Founders: China has reopened, but nobody is buying it

Good Morning.

Housing starts and FOMC minutes today.

Banks all looking closer at China now.

The bottom line there is. High unemployment in youths, outflows of global investment capital, a high savings rate, no US demand for goods have all combined to stoke fears that things will get worse.

Its kind of a political backlash domestically. Fear of war, Covid still on their minds, economic slow down.. and noone is spending anything.

The Banks are starting to say that the problem can be fixed with helicopter money, fiscal money like the US Stimmie checks during Covid.

The effect is muted here so far but growing there in a chronic sort of way.

"The most urgent goal now is to stimulate household consumption, and it is necessary to use all reasonable, legally compliant and economic channels to put money in residents’ pockets," said Cai, 66, one of the most well-known economists in China to focus on demography and labor economics.

Remember what we said yesterday: China needs to consume. The press is all waking up to this narrative. Sadly, its a new narrative, but an old true story.. so it makes us wonder how bad it really is. and why all of a sudden the focus on it?

This is a cultural thing. China has a history of revolution. That has bred a caution in most of the country and a tendency to save.. and usually in Gold. The Covid experience may have made them revert a little. The fear of war even more so.

Meanwhile, America the island fortress seems fine. Helicopter money in China will probably make our Fed tighten even more.