Macro Mondays #68 - China bringing a potent knife to a gunfight?
Sep 30, 2024
auto_awesome
The podcast dives into the recent rally of Chinese-linked assets, questioning whether the government's stimulus will truly change the economic landscape. It weighs temporary market uplifts against structural issues, such as declining exports and a housing crisis. The upcoming liquidity wave in the U.S. is analyzed, alongside its effects on risk assets. Lastly, the conversation touches on monetary policy, highlighting how a softer labor market could lead to aggressive rate cuts and enhance returns for investors in precious metals.
29:31
AI Summary
AI Chapters
Episode notes
auto_awesome
Podcast summary created with Snipd AI
Quick takeaways
China's aggressive stimulus measures and economic policies aim to boost domestic consumption and stabilize the housing market amid export challenges.
Innovative yield-generating options for gold and silver transform traditionally inert assets into productive investments, allowing for wealth growth opportunities.
Deep dives
Maximizing Wealth with Precious Metals
Owning gold and silver can effectively protect wealth against inflation, but traditionally, these assets do not contribute to wealth growth. Many investors simply hold these metals, incurring storage fees and experiencing a decrease in physical ounces over time due to market movements. However, an innovative platform allows gold and silver owners to earn yields on their holdings, transforming these inert assets into productive investments. By participating in precious metals programs, clients can earn returns of up to 5%, or even 12% for accredited investors in specific offerings, all paid back in physical ounces, thereby compounding their wealth annually.
China's Stimulus Measures and Economic Outlook
In response to economic challenges, China has implemented a series of aggressive stimulus measures aimed at reviving domestic consumption and stabilizing the housing market. The introduction of rate cuts and fiscal packages signifies a strong commitment by the government to enhance economic activity, particularly as export momentum weakens. While these measures, which include a substantial equity rescue package and support programs for unsold homes, may provide temporary relief, they have not fully addressed the underlying structural issues in the real estate sector. Consequently, there remains skepticism about whether these stimulus actions will be sufficient to prevent an impending recession, highlighting the need for ongoing vigilance in monitoring China's economic trajectory.
Implications of Liquidity Additions in the US and China
Liquidity additions are expected to significantly influence both the US and Chinese markets in the upcoming quarter, driven by a series of policy changes. In the US, the Treasury's upcoming bond issuance, coupled with potential adjustments to the discount window for banks, suggests a substantial liquidity influx could reach upwards of a trillion dollars. Concurrently, China's recent measures to inject liquidity through interest rate cuts and reserve adjustments are poised to stimulate economic activity. Collectively, these dynamics create a favorable environment for risk assets, indicating a strong potential for positive market movements as liquidity flows in.
The rally in Chinese-linked assets is one of the most bizarre seen in newer financial markets history. Is the Chinese stimulus package a game-changer or is it insufficient to structurally turn the tide? Meanwhile, a wave of liquidity will arrive in Q4.
Monetary Metals pays a yield on gold and silver in physical ounces of metal, with free storage and insurance. Right now, you can earn 2-5% on gold, paid in gold, and up to 12% annually on silver, paid in silver, in their latest offerings. Go to www.realvision.com/metals for more information.
Check out the episode on youtube to see the graphs & videos we look at.
Remember to check out the links below. FREE macro newsletter - https://stenoresearch.com/free/
Find out more at www.stenoresearch.com/subscribe
Host: Andreas Steno & Mikkel Rosenvold
Find our Crypto coverage here - https://stenoresearch.com/category/crypto-moves/
If you enjoy our content, Please subscribe to our Youtube Channel: ➡️ https://tinyurl.com/23hp3vah
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode