(08-15-2019, 08:45 AM)B2hibry Wrote:

(08-06-2019, 07:01 AM)StroudCrowd1 Wrote: China fixed their currency after being called out by their daddy. Step off the ledge Hurricane!

It's still way over valued when considering their debt.

Actually, they devalued their currency in order to counter the tariffs.

What we are seeing in the financial world is the fact that China is hurting because of the tariffs, and that is affecting the global economy.  Many countries have lowered their prime interest rate to the point where some are even in negative territory.  That essentially means that buying treasury bonds from those countries means that you get charged for loaning your money to the government rather than being paid a dividend.  We saw our stock market take a major hit over the last couple of weeks because a lot of foreign investors are pouring money into our treasury bonds because they still offer a positive rate of return (not much right now).

Because of all that the yield on a 10 year treasury bond fell below the yield on a 2 year note (aka an inverted yield).  When this happens it is typically considered to be an indicator of a recession.

The thing is, all other indicators still point to a strong economy.  Low unemployment numbers, good earnings data from retailers (Walmart had a good report today), etc.  I think that the market will bounce back eventually from this, but it will remain volatile over the next couple of weeks.

The other problem for China right now is the chaos in Hong Kong.  Should the communist Chinese military use force to quell the protests in Hong Kong it could get really ugly not only for our markets, but the global economy overall.

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