{"id":1468827,"date":"2024-06-01T21:30:00","date_gmt":"2024-06-02T01:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1468827"},"modified":"2024-06-01T21:30:00","modified_gmt":"2024-06-02T01:30:00","slug":"what-a-china-taiwan-conflict-could-mean-for-semiconductors-gold","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/what-a-china-taiwan-conflict-could-mean-for-semiconductors-gold\/1468827\/","title":{"rendered":"What A China-Taiwan Conflict Could Mean For Semiconductors, Gold"},"content":{"rendered":"

What A China-Taiwan Conflict Could Mean For Semiconductors, Gold<\/span><\/p>\n

\n

Via SchiffGold.com,<\/em><\/a><\/p>\n

American-made weapons will soon be bound for Taiwan,\u00a0American lawmakers are telling Taiwanese President Lai Ching-te<\/a>, sending shockwaves of uncertainty through electronics and metals markets this week.<\/p>\n

<\/a><\/p>\n

In a pointed \u201ccelebration\u201d of Lai\u2019s recent inauguration, Chinese military aircraft and warships have been conducting large-scale drills around the island. China considers Taiwan a strayed member of its territory and hasn\u2019t ruled out the use of force to assert its claim.<\/p>\n

\u201cChina will surely be reunified,\u201d Chinese President Xi Jinping said in his\u00a0New Year\u2019s address<\/a>. \u201cCompatriots on both sides of the Taiwan Strait should be bound by a common sense of purpose and share in the glory of the rejuvenation of the Chinese nation.\u201d<\/strong><\/em><\/p>\n

Michael McCaul, U.S. House Foreign Affairs Chairman,\u00a0told Fox that the recent Chinese demonstrations are the most \u201cprovocative\u201d yet.<\/a>\u00a0If China attacked Taiwan, McCaul predicted during his visit to the region, \u201cit would make\u00a0Iran shooting into Israel<\/a>\u00a0look like child\u2019s play.\u201d<\/p>\n

\u201cI think right now, we will probably lose,\u201d <\/strong><\/em>he said.<\/p>\n

One likely victim of such a conflict would be Taiwan\u2019s semiconductor industry, which holds about\u00a070% of the world market share<\/a>. Total industry value is\u00a0expected to set a record this year at $630 billion<\/a>\u2014but that could change if China invades Taiwan and, as McCaul warns, \u201cthe island doesn\u2019t have the capacity to defend itself\u201d or its industry.<\/p>\n

\u201cEverybody that has phones, cars\u2014we have advanced weapons systems\u2014everything\u2019s dependent on semiconductors and this island, over time, because we\u2019ve offshored [manufacturing],\u201d\u00a0McCaul told Fox News Digital<\/a>. \u201cAnd the shutdown of what\u2019s happening [in Taiwan], semiconductors, would really shut down the world.\u201d<\/strong><\/p>\n

Changes in the market for semiconductors mean changes in the market for many base metals, including silicon, germanium, and gallium, all of which are\u00a0critical components<\/a>\u00a0for semiconductor manufacturing. Gold is also a key component of the production process because of its anti-tarnishing properties.<\/p>\n

With a semiconductor shortage could come other electronics shortages, squeezing markets for everything from refrigerators to cell phones to electric vehicles. There\u2019s precedent for such a shakeup, which occurred during the semiconductor shortage of the COVID-19 pandemic\u2014and back then, the economic pandemonium didn\u2019t stop short at consumer electronics.<\/p>\n

\u201cThe recent semiconductor shortage isn\u2019t some far-off issue\u2014it affects everyday citizens around the globe,\u201d <\/strong><\/em>the\u00a0Council on Foreign Regulations reported<\/a>\u00a0last year. \u201cSupply-chain challenges can yield price hikes for consumers and lost jobs for manufacturers. Companies laid off thousands of workers [during the COVID shortage] because the United States lacked chips.\u201d<\/p>\n

Such a drop in semiconductor production might initially appear to signal a decrease in demand for component metals, like gold. That seems to be the market\u2019s immediate intuition, as shown by\u00a0mildly ebbing gold prices following<\/a>\u00a0the Chinese drills\u2014but a major complicating factor is quickly becoming apparent. China, already one of the\u00a0world\u2019s largest gold consumers<\/a>, is busy\u00a0buying up the precious metal at record rates<\/a>. The country\u2019s aggressions toward Taiwan will likely continue to drive precious metal prices upward, signaling a second precious metals boom when coupled with the rising market uncertainty and inflation that inevitably follow conflict.<\/p>\n

\u201cChina is unquestionably driving the price of gold,\u201d Ross Norman, chief executive of MetalsDaily.com,\u00a0told the New York Times<\/a>. \u201cThe flow of gold to China has gone from solid to an absolute torrent.\u201d<\/p>\n

Some experts suggest the move to amass precious metal stores\u00a0could signal preparation for larger Chinese military involvement in Taiwan and increasing avoidance of ties with the U.S. dollar, which may be sanctioned in response to Chinese aggression.<\/a>\u00a0In short: China is betting on gold, not the dollar.<\/p>\n

\u201cThere is absolutely no question that the timing and the sustained nature of [China\u2019s gold] purchases are all part of a lesson that [the Chinese] have drawn from the Ukraine war,\u201d Jonathan Eyal, associate director of the UK\u2019s Royal United Services Institute, told the Telegraph. \u201cThe relentless purchases and the sheer quantity are clear signs that this is a political project which is prioritized by the leadership in Beijing because of what they see is a looming confrontation with the United States.\u201d<\/p>\n

\u201cIf [China] get[s] much closer to bullying Taiwan and countries start to move their investments out of China, [the gold reserves] will give them a bit of padding to be able to ride through some of the difficulties,\u201d<\/strong><\/em>\u00a0added Sir Iain Duncan Smith<\/a>, co-chair of the UK Interparliamentary Alliance on China.<\/p>\n

Meanwhile, the President has signed an aid package with $8 billion earmarked for Taiwan and the surrounding region, a move that\u00a0aggravated US-China relations<\/a>\u00a0and will encourage economically painful sanctions on both sides. Such spending could also\u00a0pull the trigger on domestic inflation<\/a>, resulting in the continued weakening of the U.S. dollar even as the Chinese economy is strengthened by its gold reserves.<\/p>\n

This type of monetary policy is why some economists, including Danial Lacalle of the IE Business School in Madrid, are sounding alarm bells at governmental inflation employed as a \u201cpolicy, not a coincidence.\u201d In this environment,\u00a0Lacalle warns<\/a>, it\u2019s a bad idea to bet on inflated currency when choosing investments.<\/p>\n

\u201cStaying in cash is dangerous; accumulating government bonds is reckless; but rejecting gold is denying the reality of money,\u201d<\/strong><\/em> Lacalle said.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSat, 06\/01\/2024 – 17:30<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/geopolitical\/what-china-taiwan-conflict-could-mean-semiconductors-gold<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

What A China-Taiwan Conflict Could Mean For Semiconductors, Gold Via SchiffGold.com, American-made weapons will soon be bound for Taiwan,\u00a0American lawmakers are telling Taiwanese President Lai…<\/p>\n","protected":false},"author":0,"featured_media":1468828,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1468827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1468827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1468827"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1468827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1468828"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1468827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1468827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1468827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}