Not all that long ago I read:
March 31, 2023
I thought..."well maybe...I'll guess we will see" etc.
I didn't think it warranted posting anything about it on here when I read it or I would have tried to put something on here. I read a lot more than I post...it's just a fact...anyways lol.
We will get back to it and we will get into which central bank it is and why it's the one that matters the most right now.
I'm going to be bouncing back and forth between trying to make two points cause I take em to be interrelated and you should to. Anyway, hope i can make some sense out of these two basically..
Alright so. file that away about one central bank and its problems and why it matters rn.
And first let us consider:
Buffett says geopolitics a factor in Berkshire sale of TSMC stake
This is big. Bigger than you think and it tells you just how precariously we are teetering on the cliff right now. And it brings up a BUNCH more questions.
So, first of all you should know who Warren Buffet is:
Warren Edward Buffett (/ˈbʌfɪt/ BUF-it; born August 30, 1930)is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the best-known fundamental investors in the world as a result of his immense investment success possessing a net worth of $104 billion as of March 2023,making him the fifth-richest person in the world.
What Berkshire Hathaway is:
"Berkshire Hathaway Inc. (/ˈbɜːrkʃər/) is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from which it invests the float (the retained premiums) in a broad portfolio of subsidiaries, equity positions and other securities. The company has been overseen since 1965 by its chairman and CEO Warren Buffett and (since 1978) vice chairman Charlie Munger, who are known for their advocacy of value investing principles. Under their direction, the company's book value has grown at an average rate of 20%, compared to about 10% from the S&P 500 index with dividends included over the same period, while employing large amounts of capital and minimal debt.
The company's insurance brands include auto insurer GEICO and reinsurance firm General Re. Its non-insurance subsidiaries operate in diverse sectors such as confectionery, retail, railroads, home furnishings, machinery, jewelry, apparel, electrical power and natural gas distribution. Among its partially owned businesses are Pilot Flying J (80%), Kraft Heinz Company (26.7%), American Express (18.8%), Bank of America (11.9%), The Coca-Cola Company (9.32%) and Apple (5.57%).[6][7]
Berkshire is the seventh largest component of the S&P 500 index and the top-ranked company in the Forbes Global 2000, which takes into account both market value and fundamental data. The company is one of the largest American-owned private employers in the United States. Its class A shares have the highest per-share price of any public company in the world, reaching $500,000 in March 2022, because Buffett chooses not to split the stock.
And who TSMC is:
Taiwan Semiconductor Manufacturing Company Limited (TSMC; also called Taiwan Semiconductor)is a Taiwanese multinational semiconductor contract manufacturing and design company. It is the world's most valuable semiconductor company, the world's largest dedicated independent ("pure-play") semiconductor foundry,and one of Taiwan's largest companies,with its headquarters and main operations located in the Hsinchu Science Park in Hsinchu. It is majority owned by foreign investors.
Now consider:
"Warren Buffett called geopolitical tensions "a consideration" in Berkshire Hathaway Inc's (BRKa.N) decision to sell most of its stake in Taiwanese chipmaker TSMC (2330.TW) just a few months after buying it, Nikkei reported on Tuesday.
(Consideration my ass, he knows war is imminent.)
"Berkshire had bought more than $4.1 billion of Taiwan Semiconductor Manufacturing Co's shares between July and September 2022, but in February said it had sold 86% of its stake by year-end."
(So if he sold it in Feb? Why are we just hearing about it now? And notice it says it's stake was sold "by year-end" but nowhere in anything I've read tells you when, just "4th quarter of 22" is all you get. So why?)
"The size of the investment suggested that Buffett, rather than one of his Berkshire portfolio managers, had bought the shares for Berkshire, and the sale was unexpected given the billionaire's preference to invest for the long-term."
(Everything about it is odd...Guy knows wats comin...The sale might be "unexpected" to some but gettin out makes more sense than staying in BUT why invest in it in the first place? If your just going to get out a few months later? )
"Buffett was in Japan to meet with five Japanese trading houses in which Berkshire invests."
(File that statement away, keep it in the back of your mind)
Here is from the actual interview with Nikkei 4/11/23.
Warren Buffett says he intends to add to Japanese stock holdings
"Buffett said geopolitical tensions were "a consideration" in the divestment. He described TSMC as a well-managed company but added that Berkshire had better places to deploy its capital."
Berkshire fueled expectations for additional investment in Japan when it was revealed this month that it was planning to issue yen bonds for the first time since December 2022. The capital raise would help roll over earlier debt, one of the underwriters said."
"Buffett's Berkshire Hathaway disclosed in August 2020 that it acquired slightly more than 5% in each of Japan's top five trading houses -- Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp. and Marubeni. Berkshire increased its stakes in November."
(Berkshire Hathaway is taking it's $ out of TSMC and putting it in the 5 Japanese trading houses it already owns a stake in: "Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp. and Marubeni."
Yeah...so
let us consider Japan here for a second...
Weaponising US dollar and monetary policy risks setting the global economy on fire
"Basically, the four top central banks – the US Federal Reserve, European Central Bank (ECB), Bank of Japan (BOJ) and People’s Bank of China – together run monetary policy for the world as they operate the key reserve currencies.'
"The ECB has been expansionary, but the leading quantitative easing champion is the BOJ, whose balance sheet is now 125 per cent of Japanese GDP."
and:
Financial Analyst Charles Nenner Warns About the End of the US Dollar and Its Consequences
"China is one of the biggest holders of U.S. treasuries, with $867 billion in U.S. bonds held, comprising a little more than 10% of the total share of the U.S. Debt, just behind Japan."
Four central banks set monetary policy for the whole world. Kinda like a four legged stood this time :-).
"the US Federal Reserve, European Central Bank (ECB), Bank of Japan (BOJ) and People’s Bank of China."
Knock out one of these three legs'?
"the US Federal Reserve,
European Central Bank (ECB),
Bank of Japan (BOJ)"
the other two will go with it and guess who is the only leg left attached to the stool at that point?
Yeah...People’s Bank of China.
So if you were our adversaries?
Would you not try and knock out the weak leg of the three?
Remember the other article where it said
the $ took over reserve currency status
"seemingly overnight"?
Whats to make you think it wont be dethroned and another ascended in such a similar manner?
So back to:
from the beginning of this post.
- Bank of Japan being the quantitative easing champion with BOJ, whose balance sheet is now 125 per cent of Japanese GDP.
- "with $867 billion in U.S. bonds held, comprising a little more than 10% of the total share of the U.S. Debt, just behind Japan."
- And the BOJ has:
No comments:
Post a Comment