February 19, 2020
The Chinese liquidity boom continues to float all boats. And it’s probably very early on.
Below is a look at the performance of global financial markets since the PBOC rolled out the bazooka of policy measures to open the month — in an effort to counter the drag on the global economy, from a lockdown of the world’s second largest economy (China).
The performance in the above table is just from the opening of this month! Essentially, everything is up, except bonds (relatively flat) and foreign currencies. Money is flooding into dollars and dollar-denominated assets (commodities).
Remember, it was at the depths of the global financial crisis, that China came in on a buying spree of beaten-down global commodities. Is this a repeat?
Here’s what they did to crude oil during that period …
In early 2009, it looked like global demand would never come back. China stepped in and began gobbling up cheap commodities. They ran oil prices back up to more than $100.