Tuesday, 24 September 2024

China’s Panic Could Send Inflationary Shockwaves Around the World

We may be nearing a blow-off top
 
   
     

China’s Panic Could Send Inflationary Shockwaves Around the World
 
 
Folks, I've got to tell you, the news out of China overnight is just wild. It seems the Chinese government is pulling out all the stops to try and boost its slowing economy. 

The People's Bank of China is taking some drastic measures here... 

It’s going to reduce the seven-day reverse repo rate by 0.2%. They're also going to cut reserve requirements by 0.25% to 0.5%, which will free up around $142 billion in liquidity for new lending. 

But that's not all — the PBOC may cut the one-year MLF rate by another 0.25% to 0.5% as well. 

And get this, they're going to lower mortgage rates on existing loans by 0.5% on average, and cut the down payment ratio on second homes from 25% to just 15%. 

I mean, talk about some serious easing here. This seems like the Chinese government is really starting to panic a bit. 

They're encouraging borrowing of funds on the reverse repo to increase liquidity, and they're even setting up a swap facility to allow financial firms to tap the PBOC for liquidity specifically to buy stocks.

Can you believe that? 

The government is going to directly facilitate buying of stocks. 

That's the ultimate form of stimulus! They're watching out for No. 1 and don't seem to care much about the rest of us.

Now, the big question is, what impact is this going to have? 

If this leads to a big resurgence in Chinese demand, we could see commodities prices explode higher. That would mean instant inflation, especially if oil prices take off.

Traders might start front-running this, thinking everything's going to go higher if China's going to be buying stocks, 

So we could be in for a crazy, wild ride here, folks. China's pulling out all the stops to prop up its economy, and that could have major ripple effects across global markets.

It's going to be fascinating to see how this all plays out. But one thing's for sure — the Chinese government is not holding back in its efforts to boost growth. 

They're going all-in to try and get their economy moving again. We'll have to see if it works, but it's certainly a bold and unprecedented move.

Be sure and join me at 5 p.m. ET TODAY for “30 Minutes of Awesome” — bring your ticker for me to analyze in real time!

Just go here by 5 o’clock and join the fun!
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The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. The trades expressed are from historical data in order to demonstrate the potential of the system.
Jeffry Turnmire
Jeffry Turnmire Trading

I host my “Morning Monster” livestream at 9:15 a.m. ET each weekday on YouTube, and then “30 Minutes of Awesome” at 5 p.m. ET each Tuesday!

Please check out my channel and hit that Subscribe button!

I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.

I've been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it's the Eagle Scout in me. 


*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 
   
 

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