China came in with astronomical declines in both exports and imports. The numbers at almost a 20% decline in imports – meaning the rest of the world is a trillion dollars light in their sales for January – and China is a trillion lower in their own sales – which means jobs are going to crash along with the economy. This was many x times worse than the worst case analytics.
And the market went UP. Why? The numbers came out after the market closed is why.
The Yaun is being devalued by two sources. The market world wide such that a two tier exchange rate now exits – one inside failed communist policy control inside mainland china – and another outside where world trade actually happens.
Today the Bank of China suggested the entire market is speculators manipulating the currency? Why though?
If confidence in policy and currency is high speculators buy currency. If they lack confidence they sell currency. Today the people of China have broken trust with the communist system and are voting by hoarding dollars and EU’s and selling their own currency. They don’t want official currency with negative return rates in their possession. They want US dollars to prorec themselves.
The Chinese currency is going to have an explosive decompression. There is no SOFT LANDING for China. The reasons are as follows – which lead to Asia contagion and world wide recession even depression:
- Global Deflation – Japan has been unable to re-inflate the second largest economic machine on earth over thirty years trying everything known to man – all has failed with .30% contraction in Jan. Japan remains in serious recession.
- Debt Bomb – the bad debts that will never be repaid include entire cities that are empty in China – massive unemployment now dumping into provinces nation wide – a contraction in consumer buying and spending that is the worst in 30 years for China – a death spiral – in which the bad loans will in fact create instability for the banks investment banks as all credit and financial circulation dries up in China – the DEBT BOMB WILL GO OFF – it is worse in China – it is terrible and unresolved in Japan, Pakistan and India are the next worst and they are combined equal to the EU bad debt of both banks and nations. The defaults will SOAR in DEFLATION market as there is no way to pay back the bad loans and the day of credit bubble adjustment is now at hand and can’t be avoided.
- PREFECT STORM – DEATH SPIRAL – the contraction of China is contracting everyone else – the DEFLATION is global now and the central banks are obsolete and create more of the problem and provide no solutions – they make the problem much worse – all Feds need to be retired by merger into their respective treasuries – but they will continue to make the bubbles and crashes worse – China will implode – catastrophically as their policy makers have literally LOST CONTROL and LOST CONFIDENCE in policy making – this distrust will explore to Pakistan and India who will implode upon deflation and bad debt which will ripple through banks unable to cope shaking the world financial system.
The problem remains unresolved debt and speculative trading policies which only a G 100 RETHINK of the Global regulatory frame work can resole. The old system has failed – competitive capitalism and communism. The new System COOPERATIVE CAPITALISM needs a full partnership equal playing field approach. No longer can the LAWS AND REGULATIONS be only “LOCAL” while the trades and speculation are in the CLOUD fully unregulated and in the DARK via shadow banking -where fortunes are made on casino capitalism – a feature of failure to regulate globally with UNIFORM polices we all agree upon. Common damn sense.
Today is a nightmare.
The old system is finally dying.
The only thing we do not know is will we march down history lane – Contagion Super Crash and World War ( our 5000 year pattern never varying ) or WILL WE WAKE UP and COOPERATE and avoid all that once and for all?
Distrust and negotiation will not get the world where we need to be.
Only cooperation, integrity, ethics and creative innovation will reform a prosperity for all landscape the world deserves and the unborn call for on our watch.
Do we have the tools. You bet.
Do we have the WILL – that – becomes the question does it not?
Compete and we perish.
Cooperate and we thrive.
Which will we actually do?
One is insane.
The other is fully sane.
Will human’s continue to be insane?
Perhaps that is the cornerstone question.
We’ll keep a light on for you. Data is so pure. Don’t you think?
Berny Dohrmann – Keeping you in the KNOW – March 6th CEO SPACE I’d register folks