ZERO EQUILIBRIUM

By Chinedu Okoye  De-Dollarization Campaign Gains Steam: China's De-Dollarization campaign gains steam as the Chinese Yuan in demand from a global expansion of overseas trade using Yuan for settlements. This makes the remninbi the BRICS anchor currency by virtue of being the most demanded BRICS currency and the PBOC's gold hedge. In the ZE paper on January 8th, 2024 titled: ‘ BRICS Watch: Risks and Tricks of the De-dollarization Campaign ’ it was posited that the Yuan would need to take lead for the De-Dollarization campaign to materialize as too many (BRICS) currencies cannot at the same time be raised in prominence, but can be affected by the rise in Yuan's prominence. This position seems to have materialized, with the increasing global demand for the Yuan. The Yuan Emergence: Then, BRICS nations had gradually commenced bilateral trade settlements in local currencies, powered by currency swaps. This was the begining of a renewed Yuan domina...

By Chinedu Okoye  Rachel Reeves faces a smaller fiscal hole than expected. The UK’s fiscal deterioration of about £14 billion since March was well below private forecasters’ estimates — meaning the deficit has widened, but less severely. This gives the Treasury marginally more fiscal space than markets had anticipated. In other words, the government is spending £14 billion more or earnings £14 billion less than it's planned expenditure - way less than forecasts. This means there is more fiscal pace (a lesser budget hole) than anticipated. Resolution Foundation's Proposal to the Chancellor: The Resolution Foundation urged the Chancellor to double her fiscal buffer to £20 billion and reduce household energy bills by moving energy-related levies from consumer bills to general taxation. In effect, this shifts the cost of green subsidies and energy programs from households to taxpayers, this ZE views as a move that could marginally lower headline inflation given energy’s...

By Chinedu Okoye    Summary: • Global Equities continue the rally as: Stocks across the U.S., Europe, and Asia started the month strong, extending a seven-month uptrend with the S&P 500 up ~40% since April’s slump • Commodities are mixed with Gold cooled from record highs ($4,300 → $4,000) but stays bullish long-term as it holds above the key phtscological level. Brent crude rose 10% MoM above $65/bbl after OPEC+ paused supply hikes. • Despite weak Chinese demand and German industrial strain, major indexes remain positive YoY with Q4 strength expected in the U.S., India, China, and Japan • Crypto pullsback with BTC, ETH, XRP, and BCH postibg steep weekly losses, while gold-backed tokens (PAXG, XAUT) held firm—ZE views dips as buying opportunities. • Though U.S 10-year yield rebounded to 4.21% as investors rotated to risk assets; ZE stays bullish on EM Sovereigns, Treasuries, and Gilts, expecting continued equity momentum barring a major downside shock. ...

  By Chinedu Okoye  Summary: • Donald Trump and Xi Jinping met last week and reached mild concessions, de-escalating the ongoing trade war. However, analysts note that this falls short of a comprehensive deal. • President Xi agreed to delay export controls on rare earth metals for a year and resume soybean purchases from the U.S., which had been halted for months amid a shift to Brazilian supply. • In return, Trump agreed to pause tariffs on Chinese goods for one year, effectively restoring partial access to the U.S. market for Chinese manufacturers. • The agreement is positive in tone but thin in substance, revealing Beijing’s enduring leverage over Washington.   Analyst Assertion: Trump’s framing of the agreement as a “great deal” is overstated. The disruptions in global trade caused by his erratic tariff policy have merely been postponed, not resolved, and issues largely unresolved. As Bloomberg analysts observed, instead of creating “...

Review By Chinedu Okoye  Monetary Reconstruction   The Principle of Sound Money The chapter kicks of with the “Classical Idea of Sound Money,” which was the principle that guided 19th century policies, and a product of Classical Political Economy. And also an essential part of the liberal doctrine developed in the 18th century social philosophy. The doctrine sees the market as the best "even possible only, system of economic organizing society". Private ownership of the means of production are controlled by the best hands fitted for the job, and secures "for all members of society the fullest possible satisfaction of their needs." And assigns the consumer the power to choose between suppliers. But this, he would point, requires an institution that secures members protection against "domestic gangsters and external influence". And this can be done only by armed resistance and repression. The main political problem, he says, (or human p...

By Chinedu Okoye  Last week broader-based equity indexes (Bloomberg S&P, Bloomberg World Large & Mid Cap Price Return Index, all saw declines midweek, suggesting a concentration of equity performance in the US,  As stated in ZE X Post: “  The economic uncertainty continues with the US and China deal being unsubstantiated, and industrial weakness in the words Number 2 Economy (China) and Consumer weakness in the US.  ” Bloomberg World, S&P, and European Indexes are all down intraday at the time if this post, whulst European Indexes had a mixed weak, with the DWX and CAC40 sliding, whilst the IBEX ALand FTSEMIB rose week-on-week. From the Paper, a point of nite was the decline in broad European equities as “  Bloomberg European 600 Price Return Index down -0.33% (frame 3); this index tracks 600 large, mid, and small-cap companies from 17 European countries (including the UK, France, Germany, Switzerland, etc.).  ” It represents about 9...