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On 25.1.2017 at 4:38 AM, DutchTexan said:

All those countries with sketchy currency...

I'd count the US among those, not just the EU and others. The dollar has been bid up in expectation of US rate hikes and the FED unwinding it's balance sheet. We got 2 measly hikes in 2 years, and the FED always said rates have to normalize first before the unwinding can begin. At this rate it's going to take decades for rates to normalize, do people really believe there won't be another recession along the way, requiring them to cut again ? If they hike faster they'll cause the recession.

 

Not to mention the elephants in the room: The debt has gone up so much that the US (and other countries, ofc) can't even afford normal rates anymore, and who is going to buy all that debt if and when the FED unwinds ? Simply letting the debt mature is not an option. The debt is never actually repaid, only rolled over. Letting the debt mature requires the treasury to roll over the debt that matures at the FED by selling new bonds, which amounts to exactly the same as the FED selling those bonds directly.

 

Once the broad market comes to grips with this I believe the dollar rally of the last few years will be unwound as quickly as it came.

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50 minutes ago, Unimportant said:

I'd count the US among those, not just the EU and others. The dollar has been bid up in expectation of US rate hikes and the FED unwinding it's balance sheet. We got 2 measly hikes in 2 years, and the FED always said rates have to normalize first before the unwinding can begin. At this rate it's going to take decades for rates to normalize, do people really believe there won't be another recession along the way, requiring them to cut again ? If they hike faster they'll cause the recession.

 

Not to mention the elephants in the room: The debt has gone up so much that the US (and other countries, ofc) can't even afford normal rates anymore, and who is going to buy all that debt if and when the FED unwinds ? Simply letting the debt mature is not an option. The debt is never actually repaid, only rolled over. Letting the debt mature requires the treasury to roll over the debt that matures at the FED by selling new bonds, which amounts to exactly the same as the FED selling those bonds directly.

 

Once the broad market comes to grips with this I believe the dollar rally of the last few years will be unwound as quickly as it came.

Are you refereeing to the fact that the FED raised interest rates like twice in 10 years? Whatever the actual static is, debt has been very cheap for relatively long time. I wouldn't be surprised if the fed began starts raising interest rate drastically to undermine Trump economic policy.

 

Just about every nation is sketchy if you flesh it out. The real elephant in the room is the Chinese people. There's a fuck ton of em, you know? Chinese pollution stopped being a joke many years ago, but nothing ever changes. Even if they slammed over to 100% renewable energy overnight, somehow, it will take decades to undo anything they've already done. Culturally and legally China is very interesting. Did you know you can't legally own property in China for more than 70 years? Yet, that's irrelevant because buildings rarely stand for more than 20. I foresee the EU collapsing before 2020. I would be surprised if it didn't, or fighting in a world war. 

 

Not that I know anything, at all, just my thoughts. It's fun to watch markets in the current political climate. No one knows what it going to happen.

 

If French election goes to Marine Le Pen, then Brussels will get desperate. 

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2 minutes ago, DutchTexan said:

Are you refereeing to the fact that the FED raised interest rates like twice in 10 years? Whatever the actual static is, debt has been very cheap for relatively long time. I wouldn't be surprised if the fed began starts raising interest rate drastically to undermine Trump economic policy.

 

Just about every nation is sketchy if you flesh it out. The real elephant in the room is the Chinese people. There's a fuck ton of em, you know? Chinese pollution stopped being a joke many years ago, but nothing ever changes. Even if they slammed over to 100% renewable energy overnight, somehow, it will take decades to undo anything they've already done. Culturally and legally China is very interesting. Did you know you can't legally own property in China for more than 70 years? Yet, that's irrelevant because buildings rarely stand for more than 20. I foresee the EU collapsing before 2020. I would be surprised if it didn't, or fighting in a world war. 

 

Not that I know anything, at all, just my thoughts. It's fun to watch markets in the current political climate. No one knows what it going to happen.

 

If French election goes to Marine Le Pen, then Brussels will get desperate. 

If the FED hikes aggressively they'll cause the next recession. Most economists/Market participants are smart enough to connect those dots - if they do that then the blame will go squarely to the FED, not the Trump administration, they'd be doing Trump a favor since he'd be able to put all the blame on the Yellen FED and Trump does not like Yellen all that much anyway.

 

China has become the world's factory trough currency games (pegging, devaluing). It's no wonder they have so much pollution. If the west had to start producing all the stuff the Chinese make for us again we'd have pollution too. I think they're in much better shape economically then the West tough. All the production capacity is there. If things fall apart the Chinese can produce anything they need themselves while we have hollowed out our production capabilities and would first need to rebuild everything, but we don't have the capital to do so, only debt.

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10 hours ago, Unimportant said:

If the FED hikes aggressively they'll cause the next recession. Most economists/Market participants are smart enough to connect those dots - if they do that then the blame will go squarely to the FED, not the Trump administration, they'd be doing Trump a favor since he'd be able to put all the blame on the Yellen FED and Trump does not like Yellen all that much anyway.

 

China has become the world's factory trough currency games (pegging, devaluing). It's no wonder they have so much pollution. If the west had to start producing all the stuff the Chinese make for us again we'd have pollution too. I think they're in much better shape economically then the West tough. All the production capacity is there. If things fall apart the Chinese can produce anything they need themselves while we have hollowed out our production capabilities and would first need to rebuild everything, but we don't have the capital to do so, only debt.

But you can't depend on the general public to understand/accept that it could be 100% the FED's fault, in that situation. The global, far left is frothing at the mouth for justification to hate everything Trump. 

 

The second part of what you said is also very true about China. Although, as I said earlier about their infrastructure, it is all short term; the buildings and maintenance philosophy of the Chinese disallow long-term infrastructure. Without a market China wouldn't exist the way it does. Regarding pollution, their pollution is our pollution. It just hasn't been affecting us as much as say northern China, yet.

 

I think the trend for state sovereignty, individualism and independence will do wonders if nature is allowed to thrive.

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