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It's funny how investors can make or break a country. As investers pull out of China, China will slowly implode. And their banking system may be on the verge of collapse also, since most of china GDP is construction related, and building buildings which no one occupies is not a good economic practice. And if the dollar collapses, as some say it will, the value of their dollar holdings will be worthless. Problem with all this is that as the Chinese economy slows, they will turn more and more to their military might. Wars have always created a diversion from the real issues. The Chinese people will turn more toward their government instead of away from it in times of war. At least this will be their reasoning. The US can grow from all this but the problem is that the Elite (Illuminati?) will continue to try to destroy and enslave the US. Whoever controls the money (world financial system) controls the world. They have more control over the world than all the armies of the world do. The future doesn't look too bright.
"And if the dollar collapses, as some say it will, the value of their dollar holdings will be worthless. "
The value of dollar has already collapsed as evidenced by a 20 year chart of the dollar index. The Fed in its fervent desire to promote debt has DEPRECIATED the dollar. Most investors purchased dollar based assets and expected the asset prices to RISE because of continued depreciation of the dollar. Now that the bubble has burst, how can anyone expect the dollar to continue to depreciate? Consider that the dollar is a DEBT based instrument and therefore what we will see is appreciation of the dollar as the debt collapse intensifies. At some point, if there is a systemic credit freeze, the question of what to do with the dollar will become a political decision i.e. should they print to destroy the dollar or let defaults run their course. I suspect that the latter will prevail and any attempt to print will only create a greater freeze in the credit markets.
Even better, Taiwan has elections on January 14... if the nationalist win, you could very well see China invading Taiwan.
Having lived in China now for 7 years, every year I note aloud the best time to invade China would be in their "Spring Festival" (AKA Chinese new year) as the constant sound of fireworks would mask any shelling. Same would apply to Taiwan. This year the Chinese New year is centered around the 23rd of January.........
According to Chinese fortune-telling, the year of Dragon will not be good for China and the rest world as well.
year of the squid
China has already manufactured NEXT YEARS christmas gifts and has them in warehouses.
next year's tear gas as well?
Says as much about prices as it does about growth. A perfect deflation is emerging with only one entity making combating this menace job one: Bernanke's Fed. Obviously even if gold simply maintains it's price that makes for a an amazing store of value in an environment where prices fall...or even collapse. Of course the same is true of equities: simply maintaining...while still paying dividends if not raising them...and that is an awesome store of value as well. Of course nothing beats the government debt of the USA in this scenario. Those interest rates could fall dramatically under this scenario.
The USA once thought that China was going to be some dumb arsed export destination for its industry. With that stupid assumption gone, we now have China's assumption that the USA can be the eternal customer also being proven dangerous and wrong. The third stupid assumption by both of them is that they can keep the show going through a combination of bad accounting tricks and even worse money printing/pumping. What wil the next dumb approach that we will winess?
Cliché, yes, but the bigger they are, the harder they fall. How apropos.
""we see a very low probability of a hard landing case for China""
give me a fukin break!
And that doesn't even begin to take into account the real estate bubble collapse.
Luuuv my FXI puts
Billionaire RE Devolopers & Bankers stole the show there as some other places.
China banksters are just as in deep doodoo as the rest of them around the globe, but not as bad as the USA banksters. American banksters should of went bust long ago, but they will keep stealing and lieing as long as the have buddies in the beltway and the tv stations keep brainwashing the sheeples of merika.
The best I can say is that this doesn't come as a surprise. No production economy can prosper by selling into a declining market. Not only is China's export market declining, but manufacturing decline now feeds into the decline of the domestic market. It's a vicious circle. The global economy is based on another vicious circle, the fiat currency debt system. Where does it come out? History says it never comes out, as good as it used to be.
Deflation in what no one wants and inflation in what everyone needs.
Well done Ben. The only question we might have: Was it by design? I think yes. The biggest Landlord in the USA will be Squidly...on pennies on the dollar.
“the world's future prosperity depends on China's growth.”Maybe it’s just me, but something about that statement is a bit more than disconcerting.
the disconcerting thing is the bullshit of the statement. 25 cents an hour labor rates doesn't add up to a 'middle class' no matter what the globalists want everyone to believe. Therefore an autonomous and sustainable economy will never occur. Trade used to be, before it was perverted by shysters, trading what 1 nation cannot produce due to know-how or resource availability limitations with another nation that does have such know-how or resources ... not wage arbitrage between national scales of economy.
You really have no clue about how much cash Chinese have. In most cities, the "middle class" is richer than your so-called middle class.
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