The Trump train wreck dominated the week, dear readers, rather than China, with sex being at the heart of the imbroglio. It’s mesmerizing, even from our watchtower here on the China coast. In fact, China only got a small look-in on the consciousness of the plugged-in this week thanks to the efforts of John Oliver (worth following up).
Where it goes from here, barring assassinations, is surely a Hillary victory, and the Dems will probably get the Senate as well. Ryan, with a smaller majority in the House, is going to have an exhausting four years dealing with the impact of what we presume will be Trump’s refusal to accept the result, with all the negative resonance that will have, and healing the divisions in the party between those who supported Trump and those who didn’t. The ugliness will not end on November 8.Then Hillary is going to be faced by a bunch of challenges, no doubt including situations in our part of the world. But rather her dealing with it than the alternative.
So what about China, you ask? Oh yes, China. Property. They are trying to close off the flow of cash into the already super-hot property markets of the major cities. The results will likely be more activity for the shadow banking system as the state banks cut back on lending for apartments, the spread of the bubble to a few other cities, including, it seems, Chengdu, and the continued flow of assets out of the Mainland. The stock market’s no good, the property market is being squeezed, only fools are going to invest in the real economy, so what else are you going to do with your cash? Keeping it in the bank doesn’t work, that’s for sure. Now that the RMB is an SDR basket currency, the PBOC is free to let the currency drift down in line, for once, with market sentiment. Seven to the USD is the target we’d say, and we’ll see it don’t know when, but it’s coming. Our advice for the weekend: Stay off YouTube and social media and read a book!
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