The Wuhan Virus Will Impact the Land Market – Week 10

Risks vs. REWARDS

Lower Oil Prices

My Xi Mask is a constant source of irritation to me.  Watching me putting it on and taking it off must be humorous for those around me. I am glad I can provide some entertainment to them, but it is not funny to me. One day last week I lost my hearing aids three different times as they flung off my ear because of taking my mask off. The only benefit to that frustration was that I finally figured out how to stop losing my hearing aids while wearing my Xi Mask…do not wear hearing aids. That proves again, I am trainable.

While working from home, the time I saved by not commuting I have invested in reading some books on my “to read” list. Among them was the highly recommended “The China Dream” by Chinese General Liu Mingfu.  Various sources highly recommended it because it describes the Chinese perspective that the 21st Century is a duel between the USA and China.

Allow me to save you the effort of reading a complete piece of garbage parading as a book. General Liu thinks the USA is toast and we should just accept the inevitable, China as THE WORLD LEADER (a/k/a/Hegemon which he repeatedly denies China wants to be). For confirmation of his opinion he cites a group of international economists that the Chinese surveyed on this topic. Do you find that as funny as do I?  Not a decisive group to ask anything. Here are the facts: The Wuhan Virus, China’s recent treatment of Hong Kong, and China’s habitual ignoring treaties all negate General Liu’s major premises. Talk about toast.

The only funnier thing was reading the words of General Liu and realizing that they reminded me of Barack Obama.  Lots of words, no substance, and both share the belief that they determine reality simply by saying something is real. Do you think General Liu also “leads from behind”? Me either. I recycled the book last weekend. It was not worth space on my shelf.

From my study of China, I am aware that their perspective is that this century is China’s time to rule the world. Their Destiny. The leaders of China refer to this time in history of the world as Post America. General Liu referred to Obama as an indication that the USA is finished. I agree that under Obama the USA was not just weak, we were feeble. Beyond that, I am willing to see how this duel works out. As we discussed earlier, demographics are an extremely important determinant of the future.

Not a conspiracy enthusiast, I am not a believer in coincidences. In my experience, unrelated things happen not randomly but by the design of some individual or group. My mind always looks for patterns. For that reason, I believe the combination of the release of the Wuhan Virus and the oil spat between Saudi Arabia and Russia were both intentional and planned. Look at the result from the Chinese perspective:

  1. The Wuhan Virus brought the USA and world economies to their knees.
  2. The oil market collapse was another economic torpedo, this one directed at the energy independence of the USA.
  3. The combination created enormous turmoil in the USA financial markets and destroyed a lot of wealth in the USA.
  4. That jeopardizes the reelection campaign of President Trump, most likely not seen by the Chinese as simply collateral damage but rather icing on the cake if not the main event.

We have witnessed some unbelievable occurrences during the Wuhan Virus. Among them was seeing a commodity have a negative value! In this case, it was oil. Remember last month when storage capacity for petroleum ran out and therefore the oil producing companies were actually willing to pay customers to take the oil? If you had told me in February that I would see that I would have believed you were under the influence of an illegal substance, if there are any.

The American consumer is enjoying gas prices that have risen from their absolute low of a month ago but are still LOW. Last week I bought gas for $1.499 per gallon, up from $1.299. Notice what is happening in the economy as a result – RV sales are zooooomming!  Do not want to fly and do not want to stay in a hotel, buy an RV and travel in your personal safe spot.

More importantly to our economy, petroleum is a feedstock for so many products we use in the USA in addition to gas. Low petroleum prices mean either reduced prices for some consumer goods or higher profit margins, or both. There are many ways the USA economy benefits greatly from low petroleum prices. All of them financially benefit the American consumer.

As capitalism in the USA roars ahead, the recovery will follow. As I said last week, the next several years will be the equivalent of a high-speed, joy ride in a two-seat sports car with the top down. Feel the wind on your face! Hear the roar of the engine? Fueled by low gas prices this will be awesome! And those gas prices will be down for a while.

Capitalism Rules and Socialism Drools”! It will take 20 more months for the USA economy to fully recover from the abrupt shutdown. There are just too many ripple effects of what we did to save 2 Million American lives. The USA economy will come back. Strong. But as long as they remain socialist/communist, China and countries like Venezuela really are toast.

Unfortunately for General Liu, so long as we Americans are trainable about selecting leaders who actually have done something in the real world, history will show that the “duel” between the Chinese government and the USA in the 21st century, … was never even close.  Meanwhile –

“Cast all of your anxiety on Him, because He cares for you”

(1 Peter 5:7   New Revised Standard Version, Oxford University Press)

Next week, more “REWARDS” coming from the Wuhan Virus if we remain a capitalistic economy. Capitalism builds wealth, socialism consumes it.

I serve an awesome God.  Stay healthy,