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February 23, 2017, 09:06:00 AM |
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Some relevant points to make:
QE 4 is here / coming. Its defense spending. A lot of defense spending heightens tension and promotes conflict. The US & China has had to come to agreements stopping their jet pilots from flipping the bird at each other. That is how close they are flying to each other over the South China Sea area. Conflict is inevitable as economies decline as we have seen throughout history. Maybe we will only see economic or trade wars this time and not a military war - what landmass could US / China fight for? No one will buy the 'we need to protect freedom in X' anymore.
* The PBoC needs jobs and food in order to appease its population. It also needs to adjust its economy to a consumer driven market. Chinese debt has risen from 7trillion to 28 trillion in less than 10 years.
- it needs to keep its economy competitive (cheapish Yuan) - it needs to control food supply (South China Sea islands in large fishing catchment area, shipping lanes) - it is facing the 'impossible trinity' (cannot have open capital account, pegged currency, independent interest rates at same time for long).
* The US is in internal upheaval and is both beholden to, and master of the global economy.
- The Trump Administration looks to lean towards an alliance with Russia that would calm the Middle East & destroy Daesh. - The Obama Administration had pivoted towards China - The Intelligence Community (CIA) has many Cold Warriors who wish to re-ignite conflict with Russia. They have tried to destroy Trump ('Putin puppet'), taken out Flynn, and destroyed the Obama initiated Syrian peace by bombing Syrian soldiers during ceasefire. - The US Fed needs to raise rates in prep for another recession but this imports deflation and harms emerging markets, leading to either more currency wars or an economic panic (that could possibly be very bad as global debt is enormous). - Fed can only hope to raise before a recession hits. Otherwise we are in serious trouble, a financial ELE. - The globalists really need inflation (to reduce debt). The Chinese own a large amount of UST's, therefore inflation cheapens their UST assets. - The Trump Admin looks to be more isolationist & protectionist, forcing companies to bring jobs & cash back to America. - Globalism and free trade has destroyed the middle class (Trumps base) for the past few decades and enriched big corporations.
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