Food Chain Disruptions

[errolanderson]

Like I said before, this crisis and some of trumps moves will renationalize a lot of production. People are seeing how vulnerable just in time supply chains are and even more so when that just in time provider is 10k miles away across an ocean and behind a communist curtain.

US was getting 90% of their pharmacutical antibiotics from china? Like who ever authorized such a short sighted move? There are lots of other examples. There will be companies who have to operate in a super slave labour area to make thier goods, those will be split up among china, vietnam, philipines and indonesia so probably to India now. Others will say the heck with it and repatriate their entire operation closer to their richest customer base which is the US.

Jazz, please take no offence, but the U.S. has to stop admiring themselves in-the-mirror. The American economy is already in recession . . . and they don’t even know it.

[jazz]

Jazz, please take no offence, but the U.S. has to stop admiring themselves in-the-mirror. The American economy is already in recession . . . and they don’t even know it.

That may be true, but that would mean 200 other countries are too and in even worse including china, all of it being papered over with CB printing.

[biglentil]

It's way too early to predict what the recovery of this black swan event will look like we are still in the 1st inning.

[ajl]

That may be true, but that would mean 200 other countries are too and in even worse including china, all of it being papered over with CB printing.

Yes the rest of the world is in a depression. The US economy is slowing but they alone still have a pot to pee in. If the ROW (rest of world) need the US to come to its rescue again, the least they could do is ask nice.

[AlbertaFarmer5]

Jazz, please take no offence, but the U.S. has to stop admiring themselves in-the-mirror. The American economy is already in recession . . . and they don’t even know it.

And as long as the rest of the world is in worse shape, the US can print their way out of the recession, investment (and the best and brightest) will still flock to the relative safety of the USD(and the USA), and they will come out the other side stronger than ever, at the expense of everyone else. As Jazz points out, this isn't the US in isolation, it is the entire world. And unlike the rest of the entire world, the US doesn't need the rest of the world for their own economy to be successful.

[macdon02]

In times of chaos, I think it's prudent to remember the rules applied to big money, the hedge funds and pensions, which is the same model almost all managers follow, the 60:40 split between equities and bonds. Yes they can dabble 0.5%~ into gold/ oil/commodities but the majority of their powder is in those 2 markets. They get their yield by dipping into EM countries like Turkey, Venezuela, the bottom of the desirable category as far as trustworthy. This is also minor %'s as far as total exposure because "diversity" is a good thing until it isn't. The euro, yen and loonie all look like they are headed lower, significantly. So if big money is regulated to hold bonds, do they want to own something that they will likely lose overall through the currency even though they gain in price? There's something like 17 trillion in negative yielding debt, most of it in Europe and Japan, so if you are deciding where to go why lose on yield and currency? Canadian and US bonds are both paying positive interest rates. This might be a overly simplistic analysis but pick a market, it's reversing course to the 2016 low or high. The last 3 years was a "reaction" move and now the trend since 2012 is resuming.

[errolanderson]

And as long as the rest of the world is in worse shape, the US can print their way out of the recession, investment (and the best and brightest) will still flock to the relative safety of the USD(and the USA), and they will come out the other side stronger than ever, at the expense of everyone else. As Jazz points out, this isn't the US in isolation, it is the entire world. And unlike the rest of the entire world, the US doesn't need the rest of the world for their own economy to be successful.

beg to differ . . . .

[jazz]

And maybe thats the catalyst for a reset. A crisis is always the time to implement new policy. If the US floats a new currency and the rest of the world is in a depression, then they are likely to go along with anything just like they did after WW2. There has already been one debt jubilee in the US. Who says another cant happen. I dont think confidence would be lost it there is only one country still standing, people would flock to that new regime.

[AlbertaFarmer5]

And maybe thats the catalyst for a reset. A crisis is always the time to implement new policy. If the US floats a new currency and the rest of the world is in a depression, then they are likely to go along with anything just like they did after WW2. There has already been one debt jubilee in the US. Who says another cant happen. I dont think confidence would be lost it there is only one country still standing, people would flock to that new regime.

Exactly, confidence is still only relative to the alternatives. If one looks at the US in isolation, it is an unsustainable mess, economically, and politically, and I wouldn't invest anything in that. Until you look around at the rest of the world, and it is a shining beacon of hope in comparison.

[AlbertaFarmer5]

beg to differ . . . .

And that is what makes it a discussion forum. I don't come to read people who agree with everything I say or think, I want my views challenged. You always bring up a lot of very valid and timely (and generally unpopular) information, and I always read, often follow up researching what you have to say.

If you have a bunch of surplus freshly printed currency of any type, and you need to invest it somewhere in the world, what and where looks less worse than USD denominated assets right now?