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Friday, February 21st
“Globalization has created this interlocking fragility. At no time in the history of the universe has the cancellation of a Christmas order in New York meant layoffs in China.”
-Nassim Nicholas Taleb
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Markets Today
🌏 Asia-Pacific: Up
🇪🇺 Europe: Up
🇺🇸 United States: Down
🛢️ Oil: Down
⚡Crypto: Up
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Major Market Events
- UnitedHealth sinks on report of DOJ probes over Medicare billing, billionaire Bill Ackman attacks the company on X (formerly Twitter)
- Reddit stock dives post-earnings after 6-month rally
- President Trump teases Fort Knox gold audit, long subject to speculation about if the gold is actually there
🤔 My Thoughts
China is firing the money gun again, and pumping currency into their shaky market.
In the short term, the Asian markets are certainly responding positively… but they face the same inflation risks that we do…
And if we had to bet, we’d say this is NOT a smart longterm play for the Chinese stock market.
But of course, that’s not always the goal of powerful people in central banks and government. That’s true about the US and Europe, and it’s definitely true about China.
And who this is good for, is Chinese oligarchs looking for exit liquidity.
Some investors are saying this could drive the price of gold, as wealthy Chinese stockholders take advantage of the increased liquidity to move money to hard assets.
But while gold has plenty of tailwinds, we don’t think Chinese liquidity is one of them – for one simple reason.
China has very strict controls on gold. And wealthy investors who want to preserve some wealth outside of the reach of the powerful Chinese government, want assets that can travel across borders, which is not gold.
What is it?
Well you can probably guess.
It’s Bitcoin.
This Chinese liquidity pump could be a huge Bitcoin catalyst, and frankly this has been the explicit use case for crypto from much of its early adherents.
And sure enough BTC is rising alongside the Chinese markets.
So while this may be unfortunate for the goals of Xi’s quantitative easing, we expect BTC could break back through the crucial $100k mark as Chinese wealth buys it up.
