Author: Xeolyenomics | The Game of Economics

A year ago, I wrote about why commodities is in a sweet spot to invest in and at that point in time. Oil is hovering at around the $50 mark, and fast forward to 2018, oil has reached a new high at $70, having appreciated 40%. Even though oil has performed exceptionally well, its performance has been eclipsed by Bitcoin with a 500% yearly gain. For investors who are looking for a high risk investment and has a more practical use as compared to cryptocurrency, oil may be your answer. The purpose of this article is however, is to take a...

The trade war initiated by President Trump escalated in the month of March as he instructed the US government to devise a plan and impose a tariff on $50 billion dollars worth of goods targeted at China. Unfair trade practices, stealing of US technology and intellectual properties are some of the reasons stated for the implementation of the tariff, in an attempt to narrow the $385 billion trade deficit with China.  In retaliation, the Chinese government implemented a 25% on 128 U.S. products, ranging from wine to soya beans. As of now, the proposed tariffs are just threats which will only...

The financial markets are thrown into turmoil once again, by the implementation of steel tariffs by the Trump administration as a barrier to the cheap China steel. However, instead of targeting just China, the steel tariffs are imposed on a global scale whether they are friends or enemies. The problem is that, US imports 70% of its steel from Canada and Mexico while China only constitutes 2% of its steel imports. After much protests from Canada and Mexico, the Trump administration excluded both countries and went on to impose the tariffs to include every other countries. What are the...

Europe, the continent that has rocked the global financial markets with debt crisis and a Brexit has been relatively quiet on the financial front in the past few months. However, there are 2 significant significant developments that warrant the attention of investors. Here are some of the newsworthy events which we should watch out for: Implications of EU tapering of QE The EU central bank initiated their Quantitative Easing (QE) program in 2009 and since than, the EU economy has recovered sufficiently to warrant the EU central bank to start tapering back on the QE program. The tapering involves...

The failure of repealing and reforming Obamacare has left the Trump administration without any legislative victory. Both the Trump administration and the Republican controlled government are eager to pass a tax reform before the end of the year. The key points of the tax reforms will have the following effects: One-time Low Repatriation Tax Rate for Corporate Profits Held Overseas Big cash rich MNC such as Google and Apple are holding most of their cash outside of USA due to the high tax expenses they will need to pay if the money is repatriated back. This one time “Tax Holiday”...

Shortly after the US Presidential elections, the USD shot up and hitting a multi-year high, with investors expecting that a newly inaugurated President Trump will be able to revitalize the US economy through tax cut, infrastructure building and trade sanctions which all will assist in the strengthening of the USD. 8 months later, the USD has reached a 2 year low and has fallen rapidly by 6% against SGD within this short period of time. There are 4 main reasons behind this sharp decline: Reason 1: Chaos in Trump Administration The rush of scandals that engulf the Trump administration...

The Trump bull rally that has been raging in the past few months have come to a halt in June. Let us take a look at some of the significant events for the month and its complication. Mess at UK Election The UK Prime Minister Theresa May called for an election in a bid to strengthen her coalition going into the Brexit talks with the European Union. Her lead in polls have been derailed by a series of campaign communication errors and terrorist attacks, leading to the Conservative party in losing their parliamentary majority. Results:  The stock market barely blinked...

China is Recovering! Emerging Market Equities Soars! You may have read similar headlines in the past few weeks and may be tempted to jump onto the Emerging Market bandwagon to reap the returns. Afterall, Emerging Market equities have soared 18% this year and the trend seems to be unstoppable. Popular news channel are optimistic about the China reforms and Asia is where all the growth is after all. For those market watcher, you will get a feeling of deja vu. The reason behind, this trend of Emerging Market out-performance seems to be the recurring pattern for the past few...

The idea of business cycle investing is simple. Allocate more of your resource based on the different stages of the economy cycle. Invest in stock and property during the recession and early recovery of an economic cycle. Invest in commodities and financial related stock during the growth to stagnancy stage of the economic cycle as inflation and interest rates start to accelerate. The last stage whereby the economy swings back into recession is the time to hold on to cash and bonds. This simplistic assumption held true for the past century when United States is the sole super economic...