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This month report is entitled "When we are no longer able to change a Situation, we must change ourselves", possibly referring to the massive debt load of western economies and the change of attitude required in those economies.
There is one attachment with this monthly market commentary (MMC):
- "China's Leadership Transition - Social Stability May Require a Stronger Renminbi" by Kieran Osborne, Director of Research of Merk Investments.
He concludes as follows:
Any marginal change in the governance of China is likely to have far reaching implications. Most notably, we expect an increased focus on developing the Chinese middle class and domestic economy over time, with less reliance on the export sector. In turn, political and economic realities are likely to force Chinese policy makers to allow the RMB to appreciate, to help manage domestic inflationary pressures, and thus maintain social stability. We consider that China has the ability to allow its currency to appreciate and put in place steps towards a free-floating framework, due to increased pricing power resulting from manufacturing of a wider range of value-added goods. Indeed, we have seen steps put in place to ready the country for appreciation of the currency, including conducting scenario analyses on local businesses, while concurrently increasing the internationalization of the currency. China is likely to become a global financial hub and a more attractive place for global business, as a bi-product of such initiatives. Such dynamics are likely to lead to ongoing strengthening in the Chinese currency over the foreseeable future.If I can find a summary, I'll post highlights of the Gloom Boom Doom market commentary, although in recent months it has been hard to find.