Will a "Lupin" in the White House reinforce the commodities super-cycle?
Arsène Lupine is a French fiction character, emblematic for his impressive ability to wear disguises and change his identity in his performances, inspiration for the Netflix series that is number one worldwide.
But what does Lupin have in common with the new president-elect in the USA, Joe Biden?
Well, after the confirmation of the result in the American elections, investors were thrilled with the return of the discussion of new fiscal stimulus packages. In addition, the supposedly more diplomatic approach to relations with the Chinese (and the issues surrounding the trade war between the two largest powers in the world) was also a major reason.
However, perhaps Biden is just as good at disguises as Lupine in that regard. In an interview with Stock Pickers, Professor Roberto Dumas, a specialist in China, said that despite the more diplomatic image, Biden worries the Chinese more than the tweets of his predecessor.
Using the slogan "America is back", Joe Biden, according to Dumas, tends to rebuild alliances that had been established in the post-war period and that were broken by Donald Trump. The teacher explains:
“Incredibly, the biggest fear is of Biden, because Trump was a good guy, he made an angry tweet and the Chinese bought some soy and everything was fine. Now, Biden, at least what they are seeing, goes through the middle and, through institutions with a coalition of countries, hit China. And that’s what the Chinese are afraid of ”
Meanwhile, the Chinese are not standing still: in the middle of the 100th anniversary of the Chinese Communist Party, and with Xi Jinping in the preparations to seek his re-election in 2022, China is in a moment of flexing its muscles. In other words, invest heavily in infrastructure and increase the state's presence in the economy.
And to have more infrastructure, what is needed? Commodities. Yes, the largest commodity vacuum cleaner in the world, which is China, is turned on at full power.This is one of the factors that drives the so-called “commodities super-cycle”.
Then, all emerging countries that are able to produce, plant, harvest and manufacture in exponential quantities will enter an upward path in their due stock exchanges.
If Biden is really a Lupin - and his relationship with China will continue to drive the purchase of emerging commodities - only the next chapters will say. And between the parallels of French folklore with reality, or even superheroes that are an input for infrastructure, the best answer remains to respect the limits of your risk tolerance, and to remain diversified in the themes that make sense to you.