based on the positions you have we can go through all of them, right some is to deepen more or less but I wanted to talk mainly about China and in this one we could talk a little more but well it's just from the positions and there's the sold in Indiana Rupiah the Chinese renminbi kept crypto is but wanted to start more with China because if you already have a relationship already do with China nor do short in chinese renminbi and how are you seeing maybe one of the subjects that at least when we bring guests
here is what divides a little more opinions about the what is happening to China or not right if it is in a clear deceleration process it is economic stagnation but many people still see some opportunity anyway, how are you seeing the chinese economy I think China's position right it has two pillars right she has the dollar and she has the renmimbi on one side right so we are not short o renmimbe just because of the issues inherent to China, right? we are short because we think this conflict he will be one of the channels where
it will be reflected it's a currency devaluation right so what's a lot what what's way behind this is Trump becoming president he has already spoken n times, I don't know that he will raise the tariff and and will raise tariff very strong against China right that is the great let's say political gel conflict that we have in the world today is this this this cold war two zero points there between the United States and China so it's our conviction in this position it has a lot to do with this so here we are has the
history of the tariff which is very relevant to us and we've seen this movie before, right in two thousand and there among those of the first Trump administration raised the tariff the currency devalues, right? don't have it in the price it's a potion which, due to the interest differential we are paid to wait so yes strange it has several characteristics that attract us to it, right? but speaking specifically of China what it looks like is you have an extremely centralized economy right an economy an extremely centralized government, right? where all decisions are taken by the
xinpim and are guided by by 1 logic political gel ne not by 1 logic ah I need to make economy grow etc are objective magnetic order ne the goals are all political and gel political so in that sense has an economy that is trapped in a deflationary spiral and that it can't come out right what is happening in China today is what happened in Japan after the bubble bursts started in the nineties is the doubt we have no is if China is already going to bake, right? it already happened the question is whether like Japan
she will take twenty twenty-five years to realize the problem and go get his exit or this cycle will be faster right so in september of last year had the story old government banco central etc no we will now will do everything necessary to stimulate the economy and get it out of this from this spiral and there the chinese stock market went up etc. we even benefited from it at the time is and the coin at that moment even gave a gave a valued a valued that we took advantage of to to increase the position but
we don't to people don't you think they've done everything they can do and no they certainly couldn't make that savings from one of a deflationary spiral then perhaps the most absurd price we have in the world today like this absurd visa saw that we were used to it for the last five years it's today China's thirty-year interest rate is below Japan's thirty-year interest rate something that it had never happened before in history so if you have a country that has a ten year interest rate for example that in the United States there are four and
sixty as you said ten-year interest rate from China is one and a half like you what sign is this giving what a face that country is stuck in a deflationary spiral that he cannot come out of yesterday the inflation data came out in China the Chinese cipiai ne their IPCA equivalent it's running below one percent a year nor o cipiai the pipes which is their igpm right what is the producer's price deflation has been running for almost two years now non-stop deflation every almost two years right and then the country is trapped in a deflationary
spiral that he can't get out and on the contrary all the policies he does so what are chi's policies is to stimulate supply growth is we don't need to invest more in semiconductors more investment in electric car more investment in I don't know what there and export that excess supply to the rest of the world is then internally you only create this does not stimulate demand, it only stimulates supply that classically does what the price fall and you export your car to the rest of the world and then what the rest of the world is
talking about is doing and Trump is just the most from it is expensive no i don't want to be invaded by by chinese car by is chinese cell phone by any other Chinese product right then will raise tax Brazil himself raised tax on Chinese car and will probably rise more born and yet a bioide was the fifth or sixth largest car seller in the world. Brazil last year coming from nowhere two three years ago Europe is uploading this and Trump has already spoken man it's more tariff will come right then at the end of the
day we think this reflects on a weaker currency but it's a game that has two sides has the tariff side and the US side and obvious da american economy we can talk more about it later but the side of this Chinese economy is trapped in a in a deflationary spiral because all or a economic policy it is done at the service of objectives merely from the power of the communist party and that of the of the real political objectives of the x like the currency of China controlled by the government she didn't come freely there
is another macroeconomic inconsistency in the value of the coin if you take the one year interest rate born that today is a born coming I don't know two or anything like that just that in fact should have already made the currency devalue anywhere in the world is what would have happened but in China it doesn't happen because the government has control over the currency so it adds one more effect to this né and and let's drag it in GDP Chinese that Trump can cause which is why only would accentuate this currency movement understood so this
is 1 let's say it's 1 trade that takes 2 macroeconomic theses in a single trade although nobody expects anything violent I mean not 1 business that will it won't be yang style right which was one hundred to one hundred and sixty that's not what will happen in China it will be a small move but small enough to make the investment thesis worth it even because we do it saw a structure of options then have a risk to give a very limited website and even since he pulled for Trump until the last letter of yours you
wrote in that intensively as Trump talks about the Panama Canal from Greenland of other minor themes he has been silent about China let's go we'll see how long this lasts it is yes then it has I also think it will be the big one theme of two thousand and twenty-five at least here to Brazil we will have an interesting point I don't know if this is out yet is if the shi Vine inauguration no Trump has spoken publicly more than once who invited and China has given absolutely no sign that it will I would say
the probability is very low even because he thinks about xi he goes to the inauguration after trump taca tariff the guy gets demoralized ahem no that for chinese is right so that's serious business so unless you fosse no inauguration it would be a positive sign that you are seeing some understanding for me this is important understood he can't go after Trump goes there and speaks ill of Chinese on the first day it's just remembering we are recording on a farm this episode will pray on tuesday so if Shin changes his mind by then so it
can change but I find it difficult it seems unlikely neither liked that cut right so how about watching the full episode click here and watch it in full or else you can click here and see another cut from that same episode
