CHICKEN LITTLE IN CHINA……
Generally, investors at the top want to watch for signals. Using Data the IMF and the World Bank apply, that suggests a) the GNP numbers from China are a lie and the actual GNP is lower than China is reporting and b) the 300% annual DEBT to drive the economy so that the communist avoid a CHINA SPRING or a real revolution to their entirely failed economic model is and remains unsustainable and c) that the BAD DEBT is now around 100 trillion dollars in Asia nations which are NPL or Non Performing Loans which institutions and nations carry as lies on their balance sheets as ASSETS when they are truly LIABILITIES. This economic’s 101 has been the real cause or all global depressions, since before Rome, and the real cause of all world wars since before Rome.
What really brought Rome to a stop was a combination of Empire bad debt ( nonperforming loans ) rampant inflation, and the barbarian’s ( North Korea and Muslim Pakistan ) got the weapons of Rome ( atomic weapons ). The end was near when all three took place. Speaking economically and historically as economics in the end always lead politics.a
As a general rule ( which is not always 100% correct ) the rule is: that when central bankers come out and define that things are OK we have NO PROBLEMS they are in crises panic mode. Say Deutsch Bank VW and the FED when the crash was starting. Or Janet Yellin during Trump’s run having the entire Fed past present and future stating THERE IS NO GLOBAL BUBBLE LIKE TRUMP AND HILLARY BOTH REPORTED THERE WAS. Its all a super bubble as we have written to you about here.
So the facts are:
- China is a communist economic system that has failed.
- The super growth has resulted in SUPER CRASH since 2007.
- For ten years the economy GNP ( even the leadership of shame’s lie number ) has fallen and fallen and fallen and is still falling. Draw a flip chart line at 25% GNP and show it around 5.5% in 2017 and have a line go off the flip chart to the floor on the wall. Then ask if the students in the room appreciate that TREND?
- Next, the debt has risen higher than any nation in the world making Greece look like a wading pool in the children’s end of the world market of ever deeper debt – China is in the Olympic high board diving end of the po0l – there is no bottom to the debt bomb rising.
- A run on choice in the business climate, where manufacturing is running to other Asia nations ( forever ) due to ease of welcome, profit possibility, lack of corruption, quality of improved cost, control over shipping timelines, ability to move currency in and out of nation and TRENDS in all this and more. A run on “business” out of China ( forever ) is under way – a run on investment by trillions is unstoppable – a run out of China manipulated phony currency is unstoppable – a run by its own people out of its currency is unstoppable. All this is a mark of an economic system that super heated with communist economics that is not sustainable, within a failed model that is the sun that rose and a sun that is now setting on China economics.
The background is DEBT and a SUPER BUBBLE in pricing. The pricing bubble effects every cost from energy to commodities to real estate – all fed by cheap credit from the communist system – speculating and price supporting ( attempting to control global price points to the advantage of Chinese Gov. owned enterprise making communist leaders already fantastically wealthy even more fantastically wealthy. 1% of the Chinese elite own more wealth than 99% of the Chinese people itself no sustainable as an economic system. The revolution from Cuba to China has not worked to distribute wealth as promised if your last name is not Castro. Communism as an economic intellectual idea is a failed system model since the 1700’s. Why we entertain given its war cost forward use of that failed system is a mystery to the informed economist. Systems are inward focused on attention. They super focus attention on system survival versus innovation and reform. In the AGE OF SUPER CHANGE continual currency – bringing systems current – is the requirement to remain functional and relevance.
While human leadership appears to learn marginally from histories, such as the Civil War and the World War II we do not appear to retain or learn the ROOT CAUSE of these wars which is always politics leading economics versus world peace when cooperative capitalism is the economics leading politics.
This weekend, when REX TILLERSON our new SECRETARY OF STATE met with Chinese leadership in Bejing, while President Markel met with Donald Trump ( who everyone knows, is a germaphobia and hates to SHAKES HANDS with even me or anyone and us who know him would never ask him to ) – and media was reporting nonsense – the Chinese Banking leadership made the statement on the slow news weekend – which no one followed by investors and economists that – without any data – the trillions of dollars of bad loans – the Non Performing Loan’s the NPL’s carried on communist national balance sheets from banking to all institutions as GOOD assets, when the balance sheets are bankrupt and the bad loan debt of debt bomb is rising out of any Chinese Communist control – lying – stating THINGS ARE GREAT we are DOING GREAT we GOT THIS. Not only is that statement not going to calm the market or slow the RUN ON CHINA we have reported here but it will ( and watch us on this ):
- Create a faster run starting Monday as the professionals like myself get how to read this tea leaf of panic and lack of options save to JAW BONE the market a final last gasp.
- To protect itself the hedge and short against Chinese Currency will now speed up attacking the value floors of Chinese Currency beyond any Communist plan to support that value.
- A de facto trade war is in place for if China does not subsidize dump and create velocity when the market is RUNNING OUT OF CHINA their system reaches a point of DEBT BOMB – defaults ( which is very close so much closer than you or anyone but the real market makers think ) and when that default contagion hits, without any warning – the entire system will rebalance on Debt as the ripple is interlinked as never before and the 2008 crash will look like popcorn and a movie next to what is coming from China.
Personally I noted the Chinese last gasp – WE ARE OK EVERYTHING IS FINE – kind of like Wells Fargo Bank cheating countless customers to make bonus payout to its senior management – failing to see the long-term run on the bank – the brand damage VW and Wells Fargo and so many are now suffering as WE THE PEOPLE punish them when our nations will not because they are paid so well to avoid that punishment. All of these signals point to a financial system at the end of its natural life, due to elite system abuse, credit abuse, and pure greed of the few against the many – always super focused inward as to how to keep the legal theft going as long as possible until real system reform occurs. Always trying to shift blame so when system reform occurs the real blame never reaches the wealthy elite truly responsible for the system abuse in the first place.
SO time is running out for China. This weekend keep a brain cell fired that the Chinese timing and release against other news making that release on the record but invisible, is a blame game to move blame outside those responsible. The news sound bite is a declaration of PANIC to the market. Anyone who is more confident of Chinese Debt Spirals ( 300% greater than GNP each year and the BAD LOAN portfolio bankrupts the nation – and the banks and the institutions – IF it is rebalanced so that liabilities are reported when assets once supported the balance sheet being in the black versus the red.
If you and I had bad debts and reported them as assets we would go to prison for fraud.
When nations and institutions do so it is legal theft and no one goes to jail because they are systmeically TOO BIG TO JAIL which remains a system flaw. Until as in the post depression era those who lied about such balances DID GO TO PRISON at the TOP ( but they changed those depression laws in 1999 ) – is returned legally as a box top rule of system reform – we the people of the world are truly FUCKED.
Like musical chairs, we might as well play the game until the music stops follks. What choice do we all have really?
We go to the economic global system funeral wearing black and mourning and crying and depressed, or we take drugs, drink, and dance our way off the cliff.
Berny Dohrmann – Playing Musical Chairs for my Chinese Friends this weekend— March 19, 2017