Friday, May 5, 2017

2 Interesting Thoughts Right Now

1. Kyle Bass spoke to Bloomberg about China's issue with WMP's and how it's on a scale way more massive than the GFC, approximately 5 times larger than it. Commodities are currently blowing up and the Shanghai exchange is following cue. This might actually be the bear that shoves the bull off the cliff.

2. The second interesting development is the Japanese frenzy into Bitcoin. Japan is pushing for digital currencies and is actually dropping the 8% consumption tax in July. However, even with the 8% tax in place, JPY makes up more than 50% of trading volume in the past 24 hours. I bet you either couldn't care less, or you are completely flabbergasted at the sheer volume and interest in BTC coming out of Japan. I know I am the latter. $200 USD up in 4 days is no joke.

Needless to say that a smack in broad commodities is at least short term negative for both oil and gold.

I might be looking to pick up some precious metals soon, the decline is already 14 days strong. If China does have a systematic failure, I can assure you that precious metals would... shine. Lol, dat pun.

Back in Feb, I said that I don't think that Oil is recovered. The path ought to be bumpy, and if we head lower (and it seems like it), I wouldn't mind to accumulate more.

Regarding China, I do see it as a huge problem, but like Kyle Bass said, the timing is anyone's guess. It's probably best to avoid China related stuff for a while. Quite a few smart people have been predicting a devaluation of the RMB and it seems like that might really happen.

In Singapore, I doubt digital currency will be taking off anytime soon. There are just a few exchanges in Singapore (Itbit, Luno, CoinHako) and most people have (1) no idea what it is (2) no idea what you can spend it on (3) no idea how you can get it.

I do have an account with 1 of the exchanges, but it's more of an emergency getaway plan. Could I buy bitcoins, move them into the dark web, wash it and disappear and then cash out on the other side of the globe? Yes, yes I can.

As much as I am in denial, I am quite certain that the future would be digital currencies of some sort. Personally, I'm a gold and silver kind of guy.

2 comments:

  1. With so many doomers & gloomers, won't be surprised if there's a huge melt-up in global stocks over the next 1-2 years. There'll be hell to pay eventually in the financial markets and real-world economy. But I think the crap moment is still a few years out.

    As for PMs I treat it as portfolio insurance and like all insurance it is a cost item. This is assuming basic law & order, society & govt are still functioning. If you want to escape, you'll have to do it fast in S'pore coz in a real national emergency situation, it is 100% guaranteed that govt will block all Singaporean males from leaving. You'll have to swim over to M'sia or Batam.

    In a real society-breakdown kind of emergency, PMs value will also plunge. Plenty of stories from Soviet crisis in the early-1990s to the Mid-East to Africa where people/gangs with guns & power simply demanded ounces or kg of gold coins for miserable pieces of mouldy bread or muddy water, if they don't just simply kill you outright. Guns, ammunition, food, water, & medical supplies are much more valuable "currencies" and resources.

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    Replies
    1. Hi Anon,

      I hope for the worst as soon as possible, but that is probably the secret wish of all young people with capital waiting to be deployed.

      Personally, I think if SG comes to a point that PMs are useless, we're basically toast and it's a total reset for everybody. I don't think its feasible to prepare for that outcome. I'm banking on things getting chaotic overseas, and that would lead to upticks in PMs for me to profit locally.

      Unfortunately we can't have any guns or ammo here. I'd definitely be a fan of that, haha

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