King has lost his Crown

Pubblicato il 28 Febbraio 2020 da Veronica Baker

Disaster and disgrace
The king has lost his crown
Suddenly
He’s clumsy like a clown
The world is upside down
The king has lost his crown

ABBA – The king has lost his crown


“China owns about $1.1 trillion in U.S. debt, or a bit more than the amount Japan owns.

Whether you’re an American retiree or a Chinese bank, American debt is considered a sound investment.

The Chinese yuan, like the currencies of many nations, is tied to the U.S. dollar.”1

“China dumping Treasuries could panic global markets without hurting the US.

Such a fire sale would be aimed at hurting the value of US Treasuries, thereby causing yields to spike.

That would be a big deal because the 10-year Treasury rate serves as the benchmark for other forms of credit.” 2


4
Interest rates spike, the dollar drops, the U.S. economy goes into recession and the next president renegotiates…

“What if there was an economic or political assassin’s mace ?
What if China decided to wage part of the trade war with an unexpected attack with or on money ?

Consider the trade conflict.
The initial phase, phase one, is a tit-for-tat tariff.

The President institutes tariffs, China retaliates in kind.
Phase two, the President ups the tariffs and escalates the conflict by banning businesses from doing business with China.

The Chinese pull out a ‘sha shou jian’ and dump some or all the $1.11 trillion of U.S. treasuries they hold.

Interest rates spike, the dollar drops, the U.S. economy goes into recession and the next president renegotiates.

China holds $1.11 trillion of U.S. Treasury securities or about 5% of its GDP.
China has been selling Treasuries and a low rate environment allows for a higher price.

Sellers can control prices and supply and demand, consider when the semiconductor market was crushed by dumping and the corresponding crash in steel prices.”.3


King has lost his Crown
There is a domino effect…

There is a domino effect.

If China starts dumping U.S. bonds, the price of bonds declines, and other countries and holders of bonds are adversely affected.

Ireland holds about $262 billion of U.S. debt or roughly 79% of 2017 GDP.
The UK holds $341 billion, or about 13% of its GDP. Japan is the largest holder of Treasuries, with $1,12 trillion.

A big drop in bond prices would change their holdings.
Other countries might also sell bonds, triggering a bigger crisis.

A logical question would be ‘where would they go ?’.

It seems very unlikely that sellers of U.S. bonds with positive yields would park their proceeds in negative yield bonds and there is no parking spot for the full $6 trillion of U.S. debt held by foreign investors.3


“Oggi manca del tutto la circolazione del denaro.
Tutto il denaro stampato dalle banche centrali non entra (e non entrerà mai) in circolo nell’economia reale, ma è sempre allocato in posizioni statiche.

La finanza è statica, mentre l’economia è mobile.
La finanza non può mai essere scorrelata dall’andamento economico generale.

Se manca la circolazione del denaro, semplicemente l’economia muore.”.4


King has lost his Crown
La creazione di monopoli statali indebolisce la economia, fino a portarla al collasso finale…

“La creazione di monopoli statali indebolisce la economia, fino a portarla al collasso finale.

I sostenitori dei dazi doganali sostengono che servono a combattere le pratiche “sleali” da parte dei produttori stranieri.

In realtà i dazi non sono altro che un indicatore che conferma l’insostenibilità del differenziale di prezzo tra beni e servizi di origine statunitense (ed occidentale in generale) e di origine straniera (principalmente la concorrenza asiatico/cinese e russa).

Alla fine tutto questo causerà un deciso aumento dell’inflazione.
Soprattutto per i generi di prima necessità.

L’unica alternativa sarebbe un massiccio taglio alle spese governative.
Ma questo non potrà mai succedere.

Perchè ormai troppa gente è dipendente da un qualche tipo di sussidio da parte dei diversi governi occidentali.

Alla fine anche questo processo sarà insostenibile.
Esattamente quando l’inflazione raggiungerà la doppia cifra.
A questo punto le guerre commerciali si trasformeranno in guerre militari.

Giustificando in questo modo l’iper-inflazione conseguente e la confisca dei patrimoni personali.”5


Note



44


You cannot copy content of this page