저자: Kevin · 외국인
요약 보기
중국 재개방이 인플레이션을 자극할 수 있다는 Bloomberg 주장을 반박. 중국 GDP와 CPI, 미국 CPI, 유가 간 상관관계가 거의 없다고 분석. 유가는 시추 증가로 하락 추세 전망, 미국 인플레이션은 주택 인플레이션 하락과 함께 연준 예상보다 빠르게 둔화될 것으로 봄. 임금-물가 악순환과 장기금리 상승은 리스크 요인으로 언급.
다듬은 글
I should definitely be asleep but this whole China is going to reignite inflation disaster is stressing me out and so I have a response that I believe is very valid for you to document for your investing Journey uh yes it is December 27th so maybe I'm also motivated to post a video just an hour and 55 minutes before midnight to remind you about that expiring coupon code tonight because well that's what happens the coupon codes expire and then the prices change like the ride along with Kevin the shadow Kevin for a day price that's definitely going up because we you're like overbooked at this point anyway okay let's talk about China so I just read a piece in Bloomberg you know look all right I'm gonna reserve my opinion on Blue Book they argue that Global rate markets should be concerned about the inflationary impact of China's reopening that even though China is having a surge of coveted cases now and in the short term we could have supply chain disruptions thanks to covet cases and Factory shutdowns and so on and so forth after this is all said and done once we get through the coveted Peak give it a couple months hey hopefully many people don't die at least according to state-run Media hospitalizations are low but then again how much can you really believe the state-run media I don't know probably not too much either way at some point in the future China will reopen and China is also receiving a decent amount of stimulus not like what we saw in 0809 but the government is trying to prop up the property sector and they want consumers to spend they're trying to get rid of dollars and they're buying gold they're buying a lot of gold so they're putting a lot of central banks are buying gold it's putting sort of a support under the price of gold right now but uh the big thing is China wants to make their economy better than the United States so if the United States goes through problems next year China would rather be sitting there kind of running the money wheel and if the money printers are running and the Chinese economy is booming and that leads to potentially inflationary pressures guess whose problem that is not China's Jerome Powells and by virtue of Jerome Powell's problem our problem because that just puts pressure on our stocks in theory downward pressure on our thought on our stocks so Bloomberg makes this argument that the demand for Commodities could actually Peak inflation or Spike inflation I should say and economic-wide purchasing pressure could also push up prices and we could see inflation continue for basically goods and services thanks to Chinese buying commodities for thanks to Chinese buying and then when you have increases in those prices that filters through the economy and then things get more expensive to produce in America because you have less Factory capacity in China for or foreign things because they're busy making their own things which have got more expensive so Factory prices go up Factory prices go up commodity prices go up what happens you end up seeing prices in America go up for things prices America go up for things at the same time as commodity prices go up and what do you have well you have Jerome Powell who says don't care that our economy is slowing down say hello to my little friend and it is known as stagflation baby we will do whatever we must to get inflation down even if that means a stagnating economy not great especially if a wage price spiral forms then you're really screwed right because uh wage price spiral the only way to solve that is deep recession bad worst case scenario hasn't come out yet but uh it's what everyone's paying attention to so what's a potential counter argument to this idea that just because China is going to reopen things uh we're going to see high inflation okay well what I did is I decided to grab some Charter Charters I like charters and uh I what I did is I graphed GDP for China so economic output right gross domestic product for China alongside the Consumer Price Index in China and what we're going to do is we're going to Overlay those two so we can see is there any correlation between potentially GDP going up really high and inflation going up really high at least in China right now this this is just Chinese inflation so maybe what we can do is overlay U.S inflation after that okay so here's what I found first things first we have the following chart right here uh this chart shows you the blue line which is inflation in China I'm sorry the blue line is GDP see it says right here gross domestic product China and the red line is inflation and you can see they kind of correlate but inflation seems to stay below a lid see inflation seems to Peak out here in 08 at 5.9 Peaks out at 5.5 here in 11 and it actually kind of then Peaks out around two and a half percent and it sits below two and a half percent or two percent for about the rest of the decade getting as low as under one percent in 2021 that's insane at the same time their GDP was reportedly 20 so even though over here it looks like these lines are kind of a lying GDP does not seem to have a lid and it can fluctuate substantially whereas inflation seems to sit between that zero to five percent range and if you remove those two peaks of 2008 and 2011 you're actually really sitting below 2 2.6 percent whether GDP was 13 12 1 12 20 didn't matter inflation it doesn't seem to be much of a terrible issue in China so in other words the Chinese government is clearly motivated to print money to keep their GDP up because that makes the Chinese Communist Party look good and apparently we don't really have as big of inflationary pressures in China for whatever reason uh and uh you know what maybe uh maybe that's a good thing who knows maybe inflation will come to China but at least based on this trend it doesn't appear like inflation's coming anytime soon to China uh even though they're they're stimulating their economy so let's now go ahead and add uscpi so we're going to get CPI for the United States we will add the data series we'll make sure it's a percent change from a year ago and let's jump on over to annual just to smooth this out a little bit and then let's just go back to I don't know 1964 over here when we start getting GDP data from China so 1964 just to align this there we go so as you can see here GDP is the Blue Line the red line is inflation in America once again you have a few Peaks on the left I'll hide myself for a second you have a few peaks in inflation on the left in the United States and there's really no clear correlation between the United States inflation the red line and China so let's just go to like 1990.
let's get rid of all that like noise on the left there so let's go to 1990. what do we have here GDP skyrockets in China what happens to U.S inflation like nothing okay GDP comes down what happens over here nothing okay GDP skyrockets in China what happens to inflation in America pretty much nothing it it almost seems like there's there's virtually no correlation between these two numbers here right uh now that's eyeballing I mean we could do some regression analysis and stuff but I I don't know that that's necessary I mean maybe you could say here you had a modest increase in inflation but but look you were you were at 3.3 percent here uh GDP went from 16.9 to 29 so you had a you know almost a 50 bump more than a 50 bump you're almost a doubling in GDP in China and inflation went up like 50 basis points in the United States like there's no correlation here I don't see it so fine then let's remove the CPI for the United States and let's now suggest that maybe oil prices will screw inflation right so let's get China's CPI back in here add that data Series right back in there's our red line again let's smooth it out to get the annual number and uh since the data doesn't go back as far let's go back to when the data starts which is about 1994.
there we go data aligns now what are we going to do well now let's add oil prices because Bloomberg said oh no oil prices might just Spark all right fine so let's take Brent in dollars so we can understand it a little bit here and uh let's just take the percent change from a year ago for Brent crude prices here let's go to annual again just to try to smooth this out a little bit because as you can see oil gyrates like crazy sure when you have this recession over here oil plummets okay when you have a recession from covid oil plummets I mean oil went to negative 32.
you know just like over here went to negative 36 okay it happens but aside from this bottom and this bottom here which were clearly recessions where you would expect oil to come down and then maybe over here the.com bubble right is there really a link between oil going up and then all of a sudden crashing while the other numbers are going up well that's the opposite you know here it seems like they're going up together and you get this massive crash which seems a little disproportionate to this GDP movement here okay maybe a little bit of a GDP movement and oil price move over here maybe maybe some correlation over here uh I can't really call that correlation and it's difficult to call anything else correlation so personally I find it very difficult to say oil uh the percent change of oil prices have anything to do with the percent change of inflation or GDP in China I I don't think so but let's try this let's set everything to a scale of a hundred okay so this is gonna now instead of being a percent where you know oil could change by 20 or GDP changing by 30 you have these and then maybe CPI is only five percent right it messes up the lines a little bit it makes the lines a little harder to compare because they they start spreading so far apart so let's set everything to a hundred a basis of 100 an index scale of 100 um we have to get rid of GDP to do this so we're gonna get rid of GDP we're only going to compare here we go CPI on the basis that CPI is 100 over here in 1993 and all right fine and oil prices are 100 and 1990 whatever close enough okay so now you have a smoothed out path for CPI and you could see oil so that's that's China's inflation right and you can see oil dancing below it on the left above it in the middle up and down on the right there's no correlation here folks okay now I'm going to tell you what that means but first you might think but wait a minute high oil prices are going to hurt us in America right maybe I mean what do you have here you have a Nike Swoosh recovery of oil rig count and in the Texas manufacturing fed survey this morning pretty the Dallas fed pretty much the only sector that seemed like they were continuing to see investment was right here we are seeing bigger more and bigger orders recently from oil companies spending money on projects they have held back on in the last year okay so oil companies are still buying equipment oil rate count is going up why then did oil prices spike in the last few days well because of this crazy storm that's not only affected LNG shipments in the ocean but also uh oil rigs in Texas because all of a sudden they're freezing temperatures in Texas shutting rigs down and grounding planes Just Happening throughout the country we just look at Southwest so you have some temporary weather effects that affect the insanity of oil prices in the short term but I think the trend here is that oil companies are investing more to drill more because oil prices are high they've paid down some good amounts of debt now it's time to crank before prices come way back down so I hate to say it but I strongly disagree with Bloomberg I do not believe that a China reopening situation is bad I don't believe I think U.S inflation plummets when housing inflation plummets and everything else comes down with it I think oil prices will Trend down as more Rigs and more production come online even as China reopens and I think as we've seen in the chart there's no correlation between a strong GDP in China and high CPI in America there's no correlation between like those two things there's also no correlation between oil prices going up the Wazoo or down the Wazoo and inflation in China it it just I I don't see it I mean maybe it could happen I just don't see it so I suppose if I have some bottom lines about China please open up so we can be done with you know this these coveted shutdowns which are causing supply chain grief and bring the Chinese buyers back to the market to start substantiating a global economic recovery and hopefully inflation in America plummets because housing inflation plummets next year in 2023 but then again everything that I'm saying right now could be wrong and this isn't me trying to hedge my bets I want to be very clear this is what I believe I believe what I just told you I believe here on December 27 2022.
and oil prices will Trend down over the next two years and that inflation will strongly Trend down faster than the Federal Reserve expects especially as housing inflation corrects itself and again more oil manufacturing is going to come online reiterating that downtrend for oil and the more China is open the smoother Supply chains are if we can now end the ward in Ukraine that'd be great but uh hey you know what let's let's not be so crazy Wishful of course I do wish for that because of the tremendous amount of lives that are being lost it's disgusting and it's terrible it needs to end but you know we'll save this for a Ukraine video in the meantime to me this is not scary and I could be wrong again I could be wrong for a few reasons that does not mean I'm trying to hedge myself it's just to be clear that if wage price inflation keeps going and we go into a wage price buyer we're screwed we're even more screwed than we are now if oil prices Skyrocket to over 100 bucks a barrel it's gonna suck if quantity the quantitative tightening hits us harder next year and bond yields continue to rise real estate's aft real estate just gets reamed if bond yields stay high however the stock market could actually recover as the global economy recovers and we start seeing earnings recover but again they're red flags that is inflation doesn't come down quickly and wages housing inflation and wages those are the two red flags the whole China thing please China get through this hopefully very few people die hopefully nobody dies but people will die so hopefully very few people die yeah we get back to uh a normal 2020 economy which honestly should be I expect will start turning into somewhat of a Frugal decade because I think people are going to be shell-shocked after the hell that we've just gone through and everybody's gonna be like oh my God I can't believe we survived but we're gonna survive it's just a matter of how painful it is between now and then it's like torture anyway go to bed see you later bye
Comments 0