Federal Reserve and Forex
Currency Wars have begun and there is no clear winner in sight.
China says its prepared to keep its currency at whatever levels necessary to avoid an international crisis.
When you consider the fact that the riots in HONG KONG were initially started because of the way powers at be in that part of the world selectively chooses its wording. We can only wonder why China would choose to release such a powerful statement.
China has managed to perfectly prop its currencies up since the election of the 45th president back in 2016. WTO reported China exports declined another percentage point in 2022 after climbing to 15% worldwide in 2021, Chinese world merchandise imports were reported to be 10.6% vs world merchandise imports of 13.2% for the U.S. and Exports stood at 14.4% of world merchandise for China and only 8.3% for the United States. The Chinese Communist Party is executing strategies laid out by the current and previous United States Administrations granted North America has during that same time period managed to import 25% less merchandise. With the United States
Strategies like letting their banks fail and taking them over, something that many in the current administration were begging the United States to do in 2008. The "Made in China" label is so widely accepted due to taking the ideas/inventions of others and executing them better, sooner and at a much cheaper price. The EV sector has been the latest example of China reinventing the trending innovation and exporting back to the very people who began the important work. China has admittedly and explicitly stated that they want to make/sell more goods on their home soil and our current administration set them up to do so perfectly by tariff.
China already accounts for 47% of World GDP and we all know they're not going to stop there.
Bottomline is recent developments like BRICS expanding and the economic gains of Russia while currently under thousands of sanctions has helped China gain influence globally.
The United States may want to offer a decent proposition before it is too late but with U.S. elections in the coming months the people in charge of making those decisions can not afford to seem weak on China at the moment.
Federal Reserve complicit in bankrupting the Country.
While the United States expensive pivot to onshore manufacturing finally starts to break ground and China's economy seems to have finally hit bottom after 4 years of nothing but problems since COVID19. Investors are left to decide if they want to gamble on the United States during its EV evolution or take part and would could be a China recovery that results in a new global power.
The strength of the Dollar globally has become both a gift and a curse.
While its purchasing power and reputation has made the Dollar arguably the safest asset to own in recent history.
Interest Rates AKA the only real way to insure the Dollar's stability has been treated as some sort of economic vehicle to drive the financial markets to all time highs, while the people who actually earn the dollars have been treated as something similar to an open road for the 1 percent to test just how fast they can drive the debt of the economy to unmanageable levels.
It has not been all bad though, the economy has been growing and consumer spending is now at record levels.
We can argue about how much risk we are now exposed to all day long. But when you compare 2019 to 2009 we seem to be much better off now.
That is not the issue here at all, the issue is when a correction does take place or any other event that can cause cash to flee the system happens for that matter. How much will the Fed, which is currently cutting rates at record employment and all time stock market highs with no real justification, regret misusing the ammo for the best weapon we have to stop the bleeding.
The Dollar and Oil could fall dramatically from here.
I know how controversial it is to talk about the most sought after currency on earth taking a complete nose dive from here is.
It is something that must be discussed if you want to make any sort of investments. The "Greenback" has become a target to many around the world, most notably Europe.
While their currencies fall to levels very close to those of the USD many people are praising the Strength of the dollar.
When the Yuan loses value China is labeled a manipulator but when the EURO AND THE POUND fall rich americans praise celebrate and starts to add those currencies to their portfolio. The EUR/USD pair has had the worlds attention for years now.
We completely ignore the fact that the devaluation of currencies across Europe has become a serious threat to us globally. I've always looked at FOX News as a foreign network looking to divide America and Broadcast Europe. When one USD is Equal to one Euro and one GBP, the real currency/trade war will begin.
