As a UK national I'm finding it impossible to buy EWW, XME & DBA as they do not have KIDs, even IB won't let me trade them. Can anyone suggest other reasonable approximates of these etfs?

Nice pop in both EWW and XME so far this week. It's nice to see some green for a change!

Interesting comments from the CEO of the China Beige Book (private data service re the Chinese economy) - thinks China could be forced into infrastructure stimulus similar to 2008. https://podcasts.apple.com/us/podcast/hidden-forces/id1205359334?i=1000471304596 Minutes 32-36 Does anyone think this is in the price for XME or AUD.USD?

I am a little bit surprised by the trade recommendation. With the model predicting CPI down, long AUDUSD recommendation looks extremely dangerous. I have more than 20 reasons to take the short side, could any one point out the reason to long AUDUSD with target 0.8?

Harry (and Julian, of course), thanks so much for your thoughtful, clear and concise responses. Raoul and Julian get most of the spotlight, and rightfully so, but I really appreciate you taking your time to get us more answers to more questions. It really helps complete the education for each video. Well done.

Thanks Julian! For anyone looking through the individual stocks on the list Julian included, make sure you factor in the company's debt load. All of those metrics in the table - P/B, P/E, P/S, etc. - are only valuations based on the equity market cap and doesn't include the debt load. And the debt is where companies get in trouble. I suggest looking at valuations based on Enterprise Value instead to factor it in.

Julian or Harry, do you have any thoughts on how YCC would effect Risk Parity? Wondering if Risk Parity strategies could still maintain a highly leveraged equity position in a YCC environment. I would imagine that the firms running these strategies will do everything they can to maintain clients so if the bonds are no longer working, what might they use to offset their equity positions?

Any thoughts on HCC and MSB to play the XME market - I hate buying the index right now because I don't want to pick up some bad companies with good ones. Trying to stay in companies with little debt and high operating margins?

Thanks Julian... I fully agree with your thesis. Question as always is how / time frame it plays out. Trying to find out more info about who is getting access to the dollar swap lines, specifically the sovereign wealth funds you mentioned..?

I found this a fascinating read, so thank you Julian. I took small positions in EWW and XME to see how this might play out. Also wanted to compliment everyone in that the Q&A below was really interesting to read - some great comments all round. I also have some doubts about timing, but really nobody knows, so stepping in small with tight stops seems the right approach. The timing question is also due to what it is Mexico exports most and hence how quickly the economic activity picks up, or not. As vehicles and machinery are the main categories (60%) once could argue for a further delay in the recovery. (2019 figures, http://www.worldstopexports.com/mexicos-top-exports/): Vehicles: US$121.3 billion (25.7% of total exports) Electrical machinery, equipment: $81 billion (17.1%) Machinery including computers: $80.7 billion (17.1%) Mineral fuels including oil: $26.6 billion (5.6%) Optical, technical, medical apparatus: $19.9 billion (4.2%) Plastics, plastic articles: $10.8 billion (2.3%) Furniture, bedding, lighting, signs, prefabricated buildings: $10.3 billion (2.2%) Vegetables: $7.8 billion (1.7%) Beverages, spirits, vinegar: $7.5 billion (1.6%) Fruits, nuts: $7.4 billion (1.6%)

Julian, with the 2T expansion in balance sheet since March, do you think that this 2T in liquidity injection from the fed should be analyzed differently than the repo injection of Sept of last yr? When the repo problem popped up last Sept we were at full employment and still at 2%ish gdp, so on the margin that liquidity was more stimulative than today where we now have 10% unemployment and contraction GDP. Am I thinking about this correctly where liquidity in Sept was more stimulative compared to today’s liquidity of 2T being looked as patch work to fill the lost growth from the virus?

" if (still a big if) we go into a phase of a managed devaluation of USD along with a grab for resources, EM will begin to recover" I guess this is the key assumption. The argument on the dollar bull side has been that there is huge offshore euro$ debt, a large part of which is held by the private corporations. It would be very helpful if Julian can provide a direct counter-argument to that view by addressing these questions in this context: Can the swap lines and international repo operations allow money to flow to $ indebted offshore corporations? How? Is there enough political capital that would allow Fed to indirectly bail-out sovereigns and corporations in EM? The other problem that I struggle with dollar bear case is, every other country is also debasing their currencies. In fact, even EMs with seemingly tighter monetary policy are seeing >10% depreciation in their currency value w.r.t $, like India: https://think.ing.com/articles/reserve-bank-of-indias-whatever-it-takes/ India's 10 year bond is >6%. It has not been cutting rates aggressively (see above link). Yet, its currency depreciated at lot over the last year.

Thanks Julian. What a polarising topic atm. Longer term you make perfect sense but over the next few months how do you consider inherent reflexivity in your thesis? The world doesn't want a super strong USD but conversely trashing it would be just as damaging and would provoke angry responses from other leaders and their central banks trying to rebalance their own economies. CB's want the stable middle and neither extreme. Trashing the USD gives back competitive mercantile advantage to China and its currency peg...G20 ex-China want to claw back competitive advantage not reward them for giving us a virus. AUD at 70c would deflate a highly imbalanced Australian economy (80c would be tragic) since China is clearly not launching massive fiscal stimulus like it did in '09 and '16. The RBA has explicitly targeted a lower AUD to compensate for lost demand from a burst housing bubble (AUD seems more a reflection of the domestic economy that lacks the terms of trade boost required to attract foreign capital, while commodity prices signal deflation). And the Fed using the words "unlimited" really change anything? When was their action ever not unlimited? Everytime they felt the need to inject liquidity they have done so, and so has every other central bank in the world. Indeed Draghi already dropped this bomb when he said "Whatever it takes" in 2012. They always do whatever it takes. So I suppose I see a world where if you are right (and the Fed is the only CB to do whatever it takes on this seesaw ride) it is just another ugly extreme. So some middle ground where the USD is "not to hot " and "not to cold" to me is what every central banker really wants (maybe not what they get) where they take turns handing the devaluation batton around in a circle like the good old days. Now that markets are responding to monetary and fiscal aid I really wonder whether we have seen enough sustained deflation to bring about either USD extreme scenario yet. After all this crisis is only a baby at 2 months old.

guys for silver our vehicle is SLV right?

Hi Harry, One more question. Since you like infrastructure spending, I'm thinking they will spend a lot more on connectivity let's face it if it wasn't for the current connectivity structure we had in place we would have been way worse off. What ETF or stocks do you like in the 5G space telecommunication space in the USA? I read a lot of the USDA reports and there is already a big push to get more pipes out to rural America that is not being served now.

Julian, do you consider bitcoin to be paper or tangible asset?

Excellent stuff, Julian. Thank you. We're probably a bit early on the EM trade, but ultimately I agree that is where we will want to be. Demos favor that as well.

I'm seeing in percentage terms XME and SPX are both up around 30% from the lows. You see short term risk in the SPX at the 61.8 Fib level. Since the XME and SPX have a positive correlation I would think we would have about the same risk in XME as the SPX. Yet I do see the XME is barely over the 23.6% fib level so is this the reason you see less risk in the XME trade at this level? I'm just trying to understand how your process works? I agree with your trades and like the risk-reward, thus plan to scale in as I see them starting to work or let me stops work if they don't. Thanks Harry!

Hi Julian, is it possible that you are half-right? That is, we do see rise in value both in tangible assets and dollar? One theory I heard is that given the general impression of Fed's strong will, foreigners might flock to USD and US assets as being relatively much safer than their own domestic currencies and assets.

I think he is wrong on the timing, we are nowhere near the time to take any of the trades he is recommending, except the ones on gold and silver. I'd wait at least July, even October to take the trades he is recommending on EMs and against the dollar

Raoul and Julian now hold opposite views on the dollar. No longer just a timing difference?

Hi Julian, Re: EWW, XME, GDX, SLV, what is your time scale for hitting the targets roughly as I want to buy some calls and currently deciding how far out I should go. Perhaps June 30th?

So thoughtfully, clearly and succinctly laid out. Brilliant. Great job, Julian!

Thanks Julian. Timeframe caveat: any concern on further liquidation of real assets if Volquake hits again, a la Feb? Bonds seem to be pinned so that cascade moves more heavily to GLD/SLV or, frankly anything green to sell first?

While we might not revisit the market lows soon, both the technicals (fib retracements) and the recent, wrong perception in the market about 'opening the economy soon' and the impact of remdesivir makes it difficult for me to put any of the new trades on. We may face a next leg down soon if perception catches up with reality, especially if they do open in different states and have to close again. At that point, the effectiveness of the fed backstop will be tested again to see how deep the market falls. Wouldn't it be better to see how this plays out and wait at least a month before moving in to those new trades? I assume that in the mean time the impact of a sudden, significant drop in the DXY is rather muted, so keeping cash bears less risk in comparison?

Julian, did you get glasses? Take it easy looking at those charts! Speaking of real assets and dark places, any thoughts on Oil? I am reading Iraq is deteriorating from a health/political perspective, which seems to run the risk of drawing Iran in and then the US etc. Maybe this is a tail risk but from what I am reading this is becoming not unlikely.

Why the Russel / Silver ratio? There's obvious trends there, however don't quite follow the linkage. Reflation?

@Julian. We have finally broken through the $19-$20 WTI level that someone was defending. Do we have your blessing to buy some Tanker stocks?

Judging by the charts, this report must have been written at least 2 weeks ago?

Julien, what makes you prefer an outright long position in silver and XME over the pair trades Russel/Silver and SPX/XME?

Hi Julian, thanks for this note. With regards Silver, should we wait for it to come back to us a little more or jump right in with a tighter stop for our higher entry? Thanks.

Agree with everything except long AUDUSD. Those interested may revisit Gerard Minack's interview on RV in Apr 2019.