7 TRILLION DOLLAR CHINESE BOND MARKETS OPENS
Timed for the Hong Kong anniversary – the Chinese bond market with 7 trillion of assets mostly debt for the government and national company – SRO’s or State Run Organizations and the debt of their private sector debt notes – are not going on Sale for the FIRST TIME to global markets.
The world is asked to BET on Chinese currency which is ultimately in that closed communist controlled central market – the underwriting of bond value or world pass off of Chinese debt notes. So the CHINESE BOND market does not have the regulatory frame work or reporting debt with oversight other Western Markets in rule of law maturity do have. So it is not bond to bond or quality to quality. You play in uncharted new waters in a new model the world has never experienced before one of many taking place today.
The 7 trillion dollar Chinese bond market – facing panic in not being able to support its growing debt markets – they spend 300% more than they earn – now pass what may be utter crap – onto the rest of the world. The way to keep capital circulating is to offload these debts and they now are doing just that. Capital outside China will now own Chinese debt by a spiral of % that will soar next.
Will this contaminate the global bond market? Is that China’s ultimate plan ? Using their cash reclaimed to profit from the pieces in the after math? Not a bad plan folks.
This bond market is certain to foster hybrid structured assets.
New Western Pools of bonds – then super bond pools – then super duper pools of those pools of Chinese debt. This money consolidation will make it impossible as you end up with scrambled egg asset classes – just as the smarty pants created the same pooling in mortgage back debt securities – so no credit agency or nation could regulate or tell accurately any longer – what was CRAP and what was NOT. When the short seller SUPER MONEY POOLS defined the pools when the crap they shorted the market to the point global regulators had to ban legally all world SHORT SELLING for a time to get the markets back into any type of control and supervision…could it happen here and fast? At first it will be sold as riskless risk just like AAA RATED SUB PRIME Crap was sold to sovereign wealth funds and retirement plans for Iceland and Norway to name a few
We expect the CHINESE Bond Market to begin with relish as the world has a new money pipe to invest within and make profits over. The 440 trillion of SUPER MONEY LEVERAGE POOLS will begin NEW leverage into Chinese debt purchases we suspect at a pace and structure the world has never yet known. This will kick the Chinese debt problem down the road….for the communist. The outcome they as a new world power – seek in this new model. They lack capital to support the SEVEN TRILLION DOLLAR DEBT MODELING they created a SUPER BUBBLE FOR so now they make the SUPER DEBT BUBBLE worst by passing it off to the world market space – where the brokers at the top of super money pools make untold profits as this all opens in August. Get the picture?
But how long really. Years or months? Kicked down the road HOW LONG. That is the question economically. Nothing is fixed by kicking the can down the road ( the crises ) because it makes it ultimately WORSE and som any more people ( not Chinese though ) loose and with leverage can lose with margin calls without liquidity later – you can lose MORE THAN EVERYTHING.
Digital markets tend to sort things out faster and faster. In less and less time Super Bubbles crash like they did in 2008 as Super Money works against Super Money for profit taking.
While early profit making in this new pipe will be enormous for the SUPER MONEY we predict the regular investors who invest in these consolidations – Private Equity Hedge Funds and the like – all ETF and no longer PEOPLE managed by human intelligence – rather managed by software – a new UNCONTROLLED experiment is taking place and no one can predict the outcome of these global interactions where risk is shared globally. Bad risk as well as good.
We anticipate China will eventually have wild inflation – then a SUPER CRASH driven by debt defaults made far worse and now fully off loaded globally reducing impact to CHINA Communist planning as a central state controlled model – but passing the buck so to speak to the world. The Chinese real estate market is inside the world’s largest super bubble in history. The policies to slow down the SUPER BUBBLE has all FAILED to date. The growth of the out of control real estate bubble – super inflating driven by unimaginable debt – is creating a spiral inside the super bubble that is racing upward till the bubble crashes. Now much of this debt will be offloaded to the world. Is this a good thing in the market place? Oil Opec nations in the red at todays oil prices are doing the same – offloading debt assets and core equity assets to world market capital. How will this off loading play out?
So to say we are not amused by this hand off of risk we are monitoring the markets which will change once again and we do not believe for the better.
Milton Freidman the economist Nobel winner advocates from his grave that economies have latent core intelligence and self correct if left alone to do so.
Kenyan the economist we believe in as theory and love suggest the economies are herd driven by greed and require greed regulatory frame works to moderate unwanted market speculation abuse and leverage. We h0pe this theory wins out IT is sane. Freidman theory has proven a failure in 2008 and before in 2000 and before in 1987 . IT is just insane.
These two economic theories are in conflict. In modern times as the markets Friedman wrote about where paper clearing – and in ten years after he died – the markets moved into new digital configurations the world has never seen before with leverage and borrowing the world has never known before – pure insanity rules. The market of real economic investing has been surpassed by 2.9 trillion to 440 trillion in pure digital speculations greed and price manipulation.
In our age CASINO CAPITALISM is now THE MARKET and the entire market is controlled by elite super money pools with software. The winners are those who advance ever more well constructed AI super software to control money trading. Prices are manipulated by software for profit making.
The majority of the market of SUPER MONEY pools is on summer vacation until this fall starting in September as we wrote you. We told you trading volume would be lower and volatility would go up and go down in controlled ranges with lower volatility – the lowest volatility since 1999. Software moderated. Until the SUPER MONEY comes back when the year and evolved and improved softwares being built now in AI come on line this fall. They in all nations are testing now. We feel all hell may break lose in this fall with special attention to October when we host a CEO SPACE Acceleration conference following our Big one August 1st I teach at personally. I’d Love to meet you in both.
Rogue nations use SOFTWARE OF MASS ECONOMIC destruction to influence markets and to influence all asset class pricing today and make huge profits by massive short selling in target nations and industries. That new economic warfare has no counter measure from regulators as the laws are all local to nations and the actual trades are all digital and in the cloud. Without a G 100 new economic treaty regulations do not exist for the modern software cloud trading today.
So rogue nations are developing very advance AI trading to take sovereign wealth SUPER MONEY POOLS leverage these pools by up to 50 to 1 per dollar – and then invest to profit from destroying markets they short sell making billions in these wild speculations using ever intelligent software. This is all a new experiment and regulators have fallen behind and MUST CATCH up or the entire system is in our opinion at HUGE RISK and you know why are our regulator readers because you have data the world largely lacks. The population is largely economically illiterate and does not know how to read the financial alphabet . You are readers are developing your financial literacy which helps you to plan business growth and to keep more o your hard earned and precious nest eggs. Which we hope we help you all upon.
Friday the Chase WHITE WHALE where Jamie Diamond was responsible for system oversight – lost some 9 billion dollars when all is said of Chase depositor money from core bank deposits being wildly leveraged without any one’s knowledge or permission – such that each deposit is FDIC protected in a single Chase Bank trade that took seconds with software to utterly lose 9 billion dollars cash bam a new event in financial markets – where Friday the Departure of Justice closed their criminal case against the two LONDON traders that caused those loses lacking witness and hard evidence to convict. This level of software trading Mal practice in the new digital world of CASINO CAPITALISM has no consequence for legal theft. The crooks got away with financial murder.
Without the latest NEW REGULATORY re-think we are stuck between Friedman theory ( favored by law and policy markets world wide as a failed model for 20 years reducing regulatory oversight ) and no regulation exists today in global digital super money shadow banking trading – and Kensyan and moderating regulation and oversight of global financial market space which a minority of law makers and nations are favoring thank God for THEM each and every one. They are leading the save for the entire system one nation at a time – we consult to as many as will have us.
We feel the growing use of AI from the SUPER MONEY POOL planners always seeking to maximize market prices and influence outcomes for profit ( the GREED MACHINE ) operates in an entirely new experiment ( new software the world has no experience with every super changing by the quarter as real AI advances ) so that – the planners truly believe they are forging market RISKLESS RISK there no real risk long term. Which is frankly insane.
Economically there IS NO RISKLESS..RISK. All investing has risk all of it. No exceptions. You the buyer must assess the risk. The tools for doing so are opaque due to out dated market regulatory frame work and the transparency and integrity we all wish for is simply a pipe dream until a global REGULATORY G 100 RETHINK of world Wide regulatory frame work to include digital speculation moderation is CREATED.
The market went digital and the regulations and agencies are antique and must be modernized and expanded to keep pace.
We believe these mind sets while truly well intending to result are naive and misguided just as they were in SUB PRIME. The reasons include at least our investment banker economists cautions include to those planners at the top: This input to consider just consider:
- Software modeling that is super changing is not tested and proven in interactions to real economic conditions.
- Debt and leverage are adding to the risk at a fantastic spiral that causes great concern.
- If interest rates rise too rapidly the debt load in short term debt 100’s of trillions of world wide dollars – must refinance at every higher interest rates. Following ten years of AI and software rising up in zero interest rates – we feel the same problem with Sub Prime has returned but is so much worse due to leverage and Dept super spirals into a new global the SUPER BUBBLE which has become the SUPER DEBT and leverage in the core system. This new SUPER DEBT BUBBLE is fully global now and at a level world markets have never ever known historically. Increasingly beyond care and risk monitoring due to AI and software drivers. The new digital markets have created a world CASINO CAPITALISM all new economics that our paced regulatory frame work to moderate the GREED MACHINE which fails to see or mange the spiral of RISK that is inside the DEBT SUPER BUBBLE driving all other bubbles when you review it. As this SUPER BUBBLE is keeping nations like China and the Gulf from crashing and bankruptcy of nations – also unwanted – a FIX is required. A new creation to fix it once calm economists come together on the real core problem to the entire global system.
- The ETF growth now provides SUPER POOLS that when a Super Crash occurs ( and it always does ) due to debt defaulting somewhere – the contagion of software moving out becomes a ripple CASCADE the humans in the market have for the first time in economic history lost controls over. No one knows the outcome of the future crashes in digital controlled markets.
- The liquidity effect is what we report is our concern where liquidity dries up when there are too many sellers over time and to few buyers and markets seize up close down and become in crises dysfunction. This took months in paper world. In digital world this takes hours. World shock absorbers lost the control in liquidity ( public bail outs ) because there is now not enough cash to fix it anywhere on earth. That becomes the new risk – Sub Prime planners had no models – none at all for what took place if REAL ESTATE went down for years of time. As interest rates rose in Variable Rate mortgages record debt defaults took place and the market seized up and ceased to function. The SUPER CRASH of 2008. Liquidity lessons where not learned and no real regulatory frame work was put in place to address the frame work must now be GLOBAL as the trading has moved to digital and the regulatory Frame work no longer functions in digital casino capitalism.
So the issues simplified here are enormously complex when it comes to PUBLIC POLICY and protecting the entire economic system – which requires CHINA the USA RUSSIA and all the parties to resolve together or it can not be fixed this side of a SUPER CRASH. Which is what we are spiraling into.
We continue to spit in the wind in our lobby work with nations but in the end the CEO SPACE voice for small business, is one voice of many and the FINANCIAL LOBBY has become the larger voice in most nations and returning sanity to my tribe before it is too late is another work we under take. We’ll see if we can use time to our mutual advantage. Time is running out however as you can all see.
Increasingly we are asked to consult on teams for sovereign nations in fact I’m doing one tomorrow morning – and from Super Money pools we consult to. To drive a tribe to take this all on requires a larger community of thinkers at the top and is there enough time remaining to build it. We are trying for you all to the best of our ability given our global footprint in 140 nations.
Meanwhile it all does not effect us. Not today. Not next month. Right now were in debt driven boom times so EITHER USE IT FOR ALL YOUR WORTH or LOSE IT – nations to individuals. August 1st CEO SPACE host the BIGGEST CEO SPACE ( out of five ) in any year at DISNEY WORLD. WE invite all business owners and CEO’s from solo to Billionaires to attend as they are next week. just show up and register at the door. You can click http://www.ceospace.net to explore just explore your own acceleration. To accelerate your business and to build SAFE HARBOR from developing financial storm clouds. the four days in Orlando make a lot of sense to forward planning Invest in acceleration while these good times and AS these are good times and opportunity is today seriously rolling.
Paulson the hedge Fund Managers said Friday it will be YEARS in his opinion till we have another recession. I hope he is right.
Bill Goss my hero predictor said – not so much as he worries as I do Fed Policy WILL raise interest rates now and too soon by too much making untold profits for their SUPER MONEY owners – bit will cause zero interest borrowers over a decade to possibly fail and not make it when their cost rise up – like variable rate on housing but now bank variable rate on the cost of everything. The FEDS last game card to defeat DEFLATION SPIRALS and restart INFLATION which for ten years the Fed has with their one failed policy after another – failed to install. Japan has failed for 20 years. We have failed for ten years. Will they fail now and one more final time? Causing the unwanted super crash. Goss thinks yes. I do too.
What goes up Newton made clear – must come back down.
The question is when.
The answer is no one knows and we can only provide information to help you monitor conditions as you obtain other experts and their information.
Long time readers have profited from legendary accuracy in predictions on this blog site on the WHY THE WHAT AND THE WHEN. We are a bible for press in tracking trends and for money managers and business owners world wide.
We thank you all for staying up on what is REALLY going on OUT THERE.
Berny Dohrmann – Keeping the truth on for you on whats real