Taiwan War and Economics

Back in the day I had posted that I felt Putin’s buildup on the border was real. I think its fair to say that it has had noticeable economic and investment effects - but hardly caused a calamity or crash.

Taiwan.

Lately I feel China’s rhetoric is elevated. the (paraphrasing) “Those who play with fire will perish from it”…is relevant language in their military history.

Furthermore - like many of these “emerging markets” that the Americans and West cozy up to in the name of cheap labor and the deity known as earnings-per-share…are not the sunshine and roses some make them out to be. They’ve not had a Great Depression. They’ve not had a national labor movement. There’s still plenty for China to experience on the way up the elevator.

Demography - “one child” - they are now scrambling to get more births. Due to that they’re going to lose lots of workers – and gain a boatload of retired older folks. Growth while present - is going to be sluggish - not to mention their daily ‘let’s close a city due to Covid’ tradition that doesn’t seem to be so effective.

Point being - if there starts to become unrest amongst the people, and even though XI isn’t elected (remember how free trade was gonna spark democracy? lol)… his life does become hard if things get worse. He does care about optics on the global stage. IF a country is facing headwinds - sometimes the sole way they feel they can deal with it - is to lash out. Distract its people. Show the world “we’re for real”. Consolidate its backyard in the process.

My hope is - that its bloodless. I hope China merely takes Taiwan via corporate chiefs, the Investor Class, and the Academics. The Nobles are usually the easiest to buy off - history shows that time and again.

But if it is military - my goodness I just feel it will be a major, major crash.

I know the many wise investors here are long term buy and hold - - but I’m curious has anyone had thoughts about this? And if you feel this prospect of conflict is getting real - would you take some chips off the table?

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That concern was why I drew attention to this a while back.

That said, when I was a youth, I would vigorously try to time the market. I would sell virtually my entire portfolio trying to avoid a down-draft and then attempt to buy the same stuff at what I perceived was the bottom. Sometimes it worked and sometimes I mis-timed it. Overall, I did well sometimes and not at others, but never really took a loss. I have since realized that the tax penalty of selling at a profit would have to be subtracted from the gross in order to see how I really netted.

The bottom line (no pun intended) is that the market eventually comes back and if you don’t have need for the capital which is invested in stocks in the meantime. While it is obviously more fun to be “in the game”, if you hold a portfolio of solid players, sooner or later they will be hit, but they should do fine over the long run.

Will the stock market have a hissy fit if China invades Taiwan? Yup - and if the Western powers sanction China (which I suspect they will) it will pretty much force a global recession (maybe even a depression). That said, you can buy love and, at some point, business activity will adjust to the new normal and life will go on. It might just take some time.

Jeff
(Who has less than a 1% position tied up in currently worthless (in the US at least) Lukoil shares)

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…but I’m curious has anyone had thoughts about this? And if you feel this prospect of conflict is getting real - would you take some chips off the table?

Not that I am tempted to try to do that but the question then becomes if there is a way to actually do that.

Doing something like cashing out all your investments and putting it into something like US government bonds has its own risks.

My hope is - that its bloodless. I hope China merely takes Taiwan via corporate chiefs, the Investor Class, and the Academics. The Nobles are usually the easiest to buy off - history shows that time and again.

The big problem is the recent Hong Kong experience. China took over, bloodlessly, made all sorts of promises, and then … begins to eliminate freedoms one by one. Why should anyone in Taiwan, including the “nobles”, expect anything different?

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The big problem is the recent Hong Kong experience. China took over, bloodlessly, made all sorts of promises, and then … begins to eliminate freedoms one by one. Why should anyone in Taiwan, including the “nobles”, expect anything different?


Because, via fortune, 401K, degree(things they hold dear) , and a bit of selling out - they feel they’ll be immune to it. In some countries, citizens with these exact characteristics want to tell others how to live be it what not to eat drink, drive, etc. Nothing new. Agreed China will do that in Taiwan. But still feel that the nobles will stand aside. The European empires did that anywhere from America to India to the Middle East.

Wild card: The Western war machine - if they need a shot in the arm or a distraction…

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The real problem for China with taking Taiwan is jamming the GPS systems and hacking their software and hardware.

Meaning the Taiwanese can defend themselves well. Meanwhile the western primarily the US will jam all the Chinese weapon systems. We do not necessarily need to fire on Chinese positions. The Taiwanese would be doing that. The Chinese might not be even able to fire back.

Depends on how much we can control the jamming process on all ends.

The other problem is water. Possibly no further GDP growth and far too much debt in relative terms is a great depressions. Nothing is affordable to China from here.

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