I found a great Article on why Emerging market and commodities is rising again.
For our investment strategy, let’s hope this is the beginning of a longer cycle than 2012-14, which is historically short.
Shvets: For example, global reflation in 2016, it’s all due to China pretty much. China delivered for everyone improvements in leading indicators and manufacturing output. Why can China do that and the US cannot? The reason is, go back to my original point.
In China, there is no difference between fiscal and monetary policy. There is no independence of the central bank. There is no difference between monetary policy and banking policy. In China, the People’s Bank of China just injects liquidity and directs the banks where that liquidity should go. As we discussed a second ago, in most instances there is no difference between the public and private sector, so basically corporates do in many ways what they’re supposed to do. The transmission mechanism is there, and every time China invests, effectively it’s brand new money coming into the system.
Damn communist are printing money mainly for selfish interests, but how sustainable is it???