February 5, 2020
If there's one thing we know from the events of the past decade (post-financial crisis), with $3 trillion in currency reserves, a pegged/artificially weak currency, and with global trade partners unwilling to poke the bear, they can print yuan and fund whatever they need or want to.
In early 2009, when commodities were crushed under the weight of a global credit freeze and demand destruction, China came in as the big buyer, "building strategic stockpiles" (as it was described in a Bloomberg article at the time). Commodities bounced sharply from the lows …
Despite a global economy that was still sucking wind for the years following the failure of Lehman Brothers, oil went from crashing to from $147 to under $30, to running back up to $100/barrell …
With the above in mind, as I said yesterday, I suspect they turn to the beaten-down commodities markets next and start stockpiling cheap commodities again.
Here is what that broad commodities chart looks like now …