Thinking globally

[Brat]

I have been watching Russia and China and listening to analysts' opinions on geopolitics. The oil business (and frankly grain as well) is turning on its head, frankly, oil $120+/barrell by September would not surprise me at all. There is nothing the Fed can do to impact the resulting inflation. The loss of grain will result in famine causing riots and political instability in many developing countries.

China... for some reason Xi refuses to buy an effective vaccine, all the shutdowns in the world will not stop a virus more contagious than measles. The supply chain dependent on China is breaking, moving to SE Asia or returning to N. America. Add that to an imploding demographic (one child) and an aged population cheap manufacturing labor is disappearing. Not only is their housing market collapsing I read that small banks are running out of cash (no loans to businesses because of the lockup and few customers depositing wages). Xi has more problems than he can solve.

I moved much to cash a couple of months ago. My investment here on out will be US-centered.

[Montecfo]

Are you always this optimistic?



As far as strategy you want to Stay Fully Invested in my view. Does not mean you don't harvest gains and change composition somewhat.

Brent was at $117 Friday and hit $ 122 today so we are there on oil. With weakening dollar you can I think expect further rises in oil and eased lockdowns in China will drive demand.

Good Investing!

[W2R]

Quote:

Originally Posted by Brat I have been watching Russia and China and listening to analysts' opinions on geopolitics. The oil business (and frankly grain as well) is turning on its head, frankly, oil $120+/barrell by September would not surprise me at all. There is nothing the Fed can do to impact the resulting inflation. The loss of grain will result in famine causing riots and political instability in many developing countries. China... for some reason Xi refuses to buy an effective vaccine, all the shutdowns in the world will not stop a virus more contagious than measles. The supply chain dependent on China is breaking, moving to SE Asia or returning to N. America. Add that to an imploding demographic (one child) and an aged population cheap manufacturing labor is disappearing. Not only is their housing market collapsing I read that small banks are running out of cash (no loans to businesses because of the lockup and few customers depositing wages). Xi has more problems than he can solve. I moved much to cash a couple of months ago. My investment here on out will be US-centered.

I'm not changing anything from the AA that I decided upon years ago, partly because (correct or not) my thoughts are that many/all news sources these days are becoming more and more biased towards clickbait rather than factual news.

My investments have always been fairly US-centered, because, well, I have always been unusually patriotic and prefer to support US businesses. For diversification I do reluctantly have one international fund (VTWAX) but a fairly small amount of it (~8% of my portfolio).

[Fermion]

I think we will hit demand destruction pretty soon and oil is going to drop. This would be a lot simpler if the gov doesn't helicopter money in so people continue to do frivolous driving trips, flights, cruises.

[aja8888]

Quote:

Originally Posted by Fermion I think we will hit demand destruction pretty soon and oil is going to drop. This would be a lot simpler if the gov doesn't helicopter money in so people continue to do frivolous driving trips, flights, cruises.

My guess is after summer driving and vacation season is over gasoline prices will soften. At that time, refiners switch to winter blends. People are still spending like drunken sailors around here.

Natural gas prices may stay high for a long time as the market is not the same as the general consumer.

[Dtail]

Got out of international 3 years ago. No regrets.

[Montecfo]

People are biting the bullet and travelling, some for first time in 2 yrs.

Demand stays high through sunmer... minimum.

EU just announced embargo, that should support higher pricing.

[jollystomper]

Quote:

Originally Posted by Montecfo People are biting the bullet and travelling, some for first time in 2 yrs. Demand stays high through summer... minimum. EU just announced embargo, that should support higher pricing.

I would agree. My anecdotal observation traveling last week was there are a lot of people starting to hit the road and airports, and as long as covid deaths do not skyrocket (most folks are ignoring the infection data), the demand will continue through the summer.

[Koolau]

Quote:

Originally Posted by Fermion I think we will hit demand destruction pretty soon and oil is going to drop. This would be a lot simpler if the gov doesn't helicopter money in so people continue to do frivolous driving trips, flights, cruises.

Heh, heh, please define frivolous. We skipped our usual trip to the heartland back in 2020 due to Covid. When we came in 2021 we already noticed a definite decrease in our vigor and overall health. This year, we noticed it again. SO if I'm making a point, it would be that we only have so many trips left in us - even though it's true that we don't just HAVE to travel. But if we don't do it now, we may never do it. YMMV

[VanWinkle]

I got out of International when Tax Loss Harvesting in March 2020, and re-invested in US stocks. My intent was to go back to International at some point, but I have not pulled the trigger yet- may never pull that trigger.

[Fermion]

Quote:

Originally Posted by Koolau Heh, heh, please define frivolous. We skipped our usual trip to the heartland back in 2020 due to Covid. When we came in 2021 we already noticed a definite decrease in our vigor and overall health. This year, we noticed it again. SO if I'm making a point, it would be that we only have so many trips left in us - even though it's true that we don't just HAVE to travel. But if we don't do it now, we may never do it. YMMV

Not really talking about you, or older retired people taking a few trips. I am more thinking of the younger generations who value experiences more than assets and will continue to travel as long as free money flows in.

[wrigley]

Quote:

Originally Posted by aja8888 My guess is after summer driving and vacation season is over gasoline prices will soften. At that time, refiners switch to winter blends. People are still spending like drunken sailors around here. Natural gas prices may stay high for a long time as the market is not the same as the general consumer.

Hey.........I take offense to that comment. I was a "drunken sailor".

Mike

[aja8888]

Quote:

Originally Posted by wrigley Hey.........I take offense to that comment. I was a "drunken sailor". Mike

Woops! Sorry Mike, nothing personal!

My Dad was one too!

I was just common old Air Force fodder.

[Chuckanut]

Quote:

Originally Posted by Koolau Heh, heh, please define frivolous. We skipped our usual trip to the heartland back in 2020 due to Covid. When we came in 2021 we already noticed a definite decrease in our vigor and overall health. This year, we noticed it again. SO if I'm making a point, it would be that we only have so many trips left in us - even though it's true that we don't just HAVE to travel. But if we don't do it now, we may never do it. YMMV

+1

I've been plotting the infection rates. When it goes down "I'm out of here" and on a trip. When it is high, I hunker down.

Younger folks can put things off. I suspect once this burst of spending energy is dissipated people will pull back quite a bit. If the unemployment rate starts to tick up and the job market weakens, that will be another reason to stay close to home, cut spending and play it safe.

[Sunset]

I think Xi is accomplishing a few things by not buying a vaccine and using lockdowns.

Easier to identify and remove disgruntled vocal people who stir trouble.
Decrease the aging population via the virus, solves part of the aging issues.
Teaches the West/World that they Need China.
Less low wage work is not an problem for China, more of a benefit.

[Koolau]

Quote:

Originally Posted by Chuckanut +1 I've been plotting the infection rates. When it goes down "I'm out of here" and on a trip. When it is high, I hunker down. Younger folks can put things off. I suspect once this burst of spending energy is dissipated people will pull back quite a bit. If the unemployment rate starts to tick up and the job market weakens, that will be another reason to stay close to home, cut spending and play it safe.

In a time of inflation, lots of folks want to "get rid" of their rapidly inflating cash. They'd rather dump green backs on "stuff" than hang onto them and watch them shrink. YMMV