Is China the Villain in World Trade? Depends Who You Ask

900K Jobs Vanished: The Labor Mirage

The Bureau of Labor Statistics quietly dropped a grenade: U.S. job growth from 2024–2025 was overstated by more than 900,000 jobs.

This isn’t new. It predates Trump, tariffs, and even Powell’s first coffee of the day. The survey pool has shrunk, the data set hasn’t scaled with the economy, and fewer companies are reporting. The fix? Mandatory reporting—census-style.

Macro cue: Downward revisions usually flash after the real economy has already stumbled. We’re not heading into a downturn—we’re already in the afterglow.

• Street take: Strategists are trimming exposure to consumption stories, dusting off bonds, and betting harder on cuts.
  
• Real-world play: Jobs data is upstream of GDP. Don’t ignore the knock-on effects.

FOMC FOMO: Powell Blinks, Doves Take Flight

From Jackson Hole to Wall Street: Powell’s tone shifted. Odds of a September cut? 90%+. The PPI miss makes a 50 bps cut not just possible, but probable.

• Why: GDP growth is fading, labor amber lights flashing, and hawks are flying south.
  
• Language pivot: Inflation is yesterday’s war. The Fed’s new motto? Don’t torch jobs for sport.
  
• Risk: The real danger isn’t overtightening—it’s an unemployment spike the Fed can’t smother with tweaks.

Disinflation Signal: PPI Softens, CPI Holds, Claims Spike

The Producer Price Index undershot. CPI landed in line (YoY 2.9%, Core 3.1%). But jobless claims at 263k—the highest since 2021—set Powell’s Jackson Hole warning in motion.

• Market reaction: Treasuries rallied, fed funds futures went all-in on cuts—possibly a bold 50bps move.
  
• Narrative shift: Sticky inflation died, “policy error” took its place.
  
• Portfolio edge: Bonds? A trade, not a thesis. Hard assets—gold, silver, BTC—still the hedge to own.

Rolling Recession Hits a Wall—Recovery on Deck?

The “rolling recession” narrative is breaking down. Even Morgan Stanley’s Mike Wilson now concedes the cycle may be shifting.

• Sector rotation: Defense, energy, and even bruised retail names are starting to bottom out.
  
• Sentiment: Bears are being squeezed into FOMO rotations.
  
• Reality check: Credit risks, commercial real estate cracks, and weak global demand still linger.

Investor edge: If you stayed the course, you’re positioned for the regime shift. If you got tossed around, take note—new leaders are already on the field.

Oracle’s $455B AI Cloud Backlog Breaks Records

Markets haven’t seen this before: Oracle surged 36% in a day, its best since 1992, rewriting big-cap history.

• Catalyst: A record $455B AI backlog (up 359% YoY), headlined by a $300B OpenAI contract.
  
• Investor shrug: Earnings miss ignored; multi-year cloud growth guidance raised.
  
• Ripple: Oracle’s move pulled the S&P 500 and Nasdaq to new highs, carrying Nvidia and Broadcom along.

Volatility, Rotation, and the Gold Hedge

Markets are back in churn mode. Investors are overpaying for protection while money rotates away from big tech.

• EM flows: New yield isn’t all U.S.-bound—watch emerging markets.
  
• Gold and Silver shine: Uncertainty fuels demand; gold stays strong as Treasuries wobble. Silver continues its breakout.
  
• Structure: Rotation out of beta tech into value/non-U.S. equities is no longer a subplot—it’s the main event.
  

The Bifurcated Economy: Bulls Cheer, Workers Sweat

Wall Street is dancing while Main Street drowns. Markets levitate on liquidity. Workers face dwindling prospects.

• The riddle: Is this divergence unsustainable, or simply the new normal of a tech-financialized economy?
  
• Historical echo: Think 1999 or 2007—cycles where financial signals ignored real-economy cracks.
  
• Certainty: The wider the gap stretches, the sharper the snap when it breaks.

Quick Hits—MacroMashup Style

• Fed Doves vs. Disinflation: A 50bps cut isn’t off the table.
  
• Yield Curve: Bull steepener in play; banks finally have something to gossip about.‍
• China Watch: Trade recovery creeping, but credit risk bubbles lurk.

In The Markets

Your Playbook

• Investors: Hedge long-duration bets, rotate into laggards, keep dry powder for pivots.
  
• Operators: Lock in costs now, monitor wage shifts, test pricing power.
  
• Commentators: Skip the “soft landing” cliché—focus on policy panic and real labor risks.
  
  

MacroMashup Final Word

Consensus is melting. Jobs data is cracked. Powell is blinking. Inflation is transitory again. Bears are running out of narrative. The regime is shifting—and the greater risk is missing a policy-fueled upside. Hard assets like gold, silver and BTC agree.

Main Street and Wall Street may never rhyme again, but the beat goes on.

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September’s “curse” is famous. 2025’s setup looks different. A dovish/succumbing Fed, abundant liquidity, and resilient services spend are colliding with well-telegraphed fear about stretched valuations. When the crowd leans one way, the tape often runs the other.

Fed: From Theater to Action

• Pivot Watch: August minutes flagged “modestly restrictive”; Powell has effectively pre-announced a September cut and markets have priced it.
  
• Labor & Growth: Softer prints and global wobble reduce the case for “higher for longer.” Unemployed > job openings for 1st time since April 2021.
  
• Liquidity: US money-market funds still sit on $7T+; buybacks pause into blackout and re-emerge late Sep/early Oct.
  

Bottom line: The September jinx meets a dovish Fed and dry powder. Consensus for weakness is crowded and may break the historical pattern.

Metals: Sleeping Giants Wake

Gold

• Breakout: >$3,500/oz; ATH in USD and across many local currencies.
  
• Flows & Drivers: Central-bank accumulation (China/EMs), lower yields, softer USD, geopolitical risk bid.
  
• Positioning: ETFs swing to sustained net inflows; upside options skew (more demand for call options); above all major moving averages.
  
• Allocation Shift: Large US wealth platforms slide 5–10% gold into models for “resilience.”

Silver

• Follow-through: >$41/oz, tracking gold’s technicals.
  
• Industrial Pull: EV/solar demand up double digits YoY; inventories at multi-decade lows; newly listed as a critical mineral.
  
• Beta Trade: Silver–gold ratio compressing; silver’s technical breakthroughs are historic, and signal strong upside from here..
  

Macro read: It’s more than a trade—confidence in fiat is eroding; portfolios are reaching for timeless hedges against inevitable monetary debasement.

Bitcoin: Quiet Coil, Loud Potential

• Volatility: Realized and implied at multi-year lows.
  
• Range: $108–111k consolidation.
  
• Under the Hood: Whale accumulation highest YTD; miner difficulty up (i.e., because more miners are at work, the network makes it more difficult to find a block); options skew tilts bullish; “max pain” (the price at which the largest number of open options expire worthless) implies bang if a catalyst hits (traders on the wrong side have to rebalance quickly).
  
• Energy Value: Capriole’s Charles Edwards pegs “energy value” > $160k.
  

Trade watch: Smart money rolls and adds. Catalysts—regulatory clarity, ETF flows, global easing—sit just offstage.

Climate Wars: DOE Sparks a Policy Brawl

• DOE View: Warming’s economic damage may be lower than assumed; over-stringent mitigation can backfire; grid reliability needs urgency.
  
• Pushback: Media calls it optimistic/politicized; greens push for realism and decry the blatant popular narrative disregard.
  
• Capital Flows: Despite rhetoric, money follows policy—utilities and IPPs accelerate procurement into expected incentives.
  

Keep in focus: The debate polarizes; spending doesn’t. Utilities become political footballs as they juggle rules vs. rates.

Tariffs: Legal Setback, Policy Not Done

• Ruling: A US appeals court clipped emergency-based tariff powers—curbing the admin’s latitude, but delaying effect until higher court reviews.
  
• Street Take: Manufacturers face uncertainty; equities largely assume the White House finds a workaround; the bond market now loves tariff revenue to pay down debt!
  
• Next Stop: Supreme Court could restore the authority, keeping trade policy a volatility lever for autos, electronics, and solar components.
  

Spotlight: A “Shale Moment” for US Critical Minerals?

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(Deep dive: Is this the shale moment for critical mineral mining in the US? — The Oregon Group)

Why It Matters

• Security: US fully import-dependent for 12/50 criticals; >50% reliant for 31 more—fragile for energy and defense.
  
• Demand: EVs, batteries, renewables, semis could double or triple demand this decade.
  
• China’s Edge: Refining/processing dominance raises strategic alarms.
  

What’s New

• Tech: DLE lithium recovery (>80%), solvent-free rare earth separation, plasma reduction for titanium/nickel, and tailings mining at scale.
  
• Policy: DPA (Defense Production Act) funding, faster permits (7 yrs → 2–3), strategic stockpiles, new Aug. 2025 list (adds copper, silicon, silver).
  
• AI/Smart Mining: Digital twins + machine learning accelerate exploration and cut downtime.
  
• Financing: OEM offtakes de-risk projects and unlock capital.
  
• Oklahoma Model: Lithium/REE (rare earth elements) refineries and battery recycling set for 2026; Public Private Partnerships speed workforce and tech transfer.
  

Risk tape: Technologies are nearing commercial but still face learning curves—echoes of shale’s early years.

Closing Reads

• The September curse meets a dovish Fed and ample cash.
  
• Gold/silver price action signals a regime shift; allocations are responding.
  
• Bitcoin’s calm is deceptive—setup favors asymmetrical upside.
  
• DOE’s roadmap fuels debate while channeling capital.
  
• Tariff authority heads to SCOTUS; watch import-heavy sectors.
  
• Critical minerals show shale-like ambition; Oklahoma is the lab.
  
  

In The Markets

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Non-farm payrolls: Markets were expecting a soft print—consensus at +75–80k payrolls, unemployment at 4.2%. Instead, we got +22k, with June revised down to -13k and July nudged higher by +6k.  

Translation: weak, but not a collapse. Weak enough to lock in a September cut (essentially 100% odds), yet not so ugly that investors panic.  

In Fed-speak, this is the sweet spot for “bad news = good news”—soft labor gives Powell the cover to ease, and risk assets the green light to run higher. 

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Nvidia vs. The Fed: Who’s Boss Now?

Headline Revenue: Q2 revenue surged to $46.7B, up 56% YoY, with EPS at $1.05—both comfortably above consensus.

Growth Drivers: Relentless demand for Blackwell AI chips and data center hardware powered results. Management doubled down with a $60B buyback and $10B in shareholder returns.

Data Center Miss: The core segment—data centers—printed $41.1B, narrowly missing the street’s $41.29B estimate.

Caveats: Absent H20 chip sales to China, swelling inventories, and softer margins kept the afterglow in check. Red tape from a revenue-share deal with Washington is also slowing rollouts.

Stock Reaction: Shares slipped ~3% after hours—evidence that even massive beats can disappoint when expectations are stratospheric.

Macro Market Impact: Despite the fireworks, S&P futures, gold, Bitcoin, the dollar, credit spreads, and Treasuries barely budged. Nvidia may dominate productivity’s future, but Powell still won this round of market reaction.

The old mantra “Don’t fight the Fed” is meeting a new rival: “Don’t bet against the chipmakers.” But this week, Powell had the louder signal.

Powell’s Pivot: Jobs Over Inflation

At Jackson Hole, Powell reframed the Fed’s priorities. 

Tariff-driven inflation? Real, but temporary. 

 Jobs? The real worry.

• Immigration policy is denting payrolls.
  
• May and June’s downward revisions spooked the Fed.
  
• With policy already “restrictive,” Powell believes he can ease without re-igniting inflation.

Markets cheered. Powell looked less like an inflation hawk, more like a pragmatist navigating weak labor, fiscal debt math, and geopolitical shocks. Quietly, Treasury’s ballooning interest costs make lower rates more than just monetary policy—they’re fiscal necessity.

Lisa Cook Fired: Bad Optics, Worse Judgment

• Cook’s dismissal looked messy but was inevitable. Two back-to-back residential mortgages flagged red for regulators. No charges yet, but DOJ scrutiny made her role untenable.
• In any compliance-driven industry, this would have triggered a suspension. Credentials can’t offset poor optics. At the Fed, governance still matters.
• Cook’s suing Trump (who isn’t?), and says she won’t be ‘bullied’. Let’s see the substance of her defense.
• If Trump’s firing holds, his appointees will have four of seven voting governors.

Government, Inc.

Anthony Pompliano argues Washington is being run like a business. He’s not wrong:

• The alleged wisdom of open markets, free trade, and borderless economics is like a failed strategy being rebooted.
  
• Taxpayers as ATM—shareholders/voters revolted last November.
  
• Politicians are outsourcing accountability while deficits compound from pet projects and boundless entitlements offered to buy votes.

The “government isn’t a business” defense is how trillion-dollar deficits metastasized. The global reset won’t wait for Washington’s denial.

Energy, Russia, and the Bond Market

Russia continues to gain ground in Ukraine as Western support wanes. Every barrel of offline Russian crude tightens U.S. Treasury math. Oil shocks push inflation expectations higher and Treasury funding costs wider.

Sanctions don’t solve it. Wall Street still needs supply continuity. Treasury Secretary Scott Bessent knows it—even if he can’t say it.

China’s Rare Earth Chokehold

U.S. defense manufacturing runs on Chinese rare earths. Decoupling talk is political theater. Supply chains remain bottlenecked. Tariffs may weigh on China’s growth, but Washington still imports dependency along with the minerals.

Kenya’s RMB Debt Shift: Currency Wars in Motion

Kenya’s choice to re-denominate debt into yuan highlights Beijing’s rise as global lender. The RMB is becoming the currency of sovereign survival, while the dollar remains the currency of global allocation.

The USD still dominates, but its monopoly is eroding at the margins. Future crises may not follow the old dollar wrecking-ball script.

Big Picture: A Fractured Order

• U.S. equities remain the anchor but diversification flows are rising.
  
• Old monopolies—monetary (Fed), military (U.S.), energy (West)—are fracturing.
  
• Tech giants like Nvidia, supply shocks, and alternative funding regimes are redrawing the map.
  
• Interdependence, not dominance, is the new macro law.
  
  

The superpower era is giving way to fragmentation. Investors who don’t adapt will miss the new playbook.

Macro Odd Lot: Swift & Kelce’s Pre-nup M&A

Taylor Swift and Travis Kelce’s engagement isn’t just a love story—it’s a liquidity event. $1.7B combined net worth, lawyers on speed dial, and GDP implications fit for a Treasury briefing.

Call it: Love Story, Baby, Just Sign Here.

In The Markets

Equities: Still dominant, though allocations to Europe/Asia accelerating.
Energy: Oil risk premium remains embedded in Treasury math.
FX: RMB rising as funding currency, dollar softening at the edges.
Tech: Nvidia results ≠ market mover; Powell still has the mic.

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