Macro Perspectives
Friday 24 July 2020
As we discussed yesterday, if you've been listening to Pompeo, it's increasingly clear that he's setting the table for a large-scale confrontation with China.
Today, he took the case to the world.
If we had any question on how aggressive Pompeo might be, he led the way yesterday with a comment about the head of the WHO, saying he was "bought by China." Remember, Tedros (WHO head) was on the ground in China, through the depths of the health crisis there, yet refused to call it a pandemic until March 11th -- over a month after it was known that there was human-to-human transmission and about 20 days after the virus had already reached over 20 countries worldwide.
Take a look at the language in Pompeo's message today:
"The only way to truly change communist China is to act, not on what they say, but on the way they behave” – followed by examples of China's IP theft, censorship, global propaganda campaigns, espionage, etc -- and he documented the threat to its own citizens.
"It's time."
"It's time for free nations to act."
“For too long we let the CCP set the terms of engagement. But no longer. Free nations must set the tone.”
I’d say the line in the sand has been drawn.
And to be sure, it will be crossed. And now the table has been set for action to follow.
As we discussed yesterday, this will likely come before the election.
With this, gold traded near $1,900 today. We've talked about gold here in my daily notes quite a bit, saying a new record high was coming, given the recipe for a global reset in prices (i.e. inflation). The last $100 has been fast. We're in sniffing distance of the all-time highs now, and it's not only inflation-driven flows, but also flight-to-safety flows now.