Monday, April 3, 2023

The economy as of 4/2023

Disclaimer: All my books and views are for educational purposes only. Consult your financial advisors before taking any actions. All the links are the opinions of the authors, not mine. I am not responsible for any errors and/or opinions. All information and prices are subject to change without notice.
 

This article covers the economy, investing and globalization as of 4/2023. Here are my random thoughts/comments triggered by a 1.5-hour YouTube video by two knowledgeable gurus, whose ideas you may not find in major media.

https://www.youtube.com/watch?v=Q6NIDJZdQH4

 

·         Our banking problems. They are due to the careless decisions of the Federal Reserve Bank. They raised interest rates in order to fight inflation, but they did not consider the consequences. If Biden did not take actions fast, it could be another global banking crisis.

Easy money allowed corporations buying their own stocks that boosted up the stock prices and hence the managers’ stock options. You are lucky if you have mortgages with long-term, low-interest rates. I bet that many sectors including the housing sector would take a long time to recover. If you have a 5-year mortgage, you will have a tough time to pay the interest at a higher rate.

·         Globalization allows the country that produces the best products at the least costs. China does that. She ships the products to us, and in return we pay China with our USD, that are printed recklessly. It forces China to buy our treasury bonds. It cannot last forever. In addition, China would not help us to buy more treasuries as she did in 2008. Actually China has dumped our Treasuries from 1T to the current 750B.

·         China’s digital Yuen could take over. It is already so to some small extent, particularly after weaponizing the USD and seizing assets of foreigners / countries we do not like. We can only turn around by cooperating with China, ending the war and solving our many internal problems such as our falling infrastructure.

·         It will be hard to bring back manufacturing to the US. Our restaurants and similar sectors are begging for workers, while we are laying off good-paid professionals. Many factories are moving from China to developing countries, and most of them cannot afford our high-tech products and airplanes.  

·         My biggest investing plunder is: I reacted too early when the fundamentals were bad but ignoring the good technical. If I followed my own books, I would not buy contra ETFs betting the economy would collapse, as the market was peaking in 2021 and 2022. Learn this lesson.

 

Links: War with China: https://www.youtube.com/watch?v=ou30FgekLFc

 

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The above is from my book "Investing lessons: successes and plunders" from Amazon.com.

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