Brasil, España, Francia y China: Operación TACO. José Luis Cava

The market often sets traps, such as a new high with lower trading volume followed by a fall. To navigate this, understanding these traps and having a reliable broker like Freedom 24, which offers access to international stocks and ETFs, is crucial. The speaker, reporting from Madrid, highlights several "mischievous" truths. He discusses the Brazilian elections, where Lula was declared the winner amidst accusations of electoral fraud, specifically concerning a judge extending voting hours. He then turns to Spain, noting accusations of electoral census manipulation ahead of upcoming elections, though his expertise lies in economics. He identifies the economic group responsible for Spain's current situation: those aged 60 or older. This group constitutes 40% of the electoral census and benefits from 45% of social spending, largely due to retirement and healthcare needs. However, the speaker argues that politicians also subsidize their vacation trips and wine-tasting courses, which he deems excessive given this group's substantial wealth—over 53% of real estate, financial, and non-financial wealth. He views this as an unfair transfer from younger, tax-paying generations. Furthermore, he challenges the conventional economic wisdom that raising interest rates combats inflation, arguing that it primarily benefits those with financial savings, again favoring the 60+ age group. He points out that with public spending in countries like France reaching 57% of GDP by 2025—a level characteristic of a communist economy—raising interest rates mainly burdens the public sector and benefits holders of public debt, which again tends to be the older demographic. He suggests that such high levels of political control over the economy lead to fierce battles for money, resulting in situations seen in Italy, Brazil, Venezuela, and Spain. Moving to China, the speaker observes a rush to buy gold as its price fell below $4,000. He explains this by recalling the 2008 financial crisis when China's liquidity injection led to a real estate bubble burst, causing Chinese citizens to lose significant money. The Chinese, he states, know the Communist Party lies and that official economic figures are questionable, with hidden public debt. With avenues for moving money out of China via cryptocurrencies blocked, gold becomes their last refuge. He contrasts the 10-year US Treasury bond yield at 5.5% with China's 1.5%, refuting the Chinese economists' claim that this spread indicates lower risk in China. He argues that China's capital controls make direct comparison illogical. By comparing bond yields to nominal GDP growth and inflation, he concludes that China is experiencing deflation and heading towards a "lost decade" similar to Japan, making their goal of surpassing US GDP unlikely in the short term. The Chinese government's options are to bet on artificial intelligence or inject massive liquidity, which would likely cause gold prices to rise long-term, justifying the current buying spree. Finally, he discusses the stock markets and the upcoming US midterm elections. He expresses surprise at Donald Trump's subdued activity, expecting a more euphoric stance. He speculates that fund managers might have opened short positions due to this perceived capitulation, while retail investors have moved to money market funds. This "extreme fear," he believes, should favor a rise in stock markets leading up to and slightly beyond November 3rd, especially since election results might not be known until November 20th, with the possibility of electoral fraud not being ruled out.