THIS WEEKEND WAS STEALTH NEWS WEEKEND FOR CHINA:
You read this blog for the TRUTH which you find so elusive in both fake and real news today. You read this blog for one reason – to stay informed about WHAT IS REALLY GOING “OUT THERE”. Knowledge is POWER. We more power and better power ( knowledge ) you can take better action and better protect your nest egg and core assets hopefully.
This weekend the news was pre-occupied with China XI meeting President Trump – with Syria bombing and the world’s reacton – with bombings by ISIS on Easter in Christian Churches in Egypt and no one saw the HUGE NEWS that BIB NEWS in China.
China holds the SEEDS to SUPER CRASH. The fuse. Due to the DEBT BOMB of years and years of spending 300% more than they earn, China has a Debt mount Everest against the cash to pay the debt. Over one trillion dollars in China cash went up in smoke last year to support their phoney currency manipulated so the world has lost trust in the currency and the central planners ECONOMIC policies.
This distrust has led to twenty years of crashing GNP. Last month China had a trade deficit it bought more in to keep things running than they were able to sell.
Also in the first quarter, a soaring rise in BOND DEFAULTING is taking place. We long predicted DEBT BOMB DEFAULTS would trigger the next world SUPER CRASH. The issue will be the DRYING UP OF CHINESE LIQUIDITY. The LIQUIDITY is beginning to enter stress for the entire system.
So the ALARM BELL RINGS. This weekend China Central Planners while everyone was looking elsewhere created a MASSIVE POLICY SHIFT no news media is reporting. Shame on them as this is HUGE and IMPORTANT. The new policy precludes corporate bond classes from being used – as they once were – as required bank collateral. This means banks must replace these core assets with assets that the Communist planners approve. So right when banks are cutting back on lending they must now find new asset classes and scramble to meet trillions of new reserve requirements as bonds are out. Further, the lending to corporate bonds that now can not be held as core bank assets will dry up. Also. banks will not roll over those bonds and will demand payment. This will cause the unintended consequence of snowball defaults. This will cause banks to in effect themselves enter stress and illiquidity.
This new policy is SO HUGE because it can affect the entire system – it is a new uncontrolled economic experiment without historic precedent for an outcome. No one knows how far the unintended consequence of new policy will ripple. It is going to eventually be a louder news item and may become a serious counter weight to the incredible run of capital out of China taking place in recent years. The run out of China is going to pick up steam as serious big brains see this item and viral it.
Put on your seat belt if you’re betting long on Asia – I would NOT do that right NOW.
Buy low folks sell high.
Berny Dohrmann – Keeping the Truth on so you hear it first here May 9th 2017— April 10, 2017