Thread by @Jkylebass

Another take on China’s shutdown of Shanghai, Shenzhen, Guangdong, etc. China is desperately in need of crude oil, LNG, food, basic materials, base metals, and more. Putin’s invasion/massacre has created additional energy scarcity, inflation, and skyrocketing food inflation. 1/12

Whilst China hasn’t had any material problems with the virus from Wuhan in the past, it’s interesting that their draconian lockdowns (in conjunction with telegraphing the purchase of fewer cargos of LNG and crude) are forcing global economists to ratchet growth expectations 2/12

lower whilst concurrently shifting future demand projections for commodities lower. Everything China desperately needs to acquire is trading down in price as a result of the lockdowns. If we all take a look back, the primary driver of China’s current account moving into 3/12

negative territory happened to be the Chinese citizens traveling and spending abroad(they could only spend USD, EUR, YEN, etc).COVID abruptly halted Chinese travel,gave the CPC supreme censorship power (Chinese travelers no longer open to uncensored internet) 4/12

and allowed a crushing takeover of Hong Kong without further incident (COVID appeared at the zenith of HK protests). Either the occurrences of COVID are perfectly coincidental (and incredibly helpful to the CPC’s existential crises) or a much more insidious modus operandi 5/12

is at work. Remember, rampant food price inflation was one key grievance that led to the Tiananmen Square protests/massacre as well as the Arab Spring. It’s too late for Xi and the world to avoid the food price spike as it will certainly worsen next year given input pricing. 6/12

Economic slowdown projecting will be pushed to Wall St economists by the CPC on one hand while positive speeches by the likes of Liu He are designed to keep Chinese stocks from resuming their free fall. Think about the LME nickel disaster. China’s largest nickel trader, 7/12

Aka “Big Shot” had/has the largest short position in nickel on the exchange. It’s widely accepted that nickel is (and will continue to be) in a global deficit due to the insatiable demand for nickel-rich batteries in EVs and Russian production being removed from the market. 8/12

Why would China’s largest nickel producer/trader have such an enormous short position if he can’t deliver into the expiry? Is China manipulating nickel prices lower in an effort to keep a cap on them? China’s HKEX bought the 152 yr-old London Metal Exchange(LME) in 2012. 9/12

The LME sale to a Chinese entity should have been blocked for obvious reasons. The trading halt, the cancellation of over $4 billion of trades, and the subsequent investigation into the BUYERS all smells like a corrupt investigation with Chinese characteristics. 10/12

Remember, it was the giant short position of China’s largest nickel trader/producer that refused to pay margin calls (along with China Construction Bank). A comprehensive review of China’s actions begins to look like a beautiful mosaic of controlled manipulation of global 11/12

Commodity markets. In the long run, I believe that it will pay in spades ♠️ to be long all of the commodities China is insidiously manipulating lower. Today’s prices have all of this factored in. #ChinaExposed #China #oil #nickel @AmbQinGang 12/12