China’s long-term vision for Iran involves building its manufacturing sector using SSS companies to create an unbeatable export base with cheaper labor and China’s manufacturing expertise.
China’s oil imports from Iran are between 80-90%, and if disrupted, China may block or invade Taiwan, potentially halting America’s chip imports and creating a liability for Russia.
The upcoming BRICS summit in July in Rio de Janeiro may see China and Russia unveiling new trade, financial, and currency policies to counter the US.
Europe is expected to implode within 5 years due to financial difficulties, with banks being a key factor in the collapse, according to analyst Simon Hunt.
The equity market is predicted to bottom in Q3 2023, followed by a huge rally over 18-24 months due to central bank and government stimuli.
10-year bond yields are forecasted to reach double digits in the next 18-24 months, with US inflation potentially spiking to 13%.
Gold prices may correct to $2,500 over the next 6 months before potentially doubling to $5,000 by 2028.
The US is expected to finance its $9 trillion debt by reducing the 10-year bond yield to 3% by the end of 2023.
Global economic and political instability, including US inflationary policies, central bank debt, and geopolitical conflicts, are driving gold prices to record highs near $3,200.
Central banks are price-sensitive buyers, waiting for pullbacks to $2,700-$2,600 before purchasing gold, strategically timing their acquisitions based on investor behavior.
Institutional investors, including family offices, high-net-worth individuals, and sovereign wealth funds, are increasingly buying physical gold over ETFs in the past two years.
High gold prices have priced out Western retail investors, shifting demand to silver as a more accessible hedge against currency volatility and inflation.
Gold prices face potential corrections due to escalating trade wars, but renewed buying is expected at $2,850 or $2,650 levels, given the persistently negative economic environment.
Future scenarios for gold prices include impacts from escalating trade wars, potential global recession, or geopolitical détente, with each path having distinct implications for precious metals markets.
Tariffs aim to level the playing field against foreign subsidies and currency manipulation, bringing prices to compete equally with American producers who struggle against cheaper imports like subsidized Canadian lumber.
Vertical integration and technology investment are key for U.S. manufacturing competitiveness, exemplified by Tesla’s 85% U.S.-made car parts and humanoid robots, contrasting with legacy automakers’ complex global supply chains.
Reshoring manufacturing and reducing reliance on foreign supply chains is crucial for U.S. national security, especially in high-tech industries like rockets, cars, machinery, and drones.
Tariffs are part of a negotiating process, potentially resulting in a 5-10% blanket tariff on imports, with exemptions for certain products, rather than the initial 54% on China.
“Shock and awe” tariff announcements are seen as necessary to bring foreign countries to the negotiating table and secure concessions, despite causing short-term chaos and market fear.
Free trade only works when both countries avoid market manipulation, currency manipulation, and producer subsidies; tariffs respond to the realization that other countries are playing a “manipulated trade game”.
Historically, the U.S. used high tariffs to protect infant industries and fund the government before shifting to income taxes as tariffs decreased.
The U.S. must protect its manufacturing base and level the playing field with tariffs, as it did during its founding, to build up American industry and avoid being crushed by incumbents.
The U.S. must balance high tariffs and reshoring manufacturing with maintaining the dollar as the global reserve currency, which requires running structural trade deficits.
The “Two Americas problem” highlights the divide between the ultra-wealthy and struggling working class, with tariffs seen as positive for the working class but negative for the wealthy.
Bold predictions include new all-time highs for stocks and Bitcoin by late 2025, with questions about whether Bitcoin will finally decouple from the stock market and other risk assets.
Tariffs are expected to be seen as better for the country in hindsight, despite extreme reactions and short-term pain for the working class.
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