Is Helicopter Money The Only Option For China?
If you're a Chinese mutual fund, Xi Jinping would prefer you didn't sell stocks right now. Or at least not on net.
Market sentiment is poor, there's another property meltdown brewing and a linchpin of China's shadow banking complex may be imploding. So, do Xi a favor: Don't sell more A-shares than you buy.
That was the "window guidance" to some large investment firms on Wednesday, according to sources who inexplicably risked life and limb to tell Bloomberg about the instructions, which were "r
You’ve had your finger on the pulse, while most of the pundits have listened to the delirious musings of the patient
Or the other tried and true solution to a reeling economy and restive population – a military action.
There are good arguments made that WWII rather than the New Deal is what finally pulled us out of the Great Depression.
I’ve never thought anything else and my dad was there, on Guam. He was on the first Navy team taking pictures in Hiroshima after the bomb. After the war the US took off without the expected inflation.
Don’t give them any ideas, Derek.
Dave – they don’t need my help. Flawed as it is, search for the Kyle Bass interview at the Hudson Institute. Just listen to the first 20 minutes or so where he lays out his argument that preparations for this option are already well underway.
His track record is far from perfect when it comes to China (he has long been a perma-bear), but it is worth a listen.
Thx, Derek. I appreciate the referral. Unfortunately, he seemed to me to be an alarmist in the interview. I had difficulty in getting past Bass’ presumptuousness, political slant, and posturing. I would probably have a hard time trusting anything this guy would say. Interviewer was nothing but a shill.
I believe the Chinese would lose their entire navy and a good chunk of their air force if they challenged the U.S., even as we’re just rebuilding a stronger presence in western pacific.
The U.S. posture in the world has changed with the Russia and Ukraine war. Russia caught everyone with their pants down. In response, and to support Ukraine, NATO countries are expanding production of weapons and defense capacity. That includes the U.S. as well. And as China ramps up their capacity, the US will respond in kind.
Your degree of confidence is not widely held by the US military. But it is shared by Kyle Bass.
The military’s job when facing threats from China or anyone else is to exercise caution. No one is saying China cannot hurt the US military or mainland. I believe China has the capacity to do both. But I sincerely believe China would experience unspeakable suffering if they messed with the US, especially if they came anywhere near the Philippines, Japan, South Korea, US military and naval installations, Hawaii, US territories, or the US mainland. And let’s not forget New Zealand and Australia. In my humble opinion, China’s great army-navy would not stand beyond a month or two. With the exception of small near-shore ships, I believe the greater bulk of the Chinese navy would be completely destroyed.
The Chinese communist mindset is to say all kinds of things and play games to seek political advantage. I call BS. When the rubber hits the road, the US military does not abide.
Derek –
Just to be clear, I agree with you that war with China is a risk. Walt agrees too. Read his HR Weekly+ note (see the links across the top of the page), published on Friday.
My first reaction to the current state of affairs in China is that Xi is floundering. His first impulse seems to be fixing the country’s difficulties by the use of force. The guy is twisted. He seems to lacks imagination. And it seems he’s potentially very destructive.
Note his management style in what he did to Hu Jintao back in 2012. He did not put Hu out of his misery. He retired Hu, suddenly and awkwardly, in front of the whole world. This action bears no comparison to making war. It’s just my guess that a guy like this can trigger a war.
Right now Xi has the appearance of someone who is managing more variables than his personal capacity permits. Frankly, he doesn’t seem to fully understand what he’s doing when it comes to the economy. He cannot force his people to spend their money and get the wheels turning in China’s economy. But, to Walt’s point in the article noted above, he might want to start a war.
Or…instead of committing trillions to further destroy humanity and the planet we instead put the investment into saving it…and economic benefits would be similar…oh to dream…
Sure…I’ve also come to see the “great New deal vs WWII debate” in a both / and versus either / or context as they both involved huge infrastructure investments… im not sure it worked out so great for the UK though…
Interesting to see the yields on longer duration US Treasuries rising…10 yr USTreasury around 4.25%. Are Russia and China selling some of their US Treasuries to prop up their flailing currencies ??
Never mind China/Russia – the US Treasury is selling a heck of a lot of Treasury notes/bonds. About $270BN in August, rising monthly to $350BN/mo by next year.