Today I posted by one-hundred-ninety-fourth YouTube video: China Retaliates, Act 2 of the U.S./China trade war.
The National Congress of the Chinese Communist Party has rubber-stamped a third term as president for Xi Jinping–a move that required amending the Chinese constitution. Because of his age, this is likely his last term–a legacy term. Legacy terms can be dangerous in states dominated by Great Leaders because these leaders are looking to make big moves and lasting changes to secure their place in history. During this “transition,” there has been a delay in China’s response to U.S. trade restrictions, but that’s likely to change now and I expect a very strong response from the Chinese government. In the next few weeks, we can expect to see retaliation in the technology sector: rare earth minerals and refined lithium. China controls 90% of the world’s rare earth supply as well as processing for that supply. Restrictions on the exports of that material to the U.S. have been very effective in the past and extremely damaging to US technology companies. The second move, I think, will be market moves to restrict access by U.S. companies to the Chinese economy. Companies like Tesla and Apple and other big U.S. actors in China can expect harsh restrictions. The third one is a real wildcard: what happens with Taiwan? Xi’s recent speech to the National Congress was very aggressive about the Chinese government’s claim that Taiwan needs to be quickly reintegrated into China. Xi has a somewhat similar problem as that of Vladimir Putin: he has created an extreme hardcore right wing, which is putting pressure on him to be more aggressive. So, he’s going to make a move and however he moves, it will rattle the financial markets. That’s the Chinese agenda for the next four weeks or so and it makes me very hesitant about putting money into technology stocks. Additionally, look to cut risk in Apple, Tesla, and Taiwan Semiconductor Manufacturing.
Here’s the link:
ALERT! Go to https://www.jubakpicks.com/bear-marke… to download a free ebook guide to what to sell and when to make the biggest gains and prevent losses in this Bear Market Rally.
Sign up for a paid JubakAM subscription here: https://jubakam.com/register/paid-mem…
Add Jim on Social Media:
TWITTER: https://twitter.com/JubakPicks
FACEBOOK: https://www.facebook.com/jubakpicks
INSTAGRAM: https://www.instagram.com/jubakpicks/
FREE EBOOK: https://www.jubakpicks.com/bear-marke…
