1/ BEIJING AIRPORT:

In the West, people buy real estate to protect themselves against monetary fallout. In the East, particularly in China, people sell real estate because they are worried about price declines and oversupply.
That alone is funny. 😂 2/ However, not all real estate is oversupplied in China

I tend to believe that the supply of airports in Beijing is rather limited in time (only two).
I also tend to believe that an airport is prime real estate.
And the Beijing Airport trades below its cost of rebuilding.

1/ As I was reading through a Book from Jim Rogers from 25 yrs ago a few advices caught my attention.
Did your Uber driver pitch AI or Crypto?
Huho...
We don't have a 1929, for obvious banking and fiscal reasons we rather have a 1968 situation.

2/ Money market derangement is one type of abrupt bear market 1825-1873-1929-2008, none of the conditions for it are present today, but it does not mean you can't have a bear market. Inflationary bubble are a different beast.

1/ HONG KONG STOCK EXCHANGE: ANTITRUST ECONOMICS REVIEW
Review on Antitrust Economics
In this DocuTalk (a tech we developed at (you can try and buy it for your own document explanation purposes).
GraphCall.com
link.graphcall.com/Anticompetitiv…
2/ We review an old antitrust paper that uncovers many interesting aspects of the microeconomics of stock exchanges.

In the paper, there are discussions of exclusion practices between NYSE and AMEX, or territorial allocation, if you will.

1/ ok So let's be a bit more specific on #Silver, since some followers have questions. 2/ Prior to 2007 you have a credit driven bubble in in Black in 1 Copper is getting more spec than Silver. There is no bullshit monetary premium because the Fed has not engaged in massive M0 expansion since 1933 more or less.

1/ Did Japan flinch? I don’t think so. An alternative view from classical econ.

It's a good tactic. The JPY momo short got rekt. That was the objective. The objective for the BOJ is simply a balanced FX for imports vs exports, for the industrial companies. 2/ They don't really care about the casino (capital markets), they care about the real economy (their industrial companies). The thesis of the JPY momo short is weird. It's "JPY collapse", with no external debt?? Seriously??
This reason for the trade is inane.

1/ NOTHING BURGER (Except if you are a bondholder or a stockholder)

OK, so let’s put things in perspective on the idea of a Lehman moment or a sovereign debt unwind moment. 2/ First of all, we have recalled what is NOT happening in sovereign debt: the blow-up in sovereign debt yields “September 2022 style” due to an uncoordinated sell-off of USTs. Here we have the JPY currency bet on “JPY mayhem,” which we said is ridiculous.

1/ Today, we'll explain the precise mechanism of the balance of trade and how currency devaluation in relation to gold restores the balance of trade. Don't worry, we’ll break it down for you.

A devaluation becomes inevitable after extensive use of FX as reserves. 2/ This is well-explained by Rothbard (GraphFinancials are no Austrians, rather British Banking School, but Rothbard provided a detailed chronicle of the events). In 1925, GBP & USD were used as “FX as reserves” (reserve currency following the 1922 Genoa Convention's Article 9).

1/ BONDS’ ABSURDITIES:

The Fed is doing QT but is also doing QE (interest on reserves is outright QE) at the same time. As explained by Rodriguez at World So sterilization short-term but QE long-end, very slippery. 2/ The Fed pretends to have an inflation target but says it's too late if you wait for 2%.
apnews.com/article/federa…

1/ DO YOU THINK THE YIELD ON 10s AND 30s ARE HIGH?
Consider that McCulloch was proposing US gov bonds in Gold of 4 to 4.5% redeemable in Gold. 2/ A 50% interest rate in Turkey or 40% interest rate in Argentina or 4.5% in Fiat in the US has NOTHING to do with a rate in commodity redeemable currency.

1/ The reaction is to sell UST because of no repeal of tax cuts, (primary deficits are always bad for bonds) but war expenditures are usually the worst for bonds: explanation..

Global Markets Ramp Up the ‘Trump Trade’ After Rally Attack via @YahooFinancefinance.yahoo.com/news/global-ma… 2/ As Thornton explains war expenditures have the same effect as a trade imbalance, an export for which nothing is obtained in return.

1/ WHAT’S A “STAGFLATIONARY DEBT CRISIS” MENTIONED BY DR. ROUBINI?
You may have heard Dr. Roubini, also known as Dr. Doom, talk about a “stagflationary debt crisis.”
To many, it sounds both overly alarming and contradictory. 2/ The reality is that there is a “gradient” between stagflation and a stagflationary debt crisis.
In history, inflation and debt crunches are TOTALLY compatible, both in the 1970s and in Emerging Markets (EM).

1/ There is great anticipation of a public announcement that Saudi Arabia will allow the pricing of oil in other currencies. But, in fact, Russia and China are already trading oil in currencies other than the USD. How do we know this? 2/ Well, Russia does not use USD at all at this point. The same goes for India; it’s a known fact that they buy oil from Russia.
There is nothing absolutely “bizarre” or impossible about it.

1/x A bit philosophical today.
About the contract banks have w/ depositors,
The interference of the state in this contract,
Serfdom in the United States
Freedom in China
VAT taxes on precious Metals in China
“Collectible”, NIIT & Capital Gains taxes in the US
Let’s start 2/x
Henry Thornton 1802 in on what is a bank note issued by commercial banks. It’s a contract. In those days of Banks of Issues, different banks would issue different notes redeemable in money (specie is what is meant. A given weight of precious metal coinage).

1/25 🧵
How to Rug pull a system of “reserve ccy” in history? Not so complex;
it happened twice.
The 3rd is happening rn, (a smoother one)
How
In 1927 Rist from Bank of France is in NY with Strong and Montagu Norman and tells: "Enough FX as reserves, send me my #Gold". Game over 2/25
In the future episode we will explain the similarities and differences with Rug Pull II with France again in the 1960s asking for its #Gold. And after that, the current Rug Pull operated by China (arbing #Gold, a smooth one, actually not bad for US exporters).

1/23🧵
Currency raiders episode VI
“The losers get their stakes back”.
For people who had lived in a currency regime prior to 1922 or know very well those, a system where the country with a large trade deficit has very a large PPP would be unthinkable. It's being undone though. 2/23
It has to do with a device started about a century ago. In episode IV we discussed a trade-dominated regime in FX. Today we discussed the nothingness in trade of the system of accepting foreign FX as a reserve asset in foreign Central Banks.

1/x 🧵
We have bonds raiders for a long time now.
The Fun in is the ccy now
Today:
Currency Raiders episode V:
We will show that wars destroy bonds & ccy
AND
that the #Gold price used in the reserve standard Post 1922 was absurdly low, one of 2 causes of 1929 mayhem. 2/x
Betting on Bonds or holding the ccy with large war expenditures/primary deficit, logistical roadblocks, commodity hoarding is madness. This is what Kemmerer wrote in 1920 about the inflationary financing of WWI by the US.

1/25 🧵
Why will trade matter again for USD FX. It has to do with the type of monetary system that the world has in history, and the recent alterations. 2/25
In the next episodes of the currency raiders we will discuss how the FX worked under different monetary regimes and how trade is going to matter a lot more for the USD FX level (hint: Trade did not matter much since 1922).

1/12 🧵Where are we in the sequence?
a) First we get a classic private credit bubble (2008)
b) Then the debt is kicked at the sovereign level and losses are socialized
c) Then we get gov bond bubble with monetization
d) Then we start to get an inflationary bubble 2021-? 2/12
f) We get a duration shock that cuffs the #Fed otherwise we have more banks' bond pukes into BTFP
We get credit downdgrade and the market asks for more yield
g) The gov officials are in denial making it worse

1/10 🧵
Today we are going down the rabbit hole of money illusion with around 200 years of data.

So everyone is used to this beautiful stocks return chart right? 2/10 Now over 2 centuries.
During the most prosperous century of the UK, Stocks did... NOTHING in "performance"

1/5 🧵
Some people are puzzled by M2 is shrinking yet the economy is not collapsing.
With the classics? So easy to understand

2 ways to create bank currency (M2)

1) Deposit M0 at the bank (bills or Fed reserves)
- no direct impact on econ
2) New loan
- direct impact 2/5 This is the difference between Monied Capital and Means of circulation both inside M2. Tooke definition.

1/10 I just realized that the US Gov has to PAY to prop-up the USD in the CURRENT BUDGET through Quasi Fiscal Deficit.

Let's explain the Druck USD short. 🧵
Because QFD is your chickens coming to roost right there. 2/10 There WERE two timelines. The thing you pay now, the thing you owe in the future. Petrodollars and expansion of #TSY in foreign central banks.