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Thread: China could be turning to a stealth weapon in its trade war with Trump

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    Registered User LAGC's Avatar

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    China could be turning to a stealth weapon in its trade war with Trump

    The Trump administration has threatened to slap tariffs on nearly all Chinese imports to the US, a move Beijing isn't able to match in duties of its own. Meanwhile, the yuan has weakened to fresh lows, raising questions about whether China could counter trade threats with currency manipulation.

    The yuan hit its lowest level of the year on Wednesday at 6.6105 versus the dollar. It has plummeted 6% versus the dollar since March, when the Trump administration announced plans to penalize China for what officials found to be unfair trade practices. A weaker currency typically boosts exports.
    http://markets.businessinsider.com/c...8-6-1027323154

    Looks like the Chicoms are about to flood us with a bunch of cheap, currency-devalued goods to undermine American industry...
    "That tyranny has all the vices both of democracy and oligarchy is evident. As of oligarchy so of tyranny, the end is wealth; (for by wealth only can the tyrant maintain either his guard or his luxury). Both mistrust the people, and therefore deprive them of their arms." -- Aristotle, Book V, 350 B.C.E

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    They survive off us. They have no internal trade because they're a totalitarian society, and like cancer, must have a host to feed off of. They're bluffing Trump, and are in far worse shape than we are right now as far as the overall economy - they carry a huge debt level and their exports have fallen drastically, they have no one with the buying power of the good old USA to sell their crap to so they will be hoist by their own petard shortly. Also, last I heard there was 1000 riots a month (or was that week?) staged by pissed off Chinese workers where the people's liberation army had to be called out to put down, I wonder why we never hear about those in the news? China is a facade of prosperity but with nuclear weapons and a several million man army waiting in the wings.

    About the only real (economic) bullets in their gun is to sell t bills en mass and/or declare a gold standard yuan. If they sell t bills they crash everyone holding them, wich includes every country on earth. If they declare a gold yuan they trash every fiat currency on earth. If they go gold, expect everyone else who holds any to follow suit or utter chaos will shortly grip the globe.

    That being said, the warning lights are flashing according to some top market watchers regardless of what the dragon does or doesn't do. Right now, silver is being beaten as is gold, meaning paper silver and paper gold are flooding comex, dropping and holding prices artificially. Once the people stop accepting paper gold and silver, literal gold and silver will skyrocket. Right now, inflation in Venezuela (that modern socialist paradise with one of if not the largest oil reserve on the planet) with an ounce of silver you can purchase a 6 month supply of food. Their inflation is Zimbabwe/Wiemar level. This can happen anywhere a fiat currency is in use because you can inflate paper and bits on a ledger, but you can't inflate real silver or gold. Also, every fiat currency in history has eventually failed, while gold and silver has always had intrinsic value over that same span of history.

    Also also, the fed is doubling down on qt, quantitative tightening to the tune of 100 billion per month. Actually, it's more than 100 billion per month. Anyway, after the collapse of 09, the fed and its cartel persuaded congress to bail them out for their gambling losses to the tune of our grandkids wealth. They called this crime quantitative easing; where they flooded the market with cheap dollars - cheap in the sense that banks and businesses could borow $ at near zero or even zero interest, wich "stimulated" the dead cat we have for an economy into the zombie cat it is today. This qe inflated $ to astronomical proportions, flooding the world with $. With the huge debt congress agreed to pay the for their own losses, the fed bought up all sorts of things, from home loans floated in blocks by banks to entire industries and had these collateral on their books. After buying up pretty much the entire US market they turned to t bills and bought those since they didn't really have anything else to do with the debt congress agreed to pay them for their gambling losses, and the bonds bubble will be the straw that broke the bank's back.

    Anyway, what is happening is the fed is selling over 100 billion of whatever off their balance sheet, to include t bills, reducing the total amount of US currency in circulation by the same amount because every dollar represents not wealth but a debt to the fed. meanwhile, the fed is increasing rates, and has said they will increase rates even more next year. This is likely going to result in the absolute worst thing they can do to Americans they ever have, including the great depression - wich they also caused.

    Listen to our great founder Thomas Jefferson closely;
    "I believe that banking institutions are more dangerous to our liberties than standing armies," Jefferson wrote. " If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."

    "The issuing power of currency shall be taken from the banks and restored to the people, to whom it properly belongs."






    My guess is the dow will drop from here on out, the peak has been reached, and the end game of the fed is upon us and our children.
    Last edited by 5.56NATO; 06-28-2018 at 05:10 PM.
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    I thought this to be of interest to the subject;

    "If the central banks were to follow through on their recent promises to tighten, these markets would come under extreme pressure and the entire pension system globally would fail. Thus, I expect them to continue to monetize, which will lead to some form of hyperinflation in the future.

    Therefore, despite the recent weakness in gold and silver prices due to relentless selling in the paper markets, I remain resolute in my belief in dramatically higher prices in the not-too-distant future. Because of the continual suppression in the paper markets, it is impossible to put an exact date on when gold and silver prices will explode to the upside. However, the middle ground no longer exists. When the current price suppression fails, due most probably to an unanticipated financial event, gold and silver prices will explode to levels most people can’t even imagine today.”"
    https://kingworldnews.com/everything...lobal-markets/
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    On what happened during the collapse of 07/09; the fed banksters threatened congress that there'd be martial law declared if congress failed to bail them out for their gambling losses.... and congress folded. Meaning congress promised to pay them back their losses and agreed to borrow more with interest. So what this means in the end, we gave the fed the federal reserve notes it used to basically buy America aka something for nothing - nothing here meaning dollars are simply ink on paper with wich they bought up literal America. If you carry a mortgage, the fed likely actually owns your home, if you're paying off a car, the fed likely owns that too. A good feeling.

    Here's a great piece on what took place;
    "After the original $700 billion bailout, the ongoing bailout was kept very secret because Chairman Ben Bernanke, argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort. In fact, $7.7 trillion of the secret emergency lending was only disclosed to the public after Congress forced a one-time audit of the Federal Reserve in November of 2011. After the audit the public found out the bailout was in trillions not billions; and that there were no requirements attached to the bailout money - the banks could use it for any purpose."
    https://www.forbes.com/sites/mikecol.../#19cd11d12d83

    And on the current stock market troubles;
    "I’ve waited patiently through the first half of the year to talk in depth about how my January prediction faired because I felt we need many months in order to discern whether a trend has really been broken. You can see now how the steep rise in stocks at the end of 2017 turned out to be nothing but irrational exuberance that led to disaster (that, too, as I said it would prove to be at the time), which fell away as quickly as it built because it was void of substance.

    You can also see that the problems that global stock markets are now experiencing did not start with the recent imposition of trade tariffs either (as the media is largely saying because they have no concept of the underlying fundamentals), though a trade war was practically assured to play a major compounding role, given President Trump’s two years of threatening a trade war (first as candidate Trump then as President Trump).

    No, the event that triggered the demise of all of the world’s stock markets was exactly the one I laid out early last year. You can plainly see that the drop in all markets began the day the Federal Reserve increased its initially lax quantitative tightening program by 100%, which was at the end of January. You may also recall my writing last year that I did not think the Fed’s quantitative tightening, which was set to begin in the fall, would be enough to create much shock in the fall; but that, when the January increase came, we’d feel some real bounces in the road.

    Take another look at the graph above, and you’ll also see where an even steeper break downward begins for major bank stocks — right at the end of April when the Fed implemented its next promised increase in the rate at which it is unwinding its balance sheet.

    What is really happening is that, as the Fed is letting the air out of all the tires, all the stock markets in the world — since the dollar is a global currency — are becoming less stable. They are becoming less stable because it was always only central bank free-and-easy money that supported an artificial wealth effect in stocks and bonds. Therefore, as more air goes out of the fake recovery, all markets are less able to withstand the shocks in the road that hit them. The fail-safe shock absorber that “the Fed has your back” is gone.

    It has been my central thesis since beginning this blog that the Fed’s recovery was a mirage that would end as soon as central-bank artificial life support is finally removed. Each time they have pulled back, we have had problems — not always as bad as I predicted along the way, but always severe and always exactly on schedule with their pullbacks. Now the Fed’s life support is being completely removed, but we do still derive some benefit from the artificial support of most of the world’s other central banks.

    There was absolutely no chance that the Fed’s recovery, which did nothing to correct the serious debt-based flaws in our economy (but only exacerbated them), would prove sustainable. The idea that that you can build enduring national wealth out of the fake wealth effect from mountains of debt is laughable fantasy."

    https://www.zerohedge.com/news/2018-...s-stock-market






    If you ever wondered how the fed can infuse trillions of $ into circulation (as they did with the bailout) and not have a loaf of bread rise to $50 at your local Safeway, look at it this way;
    The companies the fed bailed out took those trillions and hoarded them, you and I never saw them, neither did the rest of the world - unless it was a major foreign corporation. A lot of those companies went on a stock buyback spree, wich artificially increases the value of their stock because they're buying their own stock with opm - other people's money and with less stock on the market the value just goes up - supply and demand you know.
    Last edited by 5.56NATO; 07-01-2018 at 02:29 PM.
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    Egon von Greyerz continues: “Many stock markets around the world are at all time highs. But there is no fear and no serious selling. Any slight decline is treated as a buying opportunity. The S&P is up 4x since 2009 but that does not make investors nervous. That markets have been fueled by dangerous and unsustainable credit expansion does not concern investors either. Not even the fact that global debt has doubled since 2006. But change starts in the periphery where very few are looking. Look at China, where the Shanghai composite is down 22% in 2018. And look at Brazil, where the Bovespa is off 17% so far this year and Turkey, which has lost 20%.
    https://kingworldnews.com/greyerz-th...lehman-moment/
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    Goldman: "We Met With Chinese Investors And The Tone Remains Very Negative"
    One month ago, when looking at the surprising spike in Chinese corporate bond defaults - which yesterday added one more company to the list after Wintime Energy missed a 1.6bn yuan bond repayment in principal and interest - we asked if "it is time to start worrying about China's debt default avalanche."
    https://www.zerohedge.com/news/2018-...-very-negative
    if the chicom banks borrowed short and lent long they will crash and burn when their borrowers default, then the banks default back up the line
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    Who knew fdr was cause of China becoming the totalitarian state it is today, via the power of gold and silver?



    President Franklin D. Roosevelt: Architect of Monetary Madness and a U.S. Debt Default
    During his first term, FDR delivered his silver “plan.” It was wrapped in the guise of doing something to help U.S. silver producers and, of course, the Chinese.

    Using the authority granted by the Thomas Amendment of 1933 and the Silver Purchase Act of 1934, the Roosevelt Administration bought silver. This, in addition to bullish rumors about U.S. silver policies, helped push the price of silver up by 128% (calculated as an annual average) in the 1932-35 period.

    Bizarre arguments contributed mightily to the agitation for high silver prices. One centered on the fact that China was on the silver standard. Silver interests asserted that higher silver prices — which would bring with them an appreciation of the yuan against the U.S. dollar — would benefit the Chinese by increasing their purchasing power.

    As a special committee of the U.S. Senate reported in 1932: “silver is the measure of their wealth and purchasing power; it serves as a reserve, their bank account. This is wealth that enables such peoples to purchase our exports.” But, things didn’t work as Washington advertised. It worked as “planned.” As the dollar price of silver shot up, the yuan appreciated against the dollar. In consequence, China was thrown into the jaws of the Great Depression. In the 1932-34 period, China’s gross domestic product fell by 26% and wholesale prices in the capital city, Nanjing, fell by 20%.

    In an attempt to secure relief from the economic hardships imposed by U.S. silver policies, China sought modifications in the U.S. Treasury’s silver-purchase program. But, its pleas fell on deaf ears. After many evasive replies, the Roosevelt Administration finally indicated on October 12th, 1934 that it was merely carrying out a policy mandated by the U.S. Congress. Realizing that all hope was lost, China was forced to effectively abandon the silver standard on October 14th, 1934, though an official statement was postponed until November 3rd, 1935. This spelled the beginning of the end for Chiang Kai-shek’s Nationalist government. FDR’s “plan” worked like a charm — Chinese monetary chaos ensued. This gave the communists an opening that they exploited — one that contributed mightily to their overthrow of the Nationalists.

    https://www.zerohedge.com/news/2018-...s-debt-default
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    As China Suffers Its Biggest Bankruptcy Of 2018, The PBOC Finally Panics
    Fast forward to July when Wintime became the largest bankruptcy in China (so far) in 2018, when it defaulted on 11.4 billion yuan of debt after it failed to pay a local bond this month.
    That said, it will hardly be the last because as we showed recently, through the end of May, there had already been no less than 20 corporate defaults, involving more than 17 billion yuan, a shockingly high number for a country which until recently had never seen a single corporate bankruptcy, and a number which prompted not only Chinese banks to pull back from lending to other firms that use the funds to buy bonds, but also last night's PBOC easing response.
    https://www.zerohedge.com/news/2018-...finally-panics
    the reason china doesnt have a larger prison system than the USA is because they kill people for just about anything, hence no need for more prisons, expect chicom ceos and bank pres to be culled soon as shtf avalanche gets started

    Central Banks Are Using The Trade War To Hide Their Direct Influence On Stocks
    Federal Reserve Cutting Balance Sheet (And Hiding The Effects)
    The Fed has been the single most important trigger for stock markets. Period. As noted above, it was the Fed that created the historic bull market rally after the derivatives collapse. Jerome Powell, the current chairman of the Fed, stated back in 2012 that this was the case, and also made statements on what would happen if the Fed ever raised interest rates and cut asset purchases, ending the central bank’s “short volatility position.”
    What did Powell predict in 2012? Essentially, a stock market crash. And, yet, as the new Fed chair he is implementing the exact measures he warned about back in 2012.
    With every new balance sheet cut and rate hike, the Dow Jones in particular tends to lose 1,000 points or more. The damages have been mitigated by continued stock buybacks from corporations as well as smaller asset purchases by the Fed after the fact, but as already mentioned, the buyback stop gap will be ending shortly.

    https://www.zerohedge.com/news/2018-...fluence-stocks
    "And how we burned in the camps later thinking, what would things have been like, if every security operative, when he went out at night to make an arrest, had been uncertain, whether he would return alive and had to say good-bye to his family?"

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    China might be walking around with their chest puffed out bragging about how they are sticking it to Trump, but the reality is that they are starving while bragging. It won't be too long before the Trump policy starts working, and China backs off.

    Unfortunately our freedom hating media along with the America hating democrats still refuse to face reality. They will rip Trump no matter how good our economy is doing, or how many Americans are now employed.

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