Stock Market Wealth

WRENCH IN THE GEARS: China Cutting Rates TO ZERO!

by | Nov 26, 2019 | Stock Market Wealth

China’s economy is performing POORLY; in fact, it is in massive trouble. The Debt/GDP ratio is something out of a horror film and they’ve just cut rates again!

China’s currency, as well as its key interest rates indicators, are both under massive pressure. The problem is that it looks like they can’t close their purse and stop spending like westerners.

Take a look:

Courtesy: Zerohedge.com

As you can see, two of the sectors that are piling on debt in record amounts are the financial sector and households, SIMILARLY to what happened in the U.S. in the years leading up to the 2008 Great Recession.

Over the past few days, the Chinese government managed to frighten cryptocurrencies into submission and Bitcoin fell to $6,530, a multi-month low and part of its longest-ever streak of down days.

China wants to weaken its own currency in a way that doesn’t scare their billionaires and millionaires to switch to non-fiat currencies, so they’re attacking Bitcoin and delegitimizing it. China’s government just threw a wrench in the gears of cryptocurrency investors, and that’s not the last time we’ll see them scare off demand.

The facts are plain and simple; China isn’t as effective and nimble as it was in the 1980s and 1990s. They can’t find good uses for debt, as they did before.

Take a close look at how $2.3 of newly-issued credit only adds $1 to GDP growth:

Courtesy: Zerohedge.com

Since we live in an EXPENSIVE world, where a record amount of money is chasing the safest assets and isn’t willing to take risks in speculative sectors, where investors rather tie-up funds for a full decade and get NO RETURN – or worse, a NEGATIVE return on capital with government bonds, the trade deal between China and the U.S. is such a bullish backdrop, since it is a catalyst for real growth.

Trump’s re-election hopes make for a terrific incentive for him not to play around with this anymore.

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We know that China’s bank and its government cannot afford to regress further than they have up to this point!

Both countries have stretched the negotiations of the Phase 1 deal far enough and the markets sense that both are ready to sign on the dotted line.

Courtesy: Zerohedge.com

Even with this, the investment world is agitated constantly. This year, most have missed out on the S&P 500’s best year since 2013. Investors are shaking their heads because indices have continued higher, while they’ve been buying bonds OR sitting on cash piles.

Central banks have caused investors to lose their COMPASS and sense of direction.

Check this out:

Courtesy: Zerohedge.com

Buybacks have resulted in liquidity shrinkage of the S&P 500. Stocks are becoming scarce. Good businesses are not cheap.

As I’ve said before, the past 10 years have created two economies: one for the rich and the powerful (corporations and governments), who get to borrow whenever they want at ZERO cost and make obscene gains; and another for the rest of the population (80%-90% of the world’s people), who are fighting for each dollar they earn and save.

Therefore, keep implementing the 14 principles I’ve laid out in front of you, which paved the way for me to prosper, in spite of these challenging times. Today, I will share the final ones with you.

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This next principle nearly always surprises everyone I share it with, but it has been central to my success and I want to share it with you.

  1. Stay Healthy: Keep your body fit, your mind clear and your soul cleansed. I exercise every day for about 45-50 minutes in a group environment, which has REALLY helped me to get more out of my workouts.

I also eat as healthy as any human can, sleep well and avoid drama.

I read one book a week (about 60 minutes uninterrupted, per day) and make sure to think about the way I treated people and the world at the end of each day and consciously choose to improve the next day.

Be positive and confident; if you start to take care of your body, I guarantee that your attitude will change towards everything.

  1. Properly Allocate Time And Money: If I could take a video of your life for one month and record each minute of it, how much of it would be dedicated to reaching your goals?

To get rich in the 21st century, you need TIME to think. Make sure you allocate at least 2 hours each day to allow your thoughts to become crystal clear. You must create inertia.

Don’t waste time on tasks that others can do, while you can generate a higher ROI.

Lastly, don’t waste energy on worries, fears or doubts. You’ll feel empty by the time you need to do something important.

Get busy living!

Best Regards,

Lior Gantz
President, WealthResearchGroup.com

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