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Trump Bans WeChat.... Time to Start Shorting The Market.

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@videosteemit
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Not more than an hour ago, Trump issued two executive orders banning US transactions with WeChat and TikTok within 45 days. It's political theatre, sure.... but with real consequences. Those who haven't heard the news can find it here:

https://www.cnbc.com/2020/08/07/trump-issues-executive-orders-to-ban-us-transactions-with-wechat-tiktok.html

This is going to sound alarmist, because frankly it is a speculative opinion... but this officially signals the first real shots of the new technology war against China. But what about TikTok, you might ask? Well simply put, TikTok just isn't the same in terms of application. TikTok is used for fun, WeChat is depended upon for communication. WeChat is a super-app, and it's prevalence in China far exceeds our understanding of the Internet landscape here in America.

To the Chinese, WeChat is their social media, their instant messaging tool, their e-mail, their news, their wallet, their online-to-offline portal, and in some cases their identity platform.

https://medium.muz.li/what-makes-wechat-so-successful-5d4795c96e1d

Great. But what does that got to do with America? Why can't we just go ban it?

Because in doing so, we are hanging up the phone on our business partners in China. We are cutting off our relationships with the Chinese. In a sense, we are burning an important bridge between our two countries in a single swoop.

Why does this matter? Who cares about China. The world currently runs on China. The majority of the world's manufacturing is conducted through China, who is also one of the world's largest importer of raw materials. Increasingly, China has been seen as a huge market to penetrate. In a world now struck by a pandemic, we are even more dependent upon functioning supply chains - the exact opposite of which this ban has the potential of preserving.

https://www.bloomberg.com/news/articles/2020-08-07/trump-signs-tiktok-ban-as-u-s-boosts-pressure-for-sale-of-app

Trump has officially fired the first real warning shot... and he may have potentially (and likely accidentally) killed whatever economic growth the world had left.

I would expect the markets to head down starting tomorrow, especially considering how interconnected we all are.
Without a doubt, China is already feeling it as it's largest tech giant faces a sell off.

The amplification of the rhetoric and action is only going to boomerang back on American markets because it significantly ramps up the Cold War which was already stirring. The largest companies here in America have nothing to really gain from this, and considering their lofty valuations as is, are likely to face some technical damage in the face of increasing US-China tensions.

Time will tell, but regardless it would probably be a good time to start taking profits and/or establishing short positions now that a recovery may be facing a new self-inflicted threat.

Posted Using LeoFinance