Apparently, the President of China now is questioning the actions by the US Government to secure the US Economy and warning that if the dollar slips in value they will not buy anymore treasury bonds.
In a statement he suggested that the Chinese investment holdings in US Treasury Bonds may not be financially safe.
The reality is not how he purports it.
The Chinese are not in any position to buy any more treasury bonds, they will be bankrupt in a short time as it is.
Their exports have literally stopped and they are spending to boost their economy, but its not doing much good.
They are trying to get their banks to lend their way out of it along with stimulus on long-term infrastructure; it's not enough and they know it.
Luckily for now they are saving face by blaming the US financial stability on the reason they will stop buying US Treasury Bonds, but the reality is they can't.
And if the dollar drops and the trade balance continues to shift they will be in a deep hurt.
Worse if they continue to spend their way out of it, inflation will be overly obvious no matter how much they move to devalue their currency.
Meanwhile, the Chinese Government is telling their media that their stimulus is working, but they control the media and no one can say otherwise, no matter what is happening.
That façade purported can only last for a little while longer, but their recession could last a lot longer.
Civil unrest is what comes next, and if we look at history it's practically predicted.
Remember 25 million farmers are out of factory work and have headed back home where droughts have caused wheat crop failures and the price of rice has skyrocketed.
Luckily, in a stroke of luck the last week has showed a sharp decline in rice prices, perhaps saving millions from starving in China.
Still, the Chinese may eventually rebel in record numbers.
Things are bad in the Chinese Economy and it's a lot worse than they are willing to admit.
Right now it's all about saving face, question is for how long can they pretend?
In a statement he suggested that the Chinese investment holdings in US Treasury Bonds may not be financially safe.
The reality is not how he purports it.
The Chinese are not in any position to buy any more treasury bonds, they will be bankrupt in a short time as it is.
Their exports have literally stopped and they are spending to boost their economy, but its not doing much good.
They are trying to get their banks to lend their way out of it along with stimulus on long-term infrastructure; it's not enough and they know it.
Luckily for now they are saving face by blaming the US financial stability on the reason they will stop buying US Treasury Bonds, but the reality is they can't.
And if the dollar drops and the trade balance continues to shift they will be in a deep hurt.
Worse if they continue to spend their way out of it, inflation will be overly obvious no matter how much they move to devalue their currency.
Meanwhile, the Chinese Government is telling their media that their stimulus is working, but they control the media and no one can say otherwise, no matter what is happening.
That façade purported can only last for a little while longer, but their recession could last a lot longer.
Civil unrest is what comes next, and if we look at history it's practically predicted.
Remember 25 million farmers are out of factory work and have headed back home where droughts have caused wheat crop failures and the price of rice has skyrocketed.
Luckily, in a stroke of luck the last week has showed a sharp decline in rice prices, perhaps saving millions from starving in China.
Still, the Chinese may eventually rebel in record numbers.
Things are bad in the Chinese Economy and it's a lot worse than they are willing to admit.
Right now it's all about saving face, question is for how long can they pretend?
Source...