China’s after party and the gold rise.

FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
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The country developed itself building roads, telecomunications, networks and hiring cheap rural labor force. We reach the economical mature stage and the demographic trend of young income-earning workers, it’s ready to swing in a growing class of pensioners. The over-investment, highest corporate debt ration in the world ( ), surging debt/loans ( )and rising home price, will drive China in the middle-income trap. The past has pointed out very similar evidence, giving warning signs in Japan in the early 1970’s, Taiwan in the late 1980s and Korea in the early 1990s. The shrinking labor force will put pressure to raise wages and on the Goverment to keep the vast mob under control.

The West societies is struggling with debts, decreasing the export that have powered Chinese growth. China’s central bank has been forced to sell foreign reserves, buying Yuan to keep it steady vs US dollars, but at the same time profit from international event such ad Brexit, to decrease it silently, against major currency. The weak exports are helped by Yuan depreciation, buti it won’t be enough to bust the economy. The Chinese stock market is largely closed to foreigners and it’s more difficult to see a reflaction in the global trends. Banking sector it’s off the official books. In addition to the crumbling situation, we also have the capital fleeing: overflows by overinvoicing imports from tax haven island such as Samoa.

US can’t control the red dragon and its currency and will rise accuse to increase tension. Trump will win the election and enforce the military spending, multiplying the presence in the Chinese South Sea. China is intesifying training and drills ( ), building military bases out of the water, to bolster their claim on Oil             and gas fields ('s-hawks-pressing-for-forceful-south-china-sea-response/7677434 ). A maritime standhoff will rise the incertitude on stock market and shipping, especially for physical commodities . The spike of OIL             price will drug down the possibility of a fast recovery.

Chinese growth is unbalanched, uncoordinated and unsustainable. China need to face this impleasent and unavoidable phase of market cycle with internal/external pressure and only after having spoored its mistake, it wil be back on truck, full of surprises for the ones who bet against.
Comment: Once again we have the confirmation that advertaisment is usefull for political campain no matter if is good or bad. Trump gonna win the election, the dollar and pesos gonna drop, gold and US defense company gonna rise. Tension with China will increase and a good excuse for no rate hike wil be found. Let's go gold!

Comment: Trump won not big's the perfect man to play the puppet role and give the american slavers a new hope. The establishment need a weak dollar and a weak dollar gonna have...but the show has just started... Brexit and Trump election were easy to guess, because both were precise date and we are in the minefield, everyday is a good day to blow up...
Thanks for the great analysis and the resources!
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