Nothing More Than a Formal Mudslinging Contest
Nothing more than a formal mudslinging contest... The U.S. and China are in a 'stalemate'... The 'trade war' is on its way back... Bitcoin climbs back to $40,000... Don't miss Eric Wade's Crypto Cash Summit...
At least they were at a nice hotel...
The only pleasant detail we've read so far about the talks today between high-ranking U.S. and Chinese officials is that they were held at a tony resort in the Chinese port city of Tianjin.
And that's all the good news there is to report.
Because everything we've heard makes these high-level meetings between the world's two largest economies sound like they ended up being nothing more than a formal mudslinging contest, particularly from China's side of the table...
As CBS News reported...
China's Ministry of Foreign Affairs blasted Washington with a salvo of six statements that accused the U.S. government of trying to "contain and suppress" China, attacked the U.S. as the "inventor of coercive diplomacy," and alleged that the root of the deadlock between the world's two biggest economies was because some Americans see China as "an imagined enemy."
And that wasn't all. According to the Hindustan Times, an Indian-English newspaper...
Besides launching a well-publicised scathing attack on the US, accusing it of "bullying" other countries with "might is right" coercive diplomacy by imposing sanctions, [Chinese Vice Foreign Minister Xie Feng] also handed down a "List of US Wrongdoings that Must Stop" and a "List of Key Individual Cases that China Has Concerns."
For its part, the U.S. – represented by U.S. Deputy Secretary of State Wendy Sherman – made clear what it doesn't like about China's wrongdoings too.
According to a State Department spokesperson, Sherman raised concerns about human rights – namely, in Hong Kong and Tibet – freedom of the press, cybersecurity, and China's unwillingness to allow a full investigation inside the country into the origins of COVID-19.
Before the talks even ended, Chinese Vice Foreign Minister Xie Feng told Sherman that they were in a "stalemate." At least the higher-ups from the U.S. and China know where everyone stands if there was any doubt.
But you might be wondering: Why are U.S. and Chinese officials meeting at all?
Could this have all been done over e-mail? Yes.
Apparently, the goal was to work toward a meeting between U.S. President Joe Biden and Chinese President Xi Jinping. Why?
Well, remember the "trade war"? It's just about time to restart it. And this is a story you'll want to keep on your radar...
Nobody seems to be using the phrase "trade war" just yet, but we're willing to bet you'll start to see it back in the headlines over the next few months, and certainly by the end of the year...
As our NewsWire team reported on Friday, the purchasing agreements the Trump administration got from China in early 2020 (for at least a $200 billion increase in agriculture goods and other products over two years), right as reports of COVID-19 started popping up, are set to expire at the end of this year...
That's a big deal and, as I (Corey McLaughlin) will explain, maybe not for the reasons you might think.
First, trade volume between the U.S. and China has never been higher than right now...
This might be hard to believe given all the public animosity between the sides, but it's true. Things like "Made in China" electronics coming into the U.S. and American soybeans going to China are transacting at record levels.
More from our NewsWire team...
According to official Chinese data, trade with the U.S. has gone to record highs. And this isn't expected to stop, at least in the near term. China is currently buying U.S. farm goods in bulk for this year and 2022. Chinese companies are also likely purchasing more U.S. products to fulfill its end of the 2020 trade deal.
Meanwhile on the other end, U.S. consumer demand is still going strong, and China provides a lot of wares that are essential. Jonathan Gold, vice president of supply chains and customs policy at the National Retail Federation ("NRF"), says the U.S. import levels have experienced robust growth. The Los Angeles port, the biggest in the U.S., has about $259 billion in cargo arriving and departing. Almost half of this merchandise connects to China and Hong Kong.
In short, as much as democracy and liberty might not fit with communist rule, from an economic perspective, China needs the U.S. to stay wealthy – and vice versa – and keep life going as most people know it. Whether that is the best thing is another matter.
At the same time, though, while trade between the countries is at record levels, China's purchases of U.S. goods are behind the pace they promised in the "phase one" trade deal signed in 2020. There was never a "phase two"…
And with obvious strained relations between the "diplomats," it's unlikely the agreement will continue...
As our NewsWire team said, next year could mark a dynamic shift when it comes to China and U.S. commerce...
If the current surging demand from U.S. consumers continues, American retailers could need Chinese imports to handle it. China's reserved pace of purchasing U.S. goods could mean the feeling isn't mutual.
This potential one-sided reliance on China could be why President Joe Biden has pursued delegations with Chinese officials...
As for what this means for you and your portfolio, there's not much to do other than to stay informed and keep this risk – and the power struggle between the U.S. and China – from our NewsWire team.
As we see it, the timeline for more developments fits with our idea of the "winter storm" approaching... and, as we wrote last Monday, part of that has already arrived early with renewed COVID fears brought on by the Delta variant.
Switching gears, in the last 24 hours, bitcoin and many other cryptos have rallied significantly...
And this crypto news has nothing to do with Elon Musk, but everything to do with another company founded by a multibillionaire – Amazon (AMZN). Rumors are circling that the e-commerce giant is working on plans to accept cryptocurrency payments.
That would be a significant boon for the crypto markets. As we share in our featured video below – in the first half of 2021, nearly $3 billion of transactions were made in cryptocurrency, according to the firm CoinPayments.
Bitcoin is up to nearly $40,000, 15% higher than this time yesterday... Ethereum is up 10%... and many other cryptos have seen similar gains today.
We'll have more on this story, but for now, just take this as a sign that bitcoin and other cryptos are living up to their volatile reputation. Recently, they were plunging down, down, down. Now suddenly, they are on the way up. As DailyWealth Trader editors Ben Morris and Drew McConnell wrote to their subscribers today...
Cryptocurrencies are down a lot from their all-time highs earlier this year... But they jumped sharply higher over the weekend and into this morning. This could be a sign that the next big crypto rally is starting.
When Ben and Drew speak on cryptos, we listen... Because they've nailed the twists and turns of bitcoin's price movement in particular, warning us of a near-term top in April that could see bitcoin's price drop 50%.
That's exactly what happened. Now they are starting to see bullish technical signs for cryptos again. Put yourself in a position to benefit if cryptos rally over the next few months.
This couldn't be better timing, if you want to become 'rich'...
Last week, our colleague Eric Wade went live with our first-ever Crypto Cash Summit...
And while we've told you the particular recommendations that he's talking about are not simply "buy bitcoin or Ethereum," they do benefit from positive sentiment of the crypto space in general, and higher prices...
As we described it, this is a new way of thinking about becoming a "rich man" by generating real cash flow using cryptos... We're talking anywhere from 8% to 30%, depending on how much risk you are comfortable taking.
In short, this is exciting new research that nobody else in our industry is doing... but it goes right to the heart of what makes cryptocurrencies and blockchain technology so promising in the first place.
Click here to watch Eric's Crypto Cash Flow event right now to get more details.
Any Alliance members interested in getting started with cryptos, now is as good of a time as any...
Take some time to go through Eric's educational guides and videos to learn how to invest, store, and move your crypto assets... and take advantage of his recommendations.
Crypto Payments Near $3 Billion Mark
The argument that cryptocurrencies aren't being used as a form of payment – to buy and sell goods and services – appears to be a faulty one...
According to Jason Butcher, CEO of CoinPayments, one of the world's largest crypto payment processors, crypto transaction volumes came in near $3 billion in the first half of 2021, with bitcoin as the preferred payment of choice.
That's a 200% increase compared with the same time last year...
Our editor-at-large Daniela Cambone speaks with Butcher about the data from his company and his thoughts on the crypto world today...
Click here to watch this video right now. For more free video content, subscribe to our Stansberry Research YouTube channel... and don't forget to follow us on Facebook, Instagram, LinkedIn, and Twitter.
New 52-week highs (as of 7/23/21): ABB (ABB), AbbVie (ABBV), American Homes 4 Rent (AMH), American Tower (AMT), AutoZone (AZO), Bristol-Myers Squibb (BMY), Brown & Brown (BRO), Costco Wholesale (COST), Cintas (CTAS), Commvault Systems (CVLT), Dollar General (DG), DocuSign (DOCU), Expeditors International of Washington (EXPD), Facebook (FB), Alphabet (GOOGL), ICICI Bank (IBN), Intuit (INTU), Invitation Homes (INVH), Johnson & Johnson (JNJ), Coca-Cola (KO), Lonza (LZAGY), McDonald's (MCD), Microsoft (MSFT), Cloudflare (NET), Novo Nordisk (NVO), Palo Alto Networks (PANW), ResMed (RMD), ProShares Ultra Technology Fund (ROM), ProShares Ultra Health Care Fund (RXL), Starbucks (SBUX), Sea Limited (SE), ProShares Ultra S&P 500 Fund (SSO), TFI International (TFII), Thermo Fisher Scientific (TMO), Trane Technologies (TT), Visa (V), Vanguard S&P 500 Fund (VOO), Waste Management (WM), and Zebra Technologies (ZBRA).
In today's mailbag, feedback on Dan's latest Friday Digest... As always, send your notes to feedback@stansberryresearch.com.
"Dan, Hedgehog or fox may be your best letter ever. I've been reading your stuff for years and keeping things simple is the best advice. The other two are keep risk low and make sure you investigate the management team before you buy the stock. So many stock pickers fail to do this in order to expedite the process. This is a big mistake! Thanks again for your pearls of wisdom." – Paid-up subscriber Kenny G.
"Hi Dan. Just finished Friday's Digest, 'Are You a Hedgehog or a Fox?' Really enjoyed it. I've heard you recommend books many, many times. So this likely will be a question you've answered before. In the Digest, you wrote: 'It's absolutely impossible to succeed as an investor without learning to recognize, understand, and control risk.' Can you recommend books that address recognizing, understanding, and/or controlling risk? Thanks as always." – Paid-up subscriber Levi N.
Dan Ferris comment: Thanks, Levi. Glad you enjoyed the Digest... As for your question, the best books on risk that I know of are:
- Nassim Taleb's Incerto (Fooled by Randomness, The Black Swan, Antifragile, Skin in the Game)
- Against the Gods by Peter Bernstein
- The Most Important Thing (chapters 5, 6, 7) by Howard Marks
- The Hour Between Dog and Wolf by John Coates (it's interesting, but I haven't read the whole thing)
All the best,
Corey McLaughlin
Baltimore, Maryland
July 26, 2021