Founders: China Deflationary Sh*tshow

Good morning:

Today. Not the usual pre-day posts. But on topic.

In a bifurcated East/West world where noone trades anymore… our inflation is China/Russia’s deflation. We pay more for raw materials from them if they will even sell them to us. So we raise rates lowering our demand. We buy less, they experience deflation.

The world economy slows because of dollar trade dropping. We slow from a higher rate of inflation than they do.

Low oil prices hurts Russia’s GDP, and helps China’s purchases. But when your biggest customer goes on strike (The US) and your other customers haven’t really gotten online yet, that is deflationary for you.

The irony: if Russia is making less money selling oil to China, then Russia has less money to buy goods from China.

Anyway… China’s failure to recover is real and worth noting for Gold longs

Have a good one