From the Notebook posts are reworks of articles originally published for my Patrons. This one was first published on September 7th.
While it’s becoming easier to see how the various projects supporting the Great Reset are progressing just by reading the headlines and seeing how things are spun to manufacture consent, sometimes a story is deeper than the headlines.
I’ve watched the situation surrounding Evergrande’s collapse in China unfold like everyone else in this space. Like many of you, and hat tip to Zerohedge for being on this from the beginning, I could tease out some of the story just by following the progression of the headlines, especially in light of China’s big changes in attitude towards foreign capital.
Over the past 2 years China has cracked down on a number of sectors within its economy. It started with the moves on Hong Kong and the extradition law which sparked huge protests in the summer of 2019. It evolved into the curious disappearance from public life for months of Alibaba CEO Jack Ma. This summer we saw China uproot the cryptocurrency market by kicking out all of the bitcoin miners over a weekend, they’ve doubled down on this policy again recently.
In September 2019 I wrote that I thought China’s moves on Hong Kong were pre-emptive moves to undermine British influence there through the banking system. Because, the protests in Hong Kong last year looked an awful lot like Portland’s and Minsk’s and Kiev’s (2014) etc. etc.
There’s a color revolution angle here that hasn’t been openly discussed.
When the riots in Hong Kong began I wrote:
My working thesis at this point, and this is conjecture based on my intuitions, not journalism, is that the through-line here revolves around what can best be termed the British Deep State.
British oligarchy has deep roots in India, Israel, Hong Kong, Saudi Arabia and the U.S. intelligence and diplomatic corps. It has deep animosity towards Russia, China and Iran, far deeper than the U.S. does.
This is policy that goes back more than one hundred and fifty years. The City of London is the primary domestic obstacle to Brexit.
Hong Kong is a key cog in the West’s ability to control China’s growth, so destabilizing it now makes sense. The Hong Kong dollar is pegged tightly to the U.S. dollar and the arbitrage trade between offshore and onshore yuan is the source of a lot of ‘tail wagging the dog’ in financial markets.
It makes even more sense if China’s new extradition law was aimed at bankers and prop traders guilty of currency manipulation of the offshore Yuan trade than it is about ‘human rights abuses.’
Now, the Hong Kong dollar peg didn’t break and eventually things calmed down. That thesis, however, of the extradition law being about kicking out British ‘bankers’ who were really British Intelligence from Hong Kong tracks with everything that’s happened since then. The resultant riots were spun up to cover and/or stop this, possibly foment a color revolution there.
In the end it didn’t work.
Xi learned a valuable lesson about allowing Western ‘influence’ and money run wild on his shores. And he didn’t like it one little bit.
Now fast forward to today where he’s making similar moves to the ones Russian President Vladimir Putin made last decade to eventually destroy the color revolutionary forces mounting there — kicking out the foreign NGOs, cracking down on foreign ‘journalism,’ jailing oligarchs and rooting out IMF-influenced financial liberals at the Bank of Russia.
Sound familiar? After taking control over Hong Kong and putting all the ‘tall poppies’ on notice, Xi is removing the one child limit for families, outlawing metrosexuality in Chinese media, limiting ‘screen time’ for children and, most importantly, changing the rules for foreign investment.
He’s done this so aggressively and, apparently successfully, that none other than Societal Vampire himself George Soros has written not one, but two, op-eds recently denouncing Xi in Satanic terms.
Takes one to know one, I guess.
All of these things have something in common, rooting out all competition to China’s rollout of its digital yuan, which has been in trial usage for the past few months. I believe the story surrounding Evergrande’s collapse is part and parcel Xi’s strategy to remake the way capital is handled inside China.
So, building on September 5th’s Patron Market Report where I talked at length about Michael Every’s article on Xi’s relationship with Mao, Lenin and Marx himself, let’s dig in to what’s going on with Evergrande.
From Zerohedge’s take last week:
Shanghai exchange data showed the bonds sliding more than 25% to a low of 40.18 yuan after the resumption of trade on Monday afternoon. The company’s 5.9% May 2023 Shenzhen-traded bond , which was also suspended, fell more than 35% after trading resumed. China Chengxin International Credit Rating Co (CCXI) downgraded Evergrande and its onshore bonds to AA from AAA on Thursday, and placed the company and its bonds on a watchlist for further downgrades, effectively freezing the company out of the repo market.
The endgame for Evergrande started on Friday, when China Securities Depository and Clearing Co. (CSDC) reduced the “conversion ratio” of the July 2022 bond to zero, effective Sept. 7. Other Evergrande bonds were not included in CSDC’s table of conversion ratios on Friday as they no longer qualified for inclusion. The conversion ratio determines leverage limits for repo financing given a specific bond pledged as collateral. CSDC is owned by the Shanghai and Shenzhen stock exchanges. In other words, Evergrande suddenly finds itself with zero access to the repo market which funded it to the tune of billions heading into Friday.
Since then Evergrande’s bonds have stopped trading altogether, angry property owners are surrounding the main building and the company is well on its way to being China’s Lehman moment.
Evergrande’s problems were so large that even disposing of assets over the past year did nothing to firm up its rapidly deteriorating balance sheet.
Being the biggest mortgage lender in China, its collapse would be catastrophic for China’s near-term financial health. And, as of Friday, the PBoC finally began taking the situation in the grander sense seriously.
The People’s Bank of China added 90 billion yuan ($14 billion) of funds on a net basis through 50 billion in seven-day and 50 billion in 14-day reverse repurchase agreements on Friday offsetting 10 billion in maturities, the biggest one-day injection since February; it marked the first time this month it added more than 10 billion yuan short-term liquidity into the banking system on a single day.
One would think that such a large player would immediately get a bailout from the PBoC, but it didn’t come immediately. In fact, it’s barely materialized.
And that’s why this story is so interesting in a global sense.
Because now that Evergrande’s collapse is all but assured in real terms, the first question that comes to mind is, what comes next?
Nothing good, obviously. For the past two weeks I’ve watched various markers of dollar liquidity roll over all around the world. German bunds keep rising in yield.
The Euro is in freefall, despite the ECB coming out last week talking about tapering QE in real terms, while the Fed is still making goo goo eyes at the dictionary definition of ‘transitory’ hoping some Wikipedia ‘editor’ will come in and change it for them.
Not convinced? How about that silly old USDX that everyone thinks is going into the toilet next month.
I have a few more, but nothing says trouble like a choppy short end of the U.S. yield curve.
But the better question is who benefits?
Xi has systematically cut down all the ‘tall poppies’ in China’s financial system over the past year. He went on a rampage through the competition for his Digital yuan over the summer.
So, it tracks that Evergrande may be part of a bigger plan to take greater control over the property market in China by the state.
And for everyone now reflexively screaming “Communism!” realize that if this is China’s Lehman Bros. what was the ultimate effect of that debacle here in the U.S.?
The nationalization of the mortgage industry with Fannie Mae and Freddie Mac backstopping and setting the rules for every mortgage in America.
Michael Every pointed out (article linked above) that there’s also precedent for this in China, as he notes about ‘The Zhejhang Example”
- Direct targeting of inequality (of intra-provincial GDP per capita gaps between rural and urban areas);
- Aiming to increase the labor share of GDP to > 50%;
- More urbanization;
- Property taxes (on private housing) and building new state-owned rental properties (i.e., social housing);
- Letting people without official hukou residence access state services, which is a genuine revolution;
- More spending on social services – and “donations” from local billionaires collectively worth $236bn;
- Lower cost business loans for favored sectors, including manufacturing, agriculture, and tourism;
- SOEs building more infrastructure, “even if it generates low returns”; and
- Breaking up monopolies.
When I first wrote this for my patrons on September 7th, I said..
If Evergrande was going to get a bailout it will happen when its bonds have been driven to literally pennies on the dollar. At that point the state can come in, guarantee the mortgages and buy them up in one big Blackrock-esque plundering a la Venezuela.
Hrmmm. I guess I was a little optimistic in thinking that they wouldn’t just be driven to literally zero. It must be my free market principles showing.
Sure, dealing with Evergrande will require a lot of money from the PBoC, possibly even writing down the value of some, if not all, of those mortgages, once those pesky bondholders have been bankrupted.
The Yuan will have to weaken some, probably 10% back towards 7.00 versus the dollar.
But, after all of this, I think that’s just the first part of this story.
The second part is what Zerohedge brought up 11 days ago via reporting from Bloomberg….
U.S. dollar bonds of other Chinese financials are now in real trouble. How many times have I made the point that offshore dollar-denominated debt is the reason why the dollar can’t crash like so many talk about?
Well, I guess I have to make it… again.
From Zerohedge:
With Evergrande’s collapse now a question of when not if, concern is building about the financial health of other Chinese developers, including Fantasia Holdings Group Co., Central China Real Estate Ltd. and Guangzhou R&F Properties. Moody’s lowered its rating on Guangzhou R&F by one notch to B2 on Friday and put the builder on watch for further downgrade, citing increased refinancing risks. Guangzhou R&F’s note due 2023 is at 58.4 cents after plunging 18.7 cents last week.
The Money Shot from Bloomberg:
Property firms need to repay or refinance some $14.6 billion in dollar notes maturing through the end of this year. Dollar bond sales in August by Chinese developers were the lowest since the lunar new year lull in February, and were just 14% of January’s volumes, Bloomberg-compiled data show.
This is where the next part of this story slots into place. This is feeding the rising dollar. it also feeds right into Xi’s plans to de-couple and de-dollarize the Chinese economy. How easy is it for him and the PBoC to simply shut off the flow of dollars through Hong Kong and create a massive arbitrage opportunity between offshore yuan (CNH) and onshore yuan (CNY)?
The result would be the collapse of all of these firms. When a state does this, like China’s, they have the opportunity to nationalize all the property under management, write down the debt, stiff the bondholders and call it a day.
When Obama and Bernanke did it, they called it ‘saving capitalism from itself.’ Ask me why I’ll never buy another GM product, aside from the fact that they are some of the worst cars on the market.
When China does it will it be any differently reported at home?
It doesn’t matter if it smells like teen communism…
China is indeed undergoing massive changes to the way it handles capital. Lastly, how easy would it be for the Fed to help or hinder this process by feeding or denying the markets dollars?
As I’ve been banging my shoe on the table about since June’s FOMC meeting, the Fed is already tightening. If Powell is so dovish like the perma-USD bears tell us, why has he pulled more than $700 billion off the market in less than 90 days?
The Fed touched off a firestorm in June and it began in the Chinese Junk Bond market. The Bloomberg article linked above led with this chart (annotations mine).
Bottom line, the US dollar is going higher here… a lot higher.
And cui bono? Or, more importantly, cui fooked?
For days leading up to the ECB’s latest meeting the media kept trying to jawbone down the dollar by telling us that Christine Lagarde would taper QE. She announced that she would but gave no timetable nor amounts or anything. Just a big fat, French, “Trust me.”
Lagarde’s announcement was fodder to the fiscal conservatives in Germany that they ‘
“no really, aren’t on the hook for the EU’s massive pile of steaming, negative-yielding sovereign debt.” Once the German elections are over and Germans make the mistake of thinking that the Democrats (SPD) are any different than the Republicans (CDU) she will turn right back around and pursue even more QE to quell rising debt yields.
It will be a stark reminder that in a few weeks Germans will become subjects of the new, improved EUSSR which will also need no competition to their coming digital euro.
This is why the markets were bearish for around 10 days, we needed to rebalance and reset expectations within a strong US dollar regime. But, that’s clearly over as globally large caps are seeing “Monster Reallocations” as the shift from public debt to private assets continues. I see no reason to think Powell can’t allow equities to correct a solid 10-15% if need be in any dollar liquidity crisis.
The benefits to the Fed are simply too big to ignore.
The final series of questions I have for you are as follows:
- Is China pushing the Fed to fight a rising dollar to help remake its property market?
- Is the ECB pushing the Fed to do the same thing so they can satisfy the Germans by ending QE?
- Is the Fed’s tightening of US dollar markets putting everyone on notice who’s really in charge?
- What happens if the Fed looks the landscape over and by doing nothing in 10 days, makes everyone else’s heads spin?
Remember, China will need to de-value here, print a whole lotta yuan to deal with the fallout from Evergrande. A strengthening dollar feeds right into that need. The one who can’t afford a rising dollar is Lagarde and the ECB.
Lagarde tried to defend the euro by being hawkish and failed. Lawyers make shitty central bankers, if you haven’t noticed. The Fed can do nothing and still be in control of the situation. In fact, with the Euro closing in on the $1.17 Maginot Line again, aren’t they, in fact, firmly in control of Europe’s destiny?
If I’m right and China and the U.S. do not want to be manipulated into a war over COVID-9/11 then we’ll see the Fed assist Xi in de-coupling China’s property market from the U.S. dollar. That’s Xi’s gibs. The Fed gets to rein in the crazies in Congress and stiff the EU who think they are actually relevant.
Evergrande plus positive RRP yields and the threat of no fiscal stimulus from the U.S. should be more than enough to pull this off.
This would force the ECB deeper into, forgive the pun, the Chinese Finger Trap of what Germany needs (deflation, weak EUR and higher rates) versus what the weak EU states need (inflation, strong EUR and lower rates) making it ever more likely that the EU will have to face a split of its own in 2022.
Now, about that phone call between the U.S., the U.K. and Australia cutting the French out of the nuclear submarine market?
Boom.
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A lot of moving parts it seems. Your logic about the US dollar gaining strength compared to other fiat currencies makes sense, but it seems as a group, all fiat currencies are weakening relative to hard assets such as real estate, industrial metals and potentially gold in the future. If true, maybe the Fed is smarter than people give them credit for. The US dollar keeps its reserve currency status for longer than many people would have imagined possible, but as a group, fiat currencies decline in value making the US debt relatively smaller as time passes. And, since stocks are sort-of a hard asset, it would be less reason for them to decline in value as a group over time. Comment?
So, Europe is fucked!
Sshh…it’s been fooked for years, just they won’t admit it and try to fix it with “more Europe” all the time…and so they haven’t accepted it yet….soon though.
The French sub deal being torpedoed, ( yes, I went there) seems the 5 eyes, have decided the great reset will be on it’s terms and not the feckless, non-Anglo Europeans elites. They’ve crushed the Swiss banking sector and maintained the Caribbean banks, which maintain their presence on Commonwealth Islands., even Hong Kong. They tried to taint Powell in scandal and failed. Brexit was a bigger deal then I think we all realize.
France doesnt matter. It hasn’t been a reliable ally for decades. It flaked on NATO in the 1960s (ergo NATO headquarters moved to Brussels). England and Australia fought side by side with the US in Vietnam, Korea, Afghanistan… France undermined the US in all those places — and Vietnam was formerly known as French Indochina before the French got kicked out. France lost both WW1 and WW2, and only recovered but for the grace of England and the US.
It may not have been a very diplomatic thing to say, but going to war without the French is exactly like going to war without an accordion. Who gives a hoot?
Someone slap Macron upside the head and tell him to STFU…. oh wait, one of his countryman already did. Do it again.
France is really two countries anyway. Paris and the deplorables. Paris’ attitude toward the rest of France is horrible. Paris attitude toward the rest of the world is worse.
“If I’m right and China and the U.S. do not want to be manipulated into a war over COVID-9/11 then we’ll see the Fed assist Xi in de-coupling China’s property market from the U.S. dollar.”
I hope you are right, Tom.
Me too, me too.
Oh please. That train left the station already. Not going to happen.
Everyone knows COVID was created in a lab in Wuhan. Even Jon Stewart pointed out the obvious on left wing late night. Maybe the CIA can’t connect the dots, but everyone else has.
Everyone also knows that the Bat Lady / Wuhan labs were funded by EcoHealth Alliance in NYC, with tax dollars embezzled by Tony Fauci. The receipts were made public after a FOIA lawsuit. Maybe CNN can’t connect the dots, but everyone else has.
Everyone knows the Bat Lady didn’t act alone. In addition to Fauci and Peter D? (the Ecohealth guy), there is a researcher / professor at U of North Carolina and another one at Oxford (England) feeding her leads and ideas.
China made the virus, with US funding and US/UK guidance. Just because the CIA and CNN can’t figure it out does not mean the comedians on late night haven’t already pointed out the obvious.
We also know that other pandemics, far more infectious and far more lethal, did not merit a lock down. This was about covering their rear ends and gaining political power in the same foul breath.
Covid might lead citizenry to “war” against their own corrupt governments, but covid won’t lead to a military conflict. I’m surprised Tom doesn’t see this as obvious — again, the comedians of late night figured it out long ago.
James,
I think you missed my article on Jon Stewart, Agent of Davos.
So, please, really, give it a rest… It’s very clear that’s what the plan is now…. AUKUS, etc.
https://tomluongo.me/2021/06/18/john-stewart-does-davos/
Tom, no one thought Stewart was making a revelation. People were shocked that a mouth piece of the left was actually admitting the stunningly obvious. It was an admission that the propaganda had failed, that even the dumbest member of the public knew Wuhan created Covid.
Your hatred of Stewart (while understandable) is blinding you to the bigger picture. No one cares if Stewart speaks for Davos. The surprise was CBS admitting the official lies were not believable.
Anyway, what are you worried about a war for? Who would follow SecDef Austin into a donut shop never mind war? Who still trusts Milley to follow the chain of command?
And who, pray tell, is dumb enough to think Biden could manage a war even if his ice cream machine were threatened?
Everyone knows covid was a joint effort by China and the USA. The wuhan bat lady got her funding and her ideas from Fauci and UNC and Oxford.
China can’t afford to go to war against its primary customer; they are too dependent on exports. The USA can’t go to war because the military is run by feable minded wokesters and a scared little dementia patient.
And both populations know that Washington and Beijing are full of ^&)$. There are as many protests in China now as in the USA.
Dont let your *LOVE* of Jon Stewart cloud your vision of the bigger picture
James,
I think you misread that Stewart thing completely. CBS didn’t admit anything. Colbert was blind-sided by his rant. None of these people in charge would manage this war between the U.S. and China… the war is the fail-safe for when the angry republicans come back into power.
It’s called a poison pill, and it’s a very common strategy employed by one administration to leave the next in a bind to do exactly what they want done.
So, your ‘hatred’ of these people blinds you to the way they actually operate and it leaves you writing walls of text to justify it.
COVID was not a U.S/China project. COVID was a Davos project to destroy the current world.
Tom,
Reality TV (including the talk shows) is far more scripted than the audience is led to believe. And its pre-recorded. All the late night shows are recorded earlier in the evening if not late afternoon. CBS could have edited the entire Stewart segment out if they wanted to.
You write a lot of really good commentary, which is why I read your posts. But when it comes to Davos sometimes you sound like Howard Dean frothing at the mouth. Davos put their pants on one leg at a time and their farts stink like everyone else; they are not all powerful. Take a few deep breaths
Buddy, you are 100% wrong about everything. As Tom politely said, give it a rest.
Jasper, all the late night shows are filmed in late afternoon / early evening. You obviously don’t know a thing about TV if you believe they are filming at 11:30 pm.
That means CBS had plenty of time to edit the show, and reduce or eliminate Stewart’s talk.
If you know anything about those shows, they film about a 25 minute interview, and edit for the best 8-10 minutes to actually air. Even the monologue at the beginning is edited. They make sure to have lots of camera angle changes– it makes it easy to splice what they want / don’t want.
And they are all actors. Colbert wasn’t surprised. It was rehearsed before hand. Even Paris Hilton’s reality show was scripted. You have to be REALLY stupid to believe the crap on TV is done off the cuff, yet night after night always wraps up neatly and on time when the show ends. Maybe Tom’s audience is not as smart as I thought?
And the point, before Tom went rabid about Stewart, is that every idiot on the planet had already figured out that Covid came from Wuhan and Fauci funded it.
There won’t be a war, no matter how much frothing Tom or you do. Its not in China’s interest. Its not in the US interest. And no one really gives a shit what Davos thinks anymore.
Spoiler alert to Jasper, but WWE wrestling isn’t real either.
Almost everything on TV is scripted. That’s why its called entertainment. Even the news is tainted to fit the narrative the network wants, you rarely (if ever) get both sides of the story.
Colbert’s ratings were in the tank (actually all TV viewing is down, Colbert’s ratings are down more because he is more political). Tom’s favorite comedian was there to bump Colbert’s ratings. Quick Jon, say something controversial so it goes viral on twitter and instgram!!! Ratings bump, mission accomplished.
Late night talk shows are a 30-45 minute infomercial sponsored by movie, tv, book and record publishers. The stars show up for the late afternoon taping, they talk for 20-25 minutes, and the show edits each interview down to 8-10 minutes. Two or three edited interviews, plus a monologue filler — and the public is lining up to buy tickets, books, records.
Its all scripted and heavily edited to help sell the movie / tv / book / record. If the late show doesn’t promote movies, the studios withhold guests. Simple as that
You forgot to remind yourself America is in fee fall, the only real problem is America itself.
“The horror, the horror.”
A hundred million guns are loaded and the crazy lady at the back screams, “everyone attack.”
And it all turns into a ball room blitz, ballroom blitz.
2022 is the year America history came to an end.
The Wuhan institute of virology is a private institution, meaning the people who pay for the research are directly responsible for the research, not the government which is indirectly responsible through regulations, but not directly responsible by calling the shots.
If COVID 19 was engineered in Wuhan, it was done with the money and on the orders of people like EcoHealth Alliance and whoever they are a front for, not the Chinese government. Depending on who was tasked with what and who was working at the lab, whoever made covid might not even be chinese, they very well could have been a foreign national working in the lab. This all stinks of sleeper cell type activity.
Soros is throwing the same temper tantrums in China that he pulled when Russia kicked him and his terrorist organizations out… he is trying to cut off access to international investment.
Putin sent soldiers around and forcibly closed all of Soros’ NGO groups that were officially promoting democracy or socialism or economic blah blah blah — but were really just funding terrorism. Putin seized assets, confiscated records and used those records to track down NGO support within Russia. Putin was not subtle in telling Swiss and UK banks that Soros would be killed on the runway if he ever visited Russia again. Russia used its influence to thwart Soros in former Soviet countries too.
In addition to persuading investors to avoid Russia, Soros ordered his little minion Obama to launch a coup in Ukraine. NATO armies in Russia’s soft under belly (and only warm water port) would put Putin in his place.
Putin is former KGB, and knows Soros all too well. Russia’s military also knows the importance of Svetespol. Obama is a foreign policy moron, and his staffers even worse.
Now China is faced with the same meddling from Soros. China isn’t beating around the bush like Putin did — China officially labeled Soros a terrorist. Since NGOs are officially not allowed in China, they are unofficially being closed down by force. The Chinese seem not to have bothered telling Soros that any trip to China will be his last.
Will Soros order Biden to stage a coup somewhere? Hong Kong? Tibet? Uygers? How does Biden reconcile orders from his US sponsor without running afoul of the bribes he and Hunter got from Beijing?
Evergrande is the first of many “victims” of the Chinese youth policy of laying flat. Tom failed to mention all the Evergrande’s here in the USA that are meeting the great relaxation — the US equivalent of China’s laying flat.
Basically it goes like this: I, a young Chinese person, will work my tail off to better my own life. I will work to benefit my future/current spouse. I will work to benefit my family (parents, siblings).
I will not work to pay off someone else’s debts. I don’t care about capitalism or marxism or any other “ism” that makes me a debt slave. Period. Amen. End of discussion. Xi and Biden can both go shove it.
A bunch of 80+ year olds in Washington are talking about pissing away $3.5 trillion. Its fraud to claim they are going to repay any part of it. Its a long shot any of the “leadership” will still be alive as the debt comes due. Heck, there is zero indication they will pay the $22 trillion (on balance sheet) they already wasted.
Its one thing to ask young people to work for a better life. Its one thing to ask young people to pay their OWN debts. But any system of government in which the old waste trillions and then expect someone else to repay it — that is a system set for failure.
Newsflash to the baby boomers: you didn’t fund social security, and it will be cut off. You will cry. You will pout. You will vote for every geriatric loser you can prop up to run. It will be canceled anyway. Go ahead and hold your breath, deadbeats.
Many young people will do what they can to support their own parents, probably in exchange for child care (grandma and grandpa watch the grandkids while kids are at work). But the free loading socialist pyramid scheme known as social security is on exactly the same footing as Evergrande in China. And Uncle Sam doesn’t have the resources to bail it out.
I’m not sure you understand well enough the “lay” flat phenomen we read about in our ‘western’ press. Is it possible it’s eye candy? Even Chinese are unaware of this phenomenon, but of course with the great firewall they’re being effectively controlled. Not like us here with freedom of the press and whatnot….
It would be interesting to know how the evergrande anti-bailout is being viewed in those Asian countries who are the future of commodity-oriented manufacturing in that hemisphere, feeding a growing Chinese middle class in the next fifteen or twenty years.. it’s an insanely huge stupidly diversified company, got a soccer team and the biggest stadium, soft drinks, groceries, etc. But apparently Chinese parents buy unbuilt apartments for their kids to occupy in the distant future, so at least some of this story may look appreciably different from a Chinese perspective than GAAP, certainly. Economic planners in the PRC often hold military rank, and aren’t bashful about expressing their ideas using the adversarial language of the battlefield, including the counterparties being enemies instead of competitors.Or even customers. Much the same was said widely about the Japanese in the second Reagan administration, and they ultimately nose-planted and still have the scab. Wired a lot of golf courses for Japanese customers in central Texas, all belong to different people now.
Is this whipping boy/conglomerate being paraded as reliability-signalling for the benefit of those future trading partners in Asia? Xi is not a new broom. This is a clear directional signal to somebody, and unless Fantasia and the other big Chinese property management companies are clean, they got the message long before. It’s strange to go for the biggest company right off the bat just to impress the smaller fry that are domestic enough to be vunerable to the CCP anyway. So maybe this is the Chinese telling the nice neighbors that they don’t have to worry about the misbehaving dog,we locked him up, please come to our lunar New Year party. I don’t think the Chinese have accumulated such a stash of gold to look at it. And they’ve been encouraging their citizens to aquire privately held gold for some twenty years, and the citizens listened. It’s at least a possibility that a digital gold club could be started for worthy trade partners in Asia, leaving the secondary markets for those with weak currencies and less attractive merchandise. The Chinese could choose their privileged overseer countries that would be intermediaries with the Third world. BRI is like a spear penetrating markets deemed important and worthwhile. Maybe they want to let everyone know how firm the hand holding the spear is. Notice no spear pointed our way. Well, some pesky submarines and missiles… with 45 percent of Taiwanese favouring Anschluss with the big part, might not be a shot fired that day.
Or not, there is at least transitory inflation in the quantity of undocumented military hardware available for resale in the Tora Bora.
How can Powell help China dedollarize?
Devaluing the Euro seems like the dim-witted short cut that a lawyer like Lagarde would try. Its the easy way out, or so she thinks.
I doubt the Russians are going to accept EU-drachma for Nord Stream II gas. At the very least, the Russians will insist on gold or German machinery or maybe a nice semiconductor wafer machine from the Dutch? Washington DC will love that, but Germany needs the energy or the whole EU collapses.
OPEC (aka Saudis and Russia) already know this game from the 1970s. If the USDollar devalues, the price of oil will go up to compensate. US labor is already onto the scam too.
Bernanke thinks he thought of the printing press, and he is arrogant enough to believe his own BS. Massive debtors printing currency instead of paying their debts is not a new concept — lenders already know this scam.
Evergrande also has an EV unit. So if this EV unit is a victim of the total Evergrande failure, then could this Evergrande collapse give Tesla a bigger opening in China or will China nationalize the Evergrande EV market too. Audi also has a division in China which theoretically contributes to its total profitability and thus to the EU financially. The dominos yet to fall from Evergrande demise are vast. Thanks to Nixon and Kissinger and all their hard work.
China’s housing affordability issue is beginning to be resolved. A return to state control. Something needed to be done before it spiralled out of control. But whether it can be controlled, we shall see. Maybe it’s the prick for the everything bubble, which is also coming as we know. Nobody wants war but it will be a very close call in the best case scenario.
Agreed Ed, and this is a good point about ‘affordability’ and strengthens my argument here that this is an operation not an accident…
The US – Aussie deal is to transfer the technology to China.
Interesting. Some say the afghan weapons were a gift as well. But substantiation brings belief. Reference and be believed
Tom normally writes some interesting stuff, but this thread has gone completely tin foil hat with Davos conspiracy theories
I don’t believe one word you say, buddy. Not one word about any subject.
Honestly that’s quite rich coming from you, Mr. Bond. Both you and Tom are excellent story tellers. But only Tom actually sticks to the known knowns and paints a plausible picture. Mr Bond on the other hand is fiction writing only without basis ina mutually experienced reality. Entertaining, yes. Keep closer to reality yourself if you’re able. And yes,Tom is sometimes wrong as he himself admits. It’s the nature of the profession. Absolutely nobody can do such work and be correct all the time. But his intelligence and ability are what attract others. He does an excellent job. I believe Davis is just the rich and powerful trying to subjugate the weak and unintelligent for personal gain. And clean up the messy world, if only so they don’t see trash floating around from their mega yachts.
Tom paints the world into a viewable picture that is intriguing and insightful. China and Russia I comprehend. I worked for a Chinese company so get their point of view. I even read Putin’s master thesis to get a better understanding of him. I have never been interested in Europe as there is some real convoluted history and too many players to follow (always skip that section in the Economist). Which brings me to the United States. I am perplexed why this Demented Dem leadership is purposely trying to torpedo the USS USA. It is blatant, consistent and continuous. Are they trying to be so opposite from Trump that they choose to self-destruct this entire country? Or are they financially padding their offshore Caribbean Bank accounts? I cannot believe that Davos is controlling them. To me they are just a bunch of Willy Wonka children with golden tickets.
I new to this site, so I’m stunningly igonorant of much of this- I’m not a financial guy. I’ve been reading anti-vaxx sites for the past year because I was against the lockdowns from the start. I started going to investment sites lately because I came to realize that COVID-19 is a hoax perpetuated by world governments for the following reasons: 1) The global economy is on the verge of collapse due to massive deficits, massive printing of money and now negative interest rates (governments are actually trying to save money by killing us off!); 2) CO2 Hysteria; 3) Eugenicists like Bill Gates who use CO2 hysteria to justify a massive CULL of the population. I’m following this site now because Tom knows Davos is behind this. Martin Armstrong also seems to have known from the beginning that COVID-19 is a hoax (by Gates/Schwab/Soros/Davos and the politicians) although he believes there really is a virus.
After a lot of research, I don’t believe there’s a virus at all. This article/video below says there were no excess deaths in the UK (except for a spike of deaths in nursing homes that were due to euthansia of the elderly- these deaths were then blamed on COVID-19 to cover them up). There were also another spike of deaths in 2021, but only after the vaccine roll-out! The so-called “delta” cases are actually due to the vaccines, NOT a “virus”. The mainstream media is FAKING everything so you can’t trust the news at all about COVID “cases” and “deaths”.
https://markcrispinmiller.substack.com/p/when-will-people-wake-up-funeral
https://rumble.com/vm936v-whistleblower-nurse-destroys-delta-narrative-vaccinated-patients-fill-hospt.html
It’s been widely reported in the alternative media that Graphene Oxide (GO) is in all of the COVID vaccines. A group of Spanish researchers blame the adverse effects of the vaccines on the GO coupled with 5G EMF, which increases the toxicity of GO. Less widely reported is that these researchers also blame COVID-19 itself on deliberate GO poisoning in the environment (chemtrails, industrial waste and in flu shots since 2019)! Yes, it sounds unbelievable but to this day, there’s ZERO proof the SARS-COV-2 virus exists outside of a computer model!
https://everydayconcerned.net/2021/07/05/shocking-news-spanish-researchers-find-98-99-of-pfizer-vaccine-vial-is-comprised-of-toxic-blood-clotting-nano-graphene-oxide-also-found-in-flu-vaccines-now-seen-to-be-true-cause-of-covid-19/
https://rumble.com/vkgdq7-deadly-shots-former-pfizer-employee-confirms-poison-in-covid-vaccine.html
https://www.orwell.city/p/archivo.html
My own guess is the Gain-of-Function research in Wuhan is real and scientists really did spend decades, trying to develop a killer virus to depopulate the world. But they failed, so perhaps GO poisoning was their plan B.
https://andrewkaufmanmd.com/wp-content/uploads/2021/02/Statement-of-Virus-Isolation-SOVI-by-Morell-Cowan-and-Kaufman.pdf
You are right on about Hong Kong being seen as another attempt at a Western backed Color Revolution:
John Mearsheimer – University of Chicago (realist foreign policy)
https://www.youtube.com/watch?v=JrMiSQAGOS4&t=802s
The real shame of it is that Western Intelligence agencies don’t give a whit for the people living in Hong Kong. If the operation fails, the people of Hong Kong pay the price or the Ukraine loses Crimea. But it is a “freebie” throw of the dice for the United States.
Also, if you have not noticed, the “coup” in Myanmar has nothing to do with Biden’s battle between Democracy and Authoritarianism but with the United States messing with China’s supply of rare earth elements:
Rare Earths in Myanmar: Unobtanium?
“Myanmar is the world’s third-largest source of mined rare earths.”
https://thediplomat.com/2021/06/rare-earths-in-myanmar-unobtanium/
So the coup in Myanmar was a “twofer” for China. It secures the rare earth supply and ejects the West (and its Intel backed NGOs) from its border areas. The same as Russia is doing in Belarus and Ukraine.
If the dollar will strengthen, will gold weaken?
Yes and no. Rallies get sold during moments of dollar liquidity stress while people buy for safe haven reasons
I need an economic lesson. How does the following math produce a profit.
Someone pays me $5 to make a gal of ice cream, and then tries to sell it back to me for $6.
It seems to me that the value of all inventory will always exceed the available money in the system to purchase it. It looks to me the above math will need an infinite amount of debt to make it work. Moreover, since the above math can never make a profit, said debt can never be paid back. Furthermore, I don’t think it matters if the currency lent is fiat or gold.
Looks like a game of musical chairs, and as each loan is called (time limit) a chair is pulled (bankruptcy), and the wealth moves to the top players.
I understand that making a profit is the line between freedom and slavery, but the profit margin appears to create a deficit in a closed system that can only work if a infinite amount of debt is injected into it..