably sold off gold thinking it could be hunky dory once again. The reality is that the confluence of these protracted risks and uncertainties would continue to weaken further the already weak foundations of the global economy in the months and quarters ahead which in turn risks triggering default risks for the debt markets.

    Debt market implosion if it were to occur is a build-up process, like white ant colony eating away the foundation until all of a sudden , the entire house caves in. By the time we get to know a default , the default has already occurred and market response has always been swift.  The longer these risks and uncertainties protract, the sooner and deeper will the economic contraction be and because the global debt situation we currently have is significantly larger than that during the GFC of 2008, this is all the more the reason why this is a global recession the world can ill afford to have.
 
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