China devalues, Stops Agriculture imports

I would say that the Chinese people are behind their government 99%.

When they have no access to any outside information, what do you think? For example, mainland Chinese do not know or are shown how large the demonstration crowd is in Hong Kong. And practically none has heard of Tiananmen protest and massacre.

Back on traveling to China, now is not the time.
 
gerntz said:
When you say Chinese, you mean the government of China or the country's people?
Click to expand...

Well, I didn't say it. I just quoted the first line in the article. So, I guess everyone could interpret it differently.
 
It's not just the trade war hurting farmers. RIN waivers granted to refiners is taking a toll also.

A fairly recent article: https://www.radioiowa.com/2019/07/31/145604/

A northwest Iowa ethanol plant suspended production this week “until further notice.” Plymouth Energy in Merrill is one of at least 10 ethanol plants in the country to temporarily shut down. Three others have closed.

Shaw said this supply-demand imbalance is caused by waivers federal officials are granting big oil companies — so refiners don’t have to blend as much ethanol into gasoline.

Shaw said if the EPA were to adhere to the rules outlined by the Renewable Fuels Standard, there would be an “immediate impact” on corn prices and ethanol production would quickly rebound.
 
A "Who blinks first" scenario?
 
Floridatennisplayer said:
Luckily for me Fidelity and I cashed out about $800,000 that I had in one of my IRA’s so all that money has not been affected by the drop Friday or today so I’m gonna hold onto that cash position for the next few days and see what happens then I will jump right back in
Click to expand...

Florida, that's what I had planned, too--even did a post about "going to cash"-- but ... I didn't. Hoping it will not be a long-term thing, but that'll teach me to wait when I feel like things are overblown ... :(
 
DINKFIRE said:
When the exchange rate hits 10:1, it will be a good time to book a trip to China...
Click to expand...

I have been to China at least 20 times on business. In my retired life, there will NEVER be a good time to book a trip to China.:D
 
imoldernu said:
Thoughts on the farm economy? Not much said recently about the Chinese switch from the US to Brazil on soy beans among other commodities. The seasonal market is a moving proposition, and not just resolved by temporary storage.
Click to expand...

The US farms sell soybeans to Brazil. The Brazilian's sell soybeans to China. Problem solved.
 
I donated platelets today. Mostly watched CNBC, napped a little.

As I wrote in a post the other day, I have a lazy intention to move from 93% to 97% stocks.

Today's behavior made me think about moving 0.5% or 1.0% from bonds to stocks. I didn't because (a) I couldn't; I was hooked up to the machines until after the market close, and (b) from past experience I tend to want to buy too early.

Thus I will wait and do nothing until everyone starts getting nervous and worried. Then I will maybe reallocate from bonds to stocks. The last time I did so was 12/24/18.

Ended up donating a triple unit in 120 minutes.
 
cbo111 said:
I think China and her citizens are willing to withstand far more economic pain that our citizens are willing to endure. Especially with such a fuzzy understanding of what the tariff end-game is really about.
Click to expand...

Maybe, or perhaps not. The devaluation of the Chinese currency reduces the tariff effect on US consumers, and reduces the standard of living of its citizens. So "China is paying the Tariffs" becomes (ironically) more true.
 
Been traveling abroad and just checked the market. Won't do much. Have a few more days left before returning and won't likely pay much attention to the market.
 
Avalon said:
It's not just the trade war hurting farmers. RIN waivers granted to refiners is taking a toll also.

A fairly recent article: https://www.radioiowa.com/2019/07/31/145604/

A northwest Iowa ethanol plant suspended production this week “until further notice.” Plymouth Energy in Merrill is one of at least 10 ethanol plants in the country to temporarily shut down. Three others have closed.

Shaw said this supply-demand imbalance is caused by waivers federal officials are granting big oil companies — so refiners don’t have to blend as much ethanol into gasoline.

Shaw said if the EPA were to adhere to the rules outlined by the Renewable Fuels Standard, there would be an “immediate impact” on corn prices and ethanol production would quickly rebound.
Click to expand...
So this is a good thing for those of us who buy gas for our cars, right?
 
imoldernu said:
Early, right now, but Dow is down $600.

long term?

How to handle this?
Click to expand...

It's late now, and the Dow was down over 750 points (a little less than 3%) for the day.

How did I handle it? I took my Dad to his oncologist visit, then joined my wife on the beach. Later we went out to dinner to celebrate her birthday.

The Dow has dropped 3% or less many, many times during my life. It will do so again. Life will go on.

My financial situation is secure, and I have far more important things going on in my life. A minor market blip is completely inconsequential.
 
If the market drops really bad, I may have to rethink the delaying of SS till 70. :) Just kidding. It has to be worse.

More likely, it will not be as bad as 2008-2009 Great Recession, but the return is going to be crummy for a few years. I expected that.
 
NW-Bound said:
If the market drops really bad, I may have to rethink the delaying of SS till 70. :) Just kidding. It has to be worse.

More likely, it will not be as bad as 2008-2009 Great Recession, but the return is going to be crummy for a few years. I expected that.
Click to expand...


I don't think I'll ever see anything like a 2008 again.

In 2008 I was getting freaked out wondering if my money market fund would break the dollar (as one did). I was freaked out about my municipal bond funds (I used one of those ultra safe ones that had insurance on it before those insurance companies went bankrupt). I was worried about the major banks going under.

The stock market dropping 50%+ wasn't that scary to me compared to the other things going on which made me think the entire financial system was going to collapse.
 
Last edited:
I am sitting tight. Rents come in every month, regardless.

The small amount of agriculture products that are imported from the USA is not going to derail our economy. China still has to eat, or are they cutting back on food? Worse case, a few US farmers go broke. Most of our shoe making and textile companies went broke and it wasn't a blip on the radar.

If they devalue their currency, goods get even cheaper. Inflation decreases, and the fed lowers rates.
 
The big problem we have now is all the corporate debt.

Low interest rates encouraged companies to borrow money to do stock buy backs. Which is a major reason why US stock market has done well the last decade.

Once we get an earnings recession (may already be in one) some of that debt is going to get downgraded to junk. We could have a liquidity issue.

Also lots of money in the "shadow banking system", i.e. private equity has made a lot of dodgy loans.

Business Development Companies could be an issue. The amount of leverage they are allowed to take on was doubled the other year.

Lots of dodgy floating rate loans out there. Collateralized loan obligations.

A lot of bad stuff is going down eventually, just probably not with the big banks this time.

Another 50% crash in equities could happen again, but that doesn't bother me that much. I invest for dividend income and as long as earnings can support the dividends I'm a happy camper.
 
imoldernu said:
Early, right now, but Dow is down $600.

long term?

How to handle this?
Click to expand...

Looked up PM prices and figured (not even back-of-the-envelope) that my stock paper losses were roughly made up by PM (paper) gains. YMMV
 
Senator said:
The small amount of agriculture products that are imported from the USA is not going to derail our economy. China still has to eat, or are they cutting back on food? Worse case, a few US farmers go broke.
Click to expand...
Wait ... what? You do realize that China is finding other markets to buy the products right. This has been in many articles. Other countries are stepping up their planning and production for the growing seasons. This could be a long term loss.

Lot of articles are LARGE farms getting the marjority of the gov handouts / subsidies. The smaller farms that have been doing it for many generations are being crushed.

Their population gives them plent of clout. They've changed a lot of strategies over the past decade+
China's population is 4.25 times bigger than the USA and growing at a much faster rate. Think about that for 5, 10, 15, 20 years down the road.

x2aQEOF.jpg
 
Last edited:
You must log in or register to reply here.

Similar threads

street
Inflation Question on Portfolio
Replies
13
Views
907
marko
M
FiveDriver
Question about TurboTax and Fidelity Data Download
Replies
18
Views
1K
FiveDriver
FiveDriver
M
What is your Spreadsheet INFLATION assumption?
2 3
Replies
61
Views
3K
TickTock
T
K
asset location and allocation
Replies
13
Views
931
Montecfo
M
walkinwood
Larry Swedroe on the Problems of High US Equity Valuations
Replies
22
Views
2K
RobLJ
R

Latest posts

Back
Top Bottom