CHINA OPTIONS SHRINK TO ZERO – ECONOMICALLY
Communist and socialist countries, engage a central market control economic model, versus a free market control economic model, that creates typically, over decades fantastic DEBT and CREDIT market ABUSE. This economic dynamic builds up bad toxic debt, that over time, compounds, and becomes a mountain that ends up controlling policy. DEBT AVOIDANCE. The central planners become trapped, in a core economic model ( socialism and communism ) that simply is less efficient than free market capitalism and far less self-correcting along the time lines.
The financial lance the CENTRAL PLANNERS in CHINA now reside within, have narrowed from a commuter lane in an eight-lane freeway 12 years ago, to a very narrow arterial country windy unmaintained road, with potholes
I want you to visualize the CHINA problem:
- 12 Years ago 15% GNP – gross national product output rising like a rocket for a very short time.
- As 1% of elites owned 99% of the wealth the economics became unsustainable and the system wobble stopped growth.
- The system crashed from 25% growth to above 5% growth today ( they lie about real numbers ) so adjust them
- The down graph goes down the flip chart for a decade and breaks the marker pen as the line proceeds on the side wall
- During the crash as industry capital and internal wealth fled china in the largest run on a nation in years
- China central planners used DEBT ABUSE to create a 300% borrowing against jobs to support currency and jobs
- This created a rebalance of inflows of capital reserves to an outflow of capital reserves by over 1 trillion in 18 months
- A bad debt overhang of toxic never to repaid debt in China now is topping 100 Trillion US DOLLARS
- Interest rising in the USA means the YUAN value already 20% down in 2016 against the dollar is crashing further
- Debt China is running at 300% to one in INCOME must be largely repaid in dollars, soaring in value making payments impossible for CHINA to pay
China must stop supporting its currency which could drop its value by 40% in the New Year ( if not before ).
A free market float of the currency will drop the value of CHINESE PHONY money by 40%.
Inflation in China will soar as capital runs from all sectors foreign and internal into higher safer dollar returns. The run in China which has been fantastic is nearing CONTAGION levels as the FED adjustments come into the market. There is NOTHING that Central Planners with years of failed economic policy can do to fix this. The IMF warned them. Then IMF put the Chinese Yuan into the class of the London POUND and the US Dollar – that was a failed IMF policy that will bite their credibility directly in the Chairwoman’s ass worldwide – now on trial in FRANCE. Like the last French IMF chairperson as the IMF, authority is diminished. The USA warned and offered to help but all have been rejected by closed circles COMMUNIST CENTRAL PLANNERS who just know better.
In trying to rewrite economics the last meltdown gasp of economics is currency controls and price controls both going on today in China. Market controls, trading controls, and draconian controls that since 1700 have never once proceeded into any future but collapse and failure of the economic system itself.
China, as I’ve defined, is in an economic DEATH SPIRAL. As the tornado of unresolved DEBT ABUSE continues, bankrupt banks and financial institutions allowed to book utter crap bad debt as good assets will only get worse and the SUPER CRASH will be deeper, faster and worldwide influencing due to syndicates with global financial institutions known as counterparty agreements. Liquidity worldwide freezes up when the DEBT BOMB goes OFF in CHINA. A run on the banks or institutional runs via massive short selling as took place in January of last year sinking all China markets and leading to a huge currency devaluation – right before XI said that China will never devalue its currency. XI has lost confidence in central economic planning policy ( nothing personal just economic failure in policy ) as has CHINA communist central planners under XI. Can’t be reclaimed now. The DEBT ABUSE IS TOO FAR GONE – wealth is too conslidated, circulation is restricting and the cost of the debt mountain is about to soar to levels China can not and will not be able to pay.
The short selling in everything CHINA is going to become massive. The profits made on the short selling will pass one trillion. China lacks resources to offset the massive rising short selling on the failed economics. The market is always smarter than the Communist Central planners and will always protect itself.
Wealth in China is going to rebalance and that rebalancing is going to be painful for CHINA and the painful for the rest of us – the entire world.
So imagine this:
1. China is borrowing more and more to keep from an employment crash and civil war inside China. A CHINA SPRING.
2. China provinces could politically revolt following SUPER CRASH.
3. Debt cost based in dollars for repayment see China Yuan crashing in value, every day in every way in every market, while US dollar value is soaring making repayment of existing and future debt impossible, what the WORLD BANK calls UNSUSTAINABLE DEBT POLICY. A copy of the socialist failed economics in GREECE where last week they gave the finger to the IMF, paid out when they lack the cash to do so – pension money ( politics over economics ) such that – Greece will not get its next traunch of required life support capital and must go bankrupt and itself bow out of the EU with bankrupt socialist ITALY right behind only second to CHINA.
4. As FED rates rise dollar values simply SOAR worldwide. Everyone rushes from the DEBT BOMB NATIONS and currencies back to the higher profits and stability of the strong growing USA economy. A free capitalist economy that self-corrects and is more successful for 400 years than communist and socialist economic models. History never lies. People under capitalism which is needed evolution to improve and is far from perfect – do better overall. Cooperative capitalism is slowly reforming economics, a theory we developed and published in the book REDEMPTION THE COOPERATION REVOLUTION for Fortune leaders and for heads of state worldwide. Increasingly capital funds are reading this work and adopting its policies when they fund. Because it makes capitalism BETTER.
5. Communism principles are better adopted in SOCIAL COOPERATIVE CAPITALISM now rising in the most successful nations. Communism while well intended is a set of box top rules that simply do not work. Communist leaders are well advised to move their markets into the more successful capitalistic laws and model so easy to copy worldwide. Why continue with a failure.
Debt-ridden failed DEBT BOMB NATIONS must write off their bad debt, the sooner the better which will result in a long painful super recession. The failure to do this step will result in SUPER CRASH and worldwide depression.
Credit and Debt ABUSE coupled to wild market speculations where more money invests in speculation for profit than real economic investing is the CAUSE of all world depressions and wars from Rome to this day.
A small global leadership of investment banker economists has the historic data to see the insanity of repeating past history over and over again. If I can write one truth – economically speaking – leaders at the top learn nothing from past history and they always repeat past history and are always so confused when the economics take over their political bad choices. The people suffer so needlessly because of these bad choices.
Economic literacy is not taught in schools and should be the second job of education. The three jobs of education in my opinion is to 1. teach students to be self-reliant to think independently to debate intelligently and to foster core civics and culture for each community education is offered to weave a cultural tapestry of pride and rule of law in all communities one for the other – 2. to educate entrepreneur core skills as backdrop all other education in math science arts language and culture and 3. to educate economically on systems modeling and history to avoid repeating past economic history through an informed population of leaders who possess this secret knowledge.
Leaders fail because they are not educated properly nor are their advisers. It is NOT THEIR FAULT. They simply do not know HOW to reform education globally which is not hard and teachers would welcome the new focus and directions. Empowering teachers to do their best work in this new box top rule set would elevate education as the first sacred task of all nations to its unborn.
So we are all stuck. The world is competitive versus cooperative. A G-100 three year ECONOMIC CONSTITUTIONAL GLOBAL CONFERENCE chaired by an inspired visionary investment banker economist chair person can resolve the issues and break with the economic merry go round history. 287 Captains steering the Space Ship PLANET EARTH in entirely different wakes to their destinations creates a sick planet, failed economic systems that impoverish billions of us, and leads to SUPER CRASH via DEBT ABUSE and world war.
It’s not THEIR FAULT. They are ignorant. Their advisers are really not providing the information to go in the right directions. Politics lead economics rather than the correct form of economics lead politics globally.
President Bill Clinton the most awake on this model solution dynamic uttered the single phrase that defines the age that we reside within when he said after reading REDEMPTION THE COOPERATION REVOLUTION hand carried to Hillary
….….folks ( on MEET THE PRESS USA )…..we either cooperate …or we perish…it’s as simple as THAT……President Bill Clinton USA to the world press
Now consider all the idiots on the news telling you in 2010 DOT.BOMB crash – the OCT Super Crash of 1988 – the 1911 Crash and recession – the crash of 2008 – just before each CRASH – the BOOM IS SOLID and WILL NEVER END …BUY BUY BUY.
Why do so many waits and buy at the all time high thinking they are missing out – right at the end of a long boom bull market that based on known financial history must soon CORRECT if there were not system flaws? When you FOOLS RALLY a SUPER RALLY on no economic models for that run up – you always adjust after. It is fatal to so many trusting their nest eggs to those suggesting it is SAFE to invest at the all time HIGH at the END of the longest run up in modern times – and that investors are foolish to not dive in at these insane HIGH levels?
WE have said to acquire the discipline to sell high, ( now ) and move to all cash and wait till the CRASH and then buy low.
Going against the herd is what I have done since the early 1970’s. And WON. Always.
Those that follow me know that single rule sell high buy low. Buy low sell high. No other rule applies. Data not emotion rules.
It is our opinion CHINA and the EU Debt ABUSE BOMBS will explode soon. When they do and as they do from forces you now know leadership has zero power this late in the game to control ( save with a G 100 ECONOMIC GLOBAL CONSTITUTIONAL CONGRESS TO RESET GLOBAL REGULATIONS IN THE DIGITAL AGE ) – where competition in communism and capitalism will default the system into SUPER CRASH and global depression.
Historically that is the place we are today.
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What I’m predicting is going to happen. Your safe harbor is:
- While the good times roll – build momentum and with CEO SPACE it is so much faster and safe.
- When the good times top CEO SPACE will present blueprints how to prosper in the new down markets.
Owning your own business IS the safe harbor. Waiting if you’re on salary to get fired and downsized and then start your own business is OK but you’re so much better off if you start NOW while you are on salary. IF you already own your own business tell every CEO to read this blog as you GROW FASTER learning at CEO SPACE options tools and tactics to GROW FASTER.
That IS SAFE HARBOR.
As your holidays arrive at research and learn earn and return ( to your blog site ).
Berny Dohrmann – Keeping the TRUTH SEARCHLIGHT ON BRIGHT JUST FOR YOU TODAY