What phony dog poo? We welcome a new President.

Dear Reader,

Has anyone ever watched Top Secret with Val Kilmer?  If you haven't I highly recommend it as it has the best underwater bar fight scene you will ever see. 

There is a scene in it where Omar Sharif has to pretend to buy joke items from a spy and there is an odd moment where he picks something up from the ground and says

"Hey you dropped you phony dog poo"

To which the spy replies...

"What phony dog poo?"

link to Omar Sharif.

https://www.youtube.com/watch?v=vPB2g1y2VFk

Link to the underwater barfight

https://www.youtube.com/watch?v=MfRi-a8hPh0

I stopped watching US politics after it became clear we were in for a full monty Hunger Games parade today with smiling celebrity endorsements and a Washington devoid of everyday people.
Apparently after 47 years in politics Joe Biden is now bringing change and unity.. well unity for some.

I have decided my new macro trade for 2021 is going to be nicknamed 'The Biden Trade' in honour of his election. I started cycling into some China etfs in the last month as the results became solidified.
As an example since I bought into Fidelity China special situations on the 4th of January 2021 it has risen 9.57%

I truly believe on a macro level that China and India will be the main beneficiaries of a new broom presidency that to name a few manifesto points

1/ wants a minimum 15$ per hour minimum wage

2/ will rejoin the Paris accord

3/ Will have an immigration amnesty

4/ will likely cancel sanctions on China

It is a difficult time picking the moment for major portfolio shifts like this as the US equity markets are clearly in the stratoshere fuelled by quantitative easing and a spendathon that shows no sign of easing. For those reasons I have started the cycle but remain heavily overweight in US centric funds and will continue the rotation over the coming months.  

To put that in perspective I have run my portfolios around 35-40% weighted in US centric. A normal overweight would be around 20%.

The elephant in the room is the US Dollar. Every man and his blind dog is calling it weaker. If my call is correct I think there will be a natural support for it as goods from overseas will be paid for in USD.  For sure there is a general weakness coming in all fiats due to this insane round of spend without tax receipts due to lockdown for the bat.

I have been building a long USD short GBP position in my 'fun' account. It is offside but I always believe it is better to have skin in the game a la Taleb than not.

I won't deal with the economic folly of the 'print and be damned' economic policy  in this quick note today but lets just say MMT isnt going to have a happy ending in my jaded old dog view.

My call is still that commodities will rise due to inflation pressures and for that reason I am still adding to my metals.  

Crypto has been on fire and is clearly upsetting the central bankers. The Bank of England,  Christine Lagarde (Madge from benidorm) and Janet Yellen have all voiced their worries about it recently.  It is almost as though they are scared of a decentralised 'currency' that they cannot control.  I did say last year that they would try and come for it.. it remains to be seen quite what they can do.  I am long and have had some decent returns in it but it is only as valuable as it is perceived to be.

As I end this note we come back to why I mentioned the line 'What phony dog poo?'  Donald Trump was supposed to be according to the Democrats a Hitlerian dictator.  I don't remember him filling the Capitol with troops on his inauguration day. Also for someone who apparently used unbridled power to control the masses I don't understand how big tech could just switch him off with a flick of the switch. If you ask me he was more of a phoney dictator than a real one.

Biden is not a phony president as he clearly won the most votes in US history (C'mon Man) but part of me wonders quite what the American people have really picked up. The next 4 years will be historical and hysterical in equal parts.

On that happy note I wish you all a great after party celebration in the days and months to come. Lets hope the headaches are worth it.

Don 'Straighten the Rug' King