Paid Members can log in here.
To learn more about Epsilon Theory and be notified when we release new content sign up here. You’ll receive an email every week and your information will never be shared with anyone else.
This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.
Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
I am absolutely a ‘do you hear the people sing?’ kind of guy. To me, there is no excuse to run a repressive regime and run all over human rights.
That said, objectively, this protest has all the signs of a CIA operation that just happens to coincide with a trade and currency war between the two countries. (A ‘subversion expert’ from the US Consulate, according to Chinese state media, has been caught on camera with protest leaders.)
As a detective, the first question to ask is ‘who benefits?’
This event showcases precisely how the modern empire works. By soft power. By alliance with different factions, especially including those who believe in Enlightenment ideals. Thereby, the empire is able to wield considerable power by not spending much at all, because it doesn’t have much, compared to the costs of running the world.
The salaries of a few State Department/CIA employees vs. trillions in trade and FX markets. Brilliant.
P.S. If you find the setting of Les Miserables in mid-19th century France eerily apropos to the current event, it’s because it is. It never ceases to amaze me how people of passion find their voice in the most ingenious way. (And don’t laugh if and when the choice turns out to have come from a cultural advisor from the CIA.)
Of course there is truth in this. Of course there are constantly forces seeking to destabilize global adversaries. Clear eyes.
And that changes literally zero about the authenticity or truth of their cause or how we should regard it. Full hearts.
Besides, if the aim was to amplify this narrative, then whoever is stoking it is doing a terrible job.
Rusty, I’ve noticed the absence of narrative around this dramatic event. Is the media playing it down because it fears real “speaking truth to power” - and is that because the media is really on the side of the existing power / status quo geopolitical structure? If so, why? Why is it on the side of China?
Also, I’ve read, probably, every WSJ article on it and, while you are right about the headline you note or bent of this or that article, if you actually read all the articles, they’ve done a very good job of covering the event in-depth. As you note, for a financial paper at heart, I think they’ve done an outstanding job.
I hope I’m wrong, but I think China has too many cards to play and, in truth, while the 1997 handover agreement says some wonderful things - who’s going to enforce it, the UK?
The real China superpower moment / battle / generation defining event will be Taiwan. If I was Taiwan, I’d be in full-court-press mode buddying up to the US gov’t and marketing my story of a small democracy versus a Goliath dictatorship to the American public writ large. I don’t think Taiwan has any other strategy / hand to play that might save it from China.
Just my two cents.
Agreed that it’s authentic and passionate for 99% of the protestors. But there is no need to broadcast this story around the world more than it already is, since the pressure points are only in Hong Kong. If the Chinese army moves in and succeeds, then it will be time to promote the ‘standard’ global narrative.
Somewhere on Twitter I saw a brief video of student protesters waving American Flags and singing the national anthem. I was quite moved. I should’ve saved it but I assumed it would go viral since it is now not only kinda sorta news but also a way to poke Trump for inaction. The MSM is too incompetent to be corrupt.
Let’s also not forget what it was that really allowed the Chinese Communist Party to stay in power after the Tiananmen protests of 1989.
Trump has been quick to blame Chinese currency manipulation and the trade imbalance for loss of US jobs, etc. Do any of us really think the US elites were powerless to stop this manipulation in the 90s? They never wanted to, because we had the ‘Great Moderation’ and the ‘Goldilocks’ economy of low interest rates, low fiscal deficits (some surpluses under Clinton,) and low inflation. This was what it meant to have your issued money and debt supported by the biggest physically productive country in the world. Cheap Chinese goods became the new gold that underpinned the dollar’s value and the power that flowed from issuing it.
If the Communist regime survived by giving its people an artificially fast growth in opportunity and comfort, well that’s the cost of doing business isn’t it.
BTW, this is not some kind of accident, mistake, or what have you. If you think about it, it is exactly how the imperial system works. I will leave the elaboration of this argument as an exercise for the thinking reader (ie for those who would rather not turn a blind eye to a system that has benefited them so much.)
It pokes Trump, yes, so the MSM should love it / but it’s also pro-America in a fundamental - dare I say America “exceptionalism -” way, which the MSM hates.
Many of those contests are games of chicken that are very difficult to predict. So I don’t know.
It’s hard not to think that Taiwan looms large in those contests, I agree, but it’s also easy to lose sight of the more general historical examples of the failure of strong central control powers simply because the CCP has demonstrated some couple decades of proficiency in managing integration of technology into its oligarchic control of a modern state. Those pressures haven’t gone anywhere, and whether it’s HK, Taiwan or nothing at all, coercion grates against the human spirit every bit as much as it has in a million places before at a million times.
Me too. Amazing stuff.
(On your second point, call me an optimist, but I think they can still manage both! )
Love your viewpoint and spirit and share it, but also believe it can take a long, long - long - time to play out. That miserable borg of Soviet evil plodded on killing its people and their spirit for seventy-plus years and it never gave its people even a smidgeon of the growth and economic opportunity that China has produced (once it gave up communist economics, not politics).