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China Risks Make Commodities A Big Short

Aug. 02, 2021 12:51 PM ETXME, ACHHY, AAPL2 Comments
China Enthusiast profile picture
China Enthusiast


  • China has tightened monetary policy and taken an increasingly hostile attitude towards private enterprise over the past six months.
  • This will have far-reaching effects due to the fragility of the Chinese economy, which has become increasingly dependent on debt growth for economic growth.
  • Many of the equities most sensitive to these effects are trading near their highest valuations in recent history, making them highly attractive short positions (XME, ACH, AAPL, etc.).
Shanghai Skyline Sunset
ansonmiao/E+ via Getty Images

The fact that commodity prices are highly dependent on trends in Chinese monetary policy is nothing new for global investors. I’ve written extensively about this link in the past, but the below graph has a nice refresher of how closely

This article was written by

China Enthusiast profile picture
I am passionate about macroeconomics and financial markets. I focus on economic growth and inflation, and my view of those two variables drives my investment strategy.

Analyst’s Disclosure: I/we have a beneficial short position in the shares of AAPL, ACH, XME either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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