How much debt and new money did China print out of thin air in the last 5 years?
Hint, it would about cover a recent MSNBC math problem. Try, enough to buy all real estate in the United States at present price and the current yuan exchange rate. In just the last 5 years. Out of thin air.
It is the biggest, fastest, and most reckless financial expansion in human history. By miles. Nothing even a tenth the scale has ever happened before without resulting in disaster.
The Chinese blew that epic financial bubble on hopes of perfect rip roaring domestic economic growth. Then ran straight into the present crisis. They will have a recession. And there is no way in hell all the debt and money they printed over that stretch can possibly be worth the same in a recession environment.
That’s the bomb. Coronavirus is just the trigger.
And when that happens - and it is already happening, look at the US bond market if you doubt it - there will be a world wide recession. The US might be the best house in the resulting bad neighborhood, but we will see a slow down too.
None of it is going to go away by comparing things to seasonal flu or mere talk or after the fact Fed rate cuts or talking up Xi or any similar Kudlow band-aids. Capital markets priced for perfection will correct when no perfection arrives.
Instead of denying any of this or pretending we can prevent it, Trump should be using its nature and direction to further his entirely correct central narrative that US elites sold out our country to global dependence and over-dependence on communist China in particular. The supply chain should shift. China will likely be forced to devalue the yuan before this is over - that could be made the occasion for some prudential protection.
But give up the dream that we will never have another recession or that just having pro business policies - let alone mere spin - can stop any of it. They can’t. When major economies print $50 trillion and it courses through the international system for years and then it turns out there is nothing behind that new money flood, there will be hell to pay. And it will be paid.
Wake up, face the problem, label it correctly, and begin to deal with what is coming. Nothing is more politically fatal than denial and seeming out of touch and out of control during fast, important events. You can’t go back to last November - you can’t go back to January. Craft your strategy to manage through the coming recession, because its coming, and it can no longer be stopped.
How much debt and new money did China print out of thin air in the last 5 years?
Hint, it would about cover a recent MSNBC math problem. Try, enough to buy all real estate in the United States at present price and the current yuan exchange rate. In just the last 5 years. Out of thin air.
It is the biggest, fastest, and most reckless financial expansion in human history. By miles. Nothing even a tenth the scale has ever happened before without resulting in disaster.
The Chinese blew that epic financial bubble on hopes of perfect rip roaring domestic economic growth. Then ran straight into the present crisis. They will have a recession. And there is no way in hell all the debt and money they printed over that stretch can possibly be worth the same in a recession environment.
That’s the bomb. Coronavirus is just the trigger.
And when that happens - and it is already happening, look at the US bond market if you doubt it - there will be a world wide recession. The US might be the best house in the resulting bad neighborhood, but we will see a slow down too.
None of it is going to go away by comparing things to seasonal flu or mere talk or after the fact Fed rate cuts or talking up Xi or any similar Kudlow band-aids. Capital markets priced for perfection will correct when no perfection arrives.
Instead of denying any of this or pretending we can prevent it, Trump should be using its nature and direction to further his entirely correct central narrative that US elites sold out our country to global dependence and over-dependence on communist China in particular. The supply chain should shift. China will likely be forced to devalue the yuan before this is over - that could be made the occasion for some prudential protection.
But give up the dream that we will never have another recession or that just having pro business policies - let alone mere spin - can stop any of it. They can’t. When major economies print $50 trillion and it courses through the international system for years and then it turns out there is nothing behind that new money flood, there will be hell to pay. And it will be paid.
Wake up, face the problem, label it correctly, and begin to deal with what is coming. Nothing is more politically fatal than denial and seeming out of touch and out of control during fast, important events. You can’t go back to last November - you can’t go back to January. Craft your strategy to manage through the coming recession, because its coming, and it can no longer be stopped.
I can’t agree with you more.