🔴 How Chinese Currency Devaluation May Trigger a Global Financial Crisis? | Recession Watch

🔴 How Chinese Currency Devaluation May Trigger a Global Financial Crisis? | Recession Watch


Russell welcome back again to real vision great to have you on thanks having me we’re talking about China within the context of recession because we’re in recession week Now you’ve been looking at China for a long time. You’ve been looking at a slowdown in China for a long time Could you put it in context how long that slowdowns been going on? How deep it is compared to the sort of the headline dates that no one trusts And what you’re looking at to sort of generate that view on China’s current position. It’s effectively growth momentum so China is China is always a slightly tricky market because the the data and also a lot of the Financial markets and laws sophisticated as they are in particularly the US and so you still have to sort of tease data out a little bit so to give Context to the China story at the moment You know, if you go back to I think the fourteen fifteen sixteen periods Where fears of China were at a peak what you saw was? Leading up into that slowdown was he started to see problems in its corporate debt market? And a lot of that was driven by the slowdown in commodities. So low oil prices Lower steel prices low. I don’t know oil prices and lower the global coal prices and yeah, just to to remind people you know in the aftermath Lee a Financial crisis China roentgen interests of wealth management product p2p lending boom and a lot of these products were based on getting high Yields out of like coal mines and iron ore and steel factories. So as you started to see margins like industry collapse Credit problems start to emerge in China And they started to become Self-feeding which then create pressure on the currency which then created depression Airy deflationary pressure through the whole global system And ultimately, you know, that was what got priced in in early 15 and 16 and then the Chinese authorities responded through two things one is that they Forcibly reduced a lot of capacity a lot of industries and then to the fiscal push and so what this did was that for the survivors, it created a huge cash flow huge profitability and Sort of cauterize the corporate bond problems So you sort of knew who is going to be a loser and who’s going to be the winner? And so You could start gain certainty back into your investing and the way we went now what is unusual in China at the moment is? If you look at markets like the auto market, there’s a clear sign of a slowdown and And it’s been slowing for a while if you look at sort of Import/export data of markets like Korea, they’re exposed to China slow down massively down nearly 15 to 20 percent year-on-year the weird thing is if you then look at things like Chinese steel production have actually accelerated to be up ten percent year-on-year and So what you can see is the external environment probably driven by new tariffs and trade barriers being erected out of the Trump administration has certainly slowed growth in China and Have the same problem a change at the same time. The Chinese authorities have responded to that through domestic stimulation stimulation So you see iron or steel productions are very high levels And also housing prices being very very strong The problem you’ve got with that when you really cut into it is what you’re seen in the Chinese steel market and what you’re seeing globally is a Is that all of the profits from increasing steel production is going directly to Australian? Mining corporations. So the marginal cash Is production in China? even though they’ve gone to record levels has actually dropped to zero virtually and so the stimulus of the Chinese authorities are Applying to the economy to counteract slowing trade. It’s actually not feeding through the domestic economy as likewise is with Property markets. This has always been the issue for me and I think we saw in London back in 1516 period Angus Tyus and Hong Kong is that you can keep gain house prices up to create a wealth effect but a certain point You get to this point where people go? Well actually I have to save so much money to buy a house I’m not gonna save it almost becomes irrespective here I’m related to there so wealth and in fact for people who do want to buy a house have to save so much money And interest rates are so low It just becomes a sort of pipe dream. It actually becomes a negative for the economy. So I think that’s high house prices Is definitely a driver of like pregs of votes for example, I think it’s a driver of the unrest racing in Hong Kong really moment when you when you remove the Prospect of homeownership from so many young people as negative I think we’re really at that sort of point in China where the traditional stimulus that they’ve used for the last 10 to 15 years Doesn’t work And so then creates all other sort of issues which we’re starting to see come to the fore and how much of that change do you think is The sort of liquidity injections are some views of credit 14 50 percent of GDP annually pretty much from time How much of this slowdown is is a sort of a slowdown that’s added that control versus slowdown? That’s intentional They’ve always talked about moving away from the growth of the cost model to something which is more domestic there may be forced into that because of other external issues but some of these slowdowns that we’re seeing could that be attributed to a Change in direction and a redirection of the internal liquidity away from just the growth model towards Maybe shoring up some of these sort of excess excesses within business. And therefore what we’re seeing here is not so much necessarily a catastrophic slowdown in China but a slowdown in China and Redirection in China that has a massive impact on the rest of the world that got reliant on this one models of pre 2018 so was interesting a China anise Something we’ve seen replicated across the entire world is that when growth is good what we’ve tried what we’ve seen is central bank’s or governments Try and wean us off this QE model, right? Well this of unlimited credit to try and get growth going same was in China. They Cracked down on p2p lending their China juice steel production to rebalance because you know if you want to be a modern economy Your steel industry should be shrinking Not growing doesn’t make sense. I know it’s always hard for people who? worked in coal mines or steel factories, but actually Modern economies are not built on the back of endless steel production growth and the problem is is what because we have so much credit around and whenever any government or central bank has looked to move away from a predator malaise a stimulation You’ve always seen always see a big slowdown and lower asset prices about six months to a year later, you know They realize excesses steel production was bad the excessive house speculation was bad and P2p lending was bad. So I did crack down p2p lending, but when you look at like debt to GP which is beginning to flatline for a couple years of start to accelerate up again, and this is basically being the model of growth for last 15 to 20 years is a You know growth ad costs regardless of any long-term consequences the Model of that is a Japanese experience. It just doesn’t work There are you know, there are differences in different countries, but just doesn’t work in my experience and with China I mean did His research we sort of I don’t know how many China bears has been over the time and it’s always this sort of feeling that You know they have this access in pretty much every area but I guess to the things have been able to Not so much control. The roads worried about is obviously the FX reserves as long as that’s stable which it has been at three trillion for a while and Inflation is the other one in a semi sort of closed economy if you’re stuffing in liquidity you worry about inflation But there’s been no inflation. So can’t China in a way continue to Transition if we’re going to call it that stuff in loads of liquidity as long as they keep one eye on that inflation I figured as long as inflation is relatively static and they’re not pushing yields down So low that it causes more money to want to get out of the country. Yeah, aren’t they going to confound us? And so it goes back to sort of scenario where? China within the global system is a big worry because it’s changing and We’re feeling that you can see the German you can see it in Taiwan Yeah, but China itself might sort of manage its way through this. What is it that’s sort of in there. That’s kind of yeah what worries you is is stuff that you can see in some of the dates or was it some of the Externalities because you’ve seen a few Absentee pairs things like that. We’re going there’s clearly some problems here Now, you know the numbers are leading the cares on China back in the 1415 period got very very weak. Ah And the market was still believing on the China story market belief in China story evaporated. Just fruisé. Yeah late 15 early 16 and then the Chinese change policy a number of indicators turn positive again. Now what’s happened this year? Probably around when Raul got very very bearish Well, you star the see strange movements in the currency markets Which is always what I like to keep a close eye on so one of the you know You’ve had a lot of very strange moves, so You know The Stein was more more interesting one obvious ones. I had primed for most reviewers Is the Australian dollar has continued to be weak even as iron ore prices are gone to five-year highs So Australia is now running like the largest current account surplus ever which historically is a very bullish signal and yet the Aussie dollar continues to be weak I think in a way because it’s a lead indicator on what remin be The renminbi is doing and when you look into the guts of like high or in the steel industry What you’re seeing is almost ELT dollars flowing steel prices, which are generally falling more than iron ore prices going up Which makes sense to me because so the markets looking through the current strengthen iron ore and going you know what actually it’s not real It’s a supply issue. It’s not it’s not being driven by demand and when something’s not driven by demand It’s very hard to be bullish because why she’s getting resolved And people I think at the beginning of the year were everyone sort of looked at that Massive injection and and reflation to the big story in January is doing it again Yeah And as he said you see the Aussie dollar didn’t really react to it. Not like 2016 no mining stocks didn’t and if you look at things like corporate sitting on this sort of Quite a technical level a big neckline looks like it’s going to break down So absolutely the markets kind of believing copper not iron ore and so you know what? what do you think was what was it that was wrong about the reflation so excedrin looked that liquidity and positioned for reductive 2016 and We didn’t get anything close to it. Yeah, look, you know, like I said, I think so If you if you can classic emerging markets So, you know Turkey is a good example, right? You’re like if you push through the Kula query and People don’t believe in the economy. The query just goes out the other side, so he’s stuck in currency depreciation And which creates more inflation but it’s deflationary for your trade botanists. That makes sense He really turkeys between the query into system. It doesn’t actually benefit anyone it just currency weakness and In a way, I think that’s what if you look at what the Aussie dollar is doing and so the other currencies are tightly Traded with the renminbi, which is Korean Won and Taiwan dollar both suddenly being weakening You’re getting the signal that the money is just flowing out which makes sense because you know, you have a very different attitude Towards trade of the u.s much more willing to use tariffs you had some very very interesting trade Policy out of Japan with Korea. I’m sure has been while I do followed but Japanese is something banned the export of some semiconductor materials to Korea As part of like a trade war they did it just after the g20. So when people weren’t talking about Yeah baits could be quite a significant issue Who knows but you’ve got a lot of very sort of currencies the same deflation and the equity is the same inflation and the bond market is saying deflation and so this is the dichotomy you have is You know which one of those is true? And people you talked about currencies down One of the things that Rowell talks about is the the second level of Menindee and whether China will or won’t not listen devalue But actually let its currency go because that has enormous implications The end of the Asian dollar index is basically when India bit of Hong Kong dollar. Yeah looks like it could break down It’s related to emerging market equities So in some ways it’s sort of the big arbiter for some of the global economy or potentially the the touch point for Something quite nasty happening in the global economy. Couldn’t be if the Chinese go. Okay. Actually we are gonna let their an MB go Yeah, what’s your view? Because you’ve got some strong views on their an Indy and what they should be doing Well look, you know I think since the financial crisis China has been the rock around which everything’s being built because they’ve been willing to keep their exchange rate very strong and do huge amounts of fiscal stimulus and Push up property prices to act as like a consumption source of consumption for the world And the currency was actually very cheap in 2008 and then as a euro And then the yen fell against them and then the emerging market currencies fell against the dollar and by definition the remin be in Hong Kong has gotten very very expensive and The the question you have to ask yourself is if you look at how the rich world works you know everyone has delayed at some point the yen went from yeah ad low at this need to 125 use got for 160 down the one Sterling’s got from 210 to over 126 7 Korean Won – very similar thing. Inouye went from 800 to 1600 and so you got this question of you know, if everyone else can devalue why can’t China devalue right And the reason why is because they’ve chosen not to that’s being their policy. They want to have a strong stable currency the problem is is that Look, you know, one of the things I try and do is when I travel I try to get an idea of where is cheap And where is expensive it always more makes more sense to? I’ll be bearish like currencies expensive that crisis cheap with China. So if you go like the two most expensive places These days for me is one is Hong Kong. The other ones probably San Francisco and so both lows are reflective of where the the industries of the economies of both those places are and so Yeah, I would look to see at some point. China says we’ll look, you know, if you’re changing the trade rules We’re gonna change the currency rules the only issue with that is With something like with Trump administration and never oh and all those guys if China suddenly devalues I can’t help but feel the Trump administration goes fine tariffs the fifty percent or so like that and then but then you get a cascading bear market You know, so we’re in a very tricky point so like I said the weird sort of classic macro indicators Divergently radically from what equities are doing and that does happen sometimes Usually the macro indicators are right the the the best example I can think of is commodities back in her way She’s a long time ago for most people but commodities when Parabolic and the first half away has retained interest. This was the peak in oil I think Yeah, see what happened a month and a half later Yeah and then suddenly and it was very weird didn’t make a lot of sense and then suddenly it broke in a way and that’s typically how markets work they force everyone into an asset of exactly the wrong time and then The queerly just disappears and you’re stuck in it So the weirdest thing about our ways are for the first half of eight. There are a lot of emerging markets So hedge funds they’re up twenty percent ten to fifteen specials and russia type guys, they end up being down fifty millions a year as sort of reality kicked in and for china wouldn’t they kind of think that I mean seems that what they’ve actually doing is that they’ve let the currency drift lower with the Terra so in 2018 Terrace concurrency moved toward seven can Bluff set The tariffs and then again this time around a little bit less powerful remove it Wouldn’t it be thought for them? Maybe more sensible to say what we’re going to do is We’ll we’ll let our currency go in response to aggression rather than be the aggressor because nowadays are of importing more and more oil So they’re becoming more important than an exporter necessarily Yeah So a stable currency would be good for that it produces or doesn’t it keeps a lid on inflation which is on the big bugbears yeah, and eventually in a normal world They probably want to open up the capital account and get foreign direct investment to buy the bonds and therefore fund the deficits us-style Isn’t it sort of that they they would probably like to keep the stability. So they want to kind can keep the internal stability But by doing that it creates this externality, which we’re seeing, you know in australia in germany Where the the real fear here is that? they’ve changed the direction of their liquidity that change the direction of their growth and The world hasn’t really caught on to what they’re doing yet and they’re still thinking it’s going to be you know we were thinking until a few months ago that it was going to be a China saves the day and the PBOC provides the liquidity. Yeah. Look, I mean the PBOC is quite transparent. I mean you know while we look at you know, you keep going Queen the dollar room and be exchange rate, but the renminbi Looks a basket of trade partners And so the big issue for China is being you places like Europe and Japan Have constantly tried to keep their exchange rate as weak as possible And the remedy dripped had drifted up first as a dollar when the euro and the yen Were drifting up against the dollar as well, which makes sense to me I’m you did see for a while Asian currencies well with drifting high of us as dollar two intellectually sort of makes sense to me us is raining like a 4% fiscal deficit at the top of its equity and employment cycle so if you normalize those numbers you get into like a seven eight percent deficit which is Wildly high and so you’ve got this weird it’s a Jenga tower type thing where Europe and Japan keep going more negative with their interest rates their currencies week Versus a dollar because I see only way they can generate growth But the problem with that is that puts more pressure on the Remer B to D value Which would then really crack open their entire egg? That makes sense? And so the remedy is really the fulcrum around which everything is is moving at the moment and so we sort of keep a close eye on that people talk about the world that derivatives in the whole of the sort of Credit space this enormous pile as being the sort of nuclear weapons. It’s like well, we know they’re there We know that Russia has nuclear weapons America we’re not going to press the button and central bank’s I think of God into that mode where They don’t want the button to be pressed So they provide that liquidity and I think it goes you talking about the PBOC Providing liquidity and global banks papering over the cracks of China. Yeah for some of these written here you see China weakening and Maybe one of the big questions and something you’ve talked about which is the central banks. Can they? Prevent the button from being pressed The new paradigm. Yeah, or are we kind of looking the wrong way? That’s still going to happen actually liquidity and endless liquidity Actually creates that Minsky moment. So there’s two ways. There’s two different ways that come in air. So come on the PBOC way so it’s intriguing to the PRB PBOC is So you start to see some credit issues Some are transparent some untransparent So the untransparent ones I have to rely on third parties The transparent ones are things like high bore rates have started to move both against libel rates and their benign reasons to where there is big IPO and hong kong there’s other less benign reasons, which is Hong kong dollars. No that longer proceeds to safe haven for chinese money And yeah, so, you know, there’s that stress Normally hi-hi bought very rarely news above libel When it has has been Oh 8 in 98, so to the query issue type moments so that’s a negative signal and the other thing in China is that they do have to take over a small regional bank a couple years a couple of months ago a month ago and Again, now, this is where I don’t get access to this data. Look at other people’s work But what you’re seeing there is because there’s been some shenanigans going on with the corporate bond market China Its cradle of mistrust in high high yield credit in China so credit spreads in China are widely Which matches up what we’ve seen cash steal margins and what we started to see insult forward points for the remand be Stein to inflect Louis. So since 2016 when they put in good policy The remand be looked to be appreciating against the dollar I did have some huge moves against or that’s now beginning to inflect you combine that with a high ball numbers And you’re looking in things like Korean Won Aussie dollar Taiwan dollar The market is dying to look at women be weakness and has been curious to me as a even as US interest rate Expectations have come down You haven’t really seen as strong they’ve higher in the remin beef anything probably bit weaker So signals, they’re all very negative And you mentioned there, you know the neverkey bit being the real in be what’s what’s the sort of you know? Everyone’s talking at the moment about is recession Jus over what time frame so I guess the key question whose time frame for that? What would be the consequences because when I did a mini D Val in? 2015 it wasn’t actually good for China and it wasn’t good for the rest of the world. Yes quite a Bad environment how what sort of timeframe do you have for this? And if you’re playing it Would you play it through Chinese assets or do you look at things like Korea Australia and the sort of the most? correlated economies to Effectively macro China, what’s what your timing? And what’s yours play on that? It’s a very tricky issue I certainly think there’s a love potentially very bad debt and China has certainly been a number of defaults already You know like the problem is it’s not a super transparent market but the similarities like a career in the mid 90s quite high so Korea’s This is ancient history and the niche market for most people but because it’s so similar to the Chinese model I like looking at its a career before the Asian financial crisis have like ten different car companies Some one was small as like a he owned a car company and sasro which still exists but merged you have Kia. I owned a bunch of the guys And basically these days only have one is Hyundai and Kia But Kier is a subsidiary – I owned I so if we look at like the electronic electric vehicle market, right? Which China is a leader at there was this famous relative the one that people might know is near Jerusalem New York Stock Exchange stocks down 70% There are 25 electric vehicle companies in China, right? Whereas most people say Tesla in the West and I just sort of you know Go you think hmm interesting neo would have been the best cuz I managed to get lists in New York has been a disaster And you’ve had this sort of car market slowing so, you know, there’s gonna be some Bad debt out there somewhere. So all the signs remind me of like the problems that came out career and what you’re also starting to see a little bit is that Chinese Bond yields and not following global bond yields lower but Chinese renminbi is not going up And so that historically I found a very bearish signal in there if you again a widening spread versus other currencies and it’s not moving your currency higher that’s closer to a P.m. Crisis type issue. Do you think this is gonna blow any time basically? Yeah, I mean the logic of is Logic is both very simple, but extremely problematic So I think you know as we mentioned earlier there you have very limited the query in the underlying assets And then huge the quitting in the option assets Only a derivative market and then we look at how markets generally traded now there’s sort of big active investors very little market share and declining marginal moksha and passive and ETF’s and when I look at how Large allocators hedge these days they put more and more money into their trend followers So trend following funds did reasonably well in a way. I’ve been a disaster sensibly too. Well in a way And it’s a compact this idea that big allocators If a market goes up and up and up forever, they need something they will track that so a trend follower Gives them both those options. So it manages the risk as they perceive it the problem is is that when you combine those three things I’ve just told you lo the QWERTY huge derivative notional z’ that don’t match up to that liquidy and then the Delta and markets been by trend followers and It sounds like when you have that soft chain guy and who and he would know about Trigger points when you combine all those different pictures together What that suggests to me? Together with issues in China. He’s saying you get a gap in the market that is so one day we all get home on Friday and Over the weekend the Chinese go Hey, that’s it may as well, we’re gonna rip the band-aid off and we come in and the remin be is at 9:00, right and Equities then open up Down 15 on the gap, right? And then of course involve something goes down at 40 or something like that the problem then is that this huge amount of derivatives that somebody get knocked in and They’re looking for the query and one thing I’ve also seen is that the The high-frequency traders that provide most of the query they pull their bids on balls bikes Because they’re not programmed to think They just programmed to react to market prices. So when they see voll go low bids get tighter when vole goes high they pull a bit and this has been the Problem the problem of that view. Is that weather means as you go one way To pull all the CTA’s long and then you go back the other way in a gap and Yeah, the problem of that type of market is annoying makes money So you’ll make money all the way up and then you lose it in one go and if you’re short Although you’re showing before it you lose money and then you make money in up and a blast and unfortunately Of course the preference for most investors he’s tasted for low vol strategies Which You know, you know to try and capture that move requires you to take on ball So the amount of that’s where you see this constant reduction in show interest in the market but Yeah from my perspective, you know the setup looks Perfect. It sounds like unlike in previous Events, there’s been a clear sequencing. So if you take 2008 it started in 2006 lots of warnings in. Oh seven Yeah and in some ways it was a surprise that how big it got but this time around it sounds like we won’t get I was a Problem there. I followed by a problem here It might just be one of those days where? The catalyst is China and it just goes and you therefore got to accept there’s gonna be a cost of carry In having positions on but it might be tomorrow It might be two weeks two months, but you’ve got to have the positions on well I mean that was the same in those seven is that the cost of carry was very high and that’s why there was very little big money that He’s like thing always to my wife when we went, you know, when she reads a big show Which is a movie it would have been a better story if they showed all the guys that blew up From 2003 onwards on that trade, you know first It would have been a much more appropriate story Yes, sir from my perspective though with what I found is that From that period also earlier periods these the currencies tend to give you a very good tell because it’s actually central banks can’t control currencies Directly they can influence it via interest rates if people Think things are bad. You know you Know they’re gonna they’re going to come back so to put you on the spot sort of ran it off your Your view and a part of your view is that you believe that they’re an envy will move through seven They will do something and this will trigger a whole series of chain reactions Is that going to happen before the end of this year? I? think the question you either to ask yourself as when do you start positioning for that type of move So what I would say is if you look at some of a directly related Equities to that type of issue they’re really beginning to move and some what currencies like cream ones been weakening and the other sort of lead indicators on such a Outcome would be for example long day bond yields falling that makes sense. So all those things are happening already So maybe you know you should be you could have started position flat Late last year potentially. Hello it to be fair. The Korean Won. That’s something didn’t happen till this year but When you look at the sort of dichotomy between like I said my current decays and will increase it during The macro indicators are saying yeah. Yeah get position for right now. So Ya know if when that happens is it different yeah, it’s like if you looked at Get back in the financial crisis know there, you know Even in like 2003 for there was this mystery of why long-dead bond yields were higher right remember the curve inverted quite early and non none of the big indicator no, no, the big commentators had any strong particular view why that was just did right and then it became obvious and what I’ve learnt is typically Bond markets and macro markets are right. It’s sometimes as a big lag between what they indicate So time to put the hats on the tin hats on and get ready I hope so A happy look at a pessimistic view. Well, thank you very much again Russell for joining us on a real vision thanks very much for those views and I pretty should say I hope it doesn’t turn out to be true. Me too Okay. Thank you very much. All right, Casey

85 Replies to “🔴 How Chinese Currency Devaluation May Trigger a Global Financial Crisis? | Recession Watch

  1. China’s economy is slowing down big time. Europe is contracting. Precious metals are telling the real story here!

  2. Sorry what ? This video starts with the premise that the 2014-2016 slow down in China was CAUSED by low input prices. Coal, Iron Ore etc.

    How are we meant to take this seriously ?

    Then – he states that the government shut down excess capacity – false. They shut down all the dirty producers / miners and all the ones around major cities – they also opened up a plethora of new ones with higher – clean tech.

    "Which cauterized the corporate bond problem".

    What ? How ? Where did it go ?

    There are more assumptions and economic – "All things being equal" – "rationally behaving actors" – "pickles are cheaper than mushrooms so everyone wears a grandfather clock on their head".

    Next up – "exports from Korea to China are down 20%. Must be because China is collapsing."

    OR – its because China relied on Korea for semi-conductor tech which the US pushed Korea to stop servicing China with , China responded by ramping up its own production and Korea got shafted. Do some homework.

    Next up – "Steel prices are up massively and Australian Ore producers are the only real winners from the stimulus it had no effect on the domestic economy"

    What ? So lets get this straight – only steel manufacturers benefit from the massive "3 Jins" project which was possibly the largest urban infrastructure project in world history ?

    Next up – "House prices are so high that no one can afford to buy"

    What ? Have you not heard of Hong Kong, London, Australia, New Zealand, Ireland AGAIN, all of northern Europe, etc, etc, etc

    Ugh.

  3. What 700% Hong Kong housing price appreciation since 2008 will cause problems for Hong Kong Banks (and implosion of the banking system)? Who know? (Other than Kyle Bass…….)

  4. Opportunities for investors and traders who know how these types of news or events works, I am still learning.

  5. I think people talk with great knowledge on PRC who have no knowledge what so ever. A central Chinese report showed 67% of the Chinese economy was either illigal, black market or not taxed. They will close that hole to balance the trade deficit. Come back in 2026. They have their own crypto currency. 加密秘密汉资产

  6. … a very particular Chinese centric analysis,…. hard to believe that with that only view all kinds of massive world predictions are made.. may it be recession fear mongering for a gain?

  7. I'm fortunate that I had the opportunity to became a software developer and I have a decent salary for Portugal, but to buy a house I have to save for the next 2 years to have a decente down payment. I'm currently living with my parents to maximize my savings.

  8. "The United States of America declares Hong Kong worthy of an intervention" is news. That was policy under George H. W. Bush many many many many years ago.

  9. Here in the U.S., with our low interest rates and going lower, why would any bank want to perform a home mortgage or hold onto a mortgage? In 2008 Fannie Mae and Freddie Mac were leveraged 65 times. What will we be looking to see in the future for Fannie Mae and Freddie Mac on the amount of leverage? 500 times or 1000 times?

  10. The more I read, watch, and listen, the more I am convinced that I should focus on BTC and precious metals. If BTC turns out to be a huge profit, I'll take that and buy real property at close to bottom as I can determine.

  11. Broke USA wants to shove more debt down China’s throat like they did to japan with the plaza accord. Jpy was 300 deflated to 110. USA wants china to deflate and be colonized via hk and Taiwan. USA won’t invade china directly but through colonies and color revolution. USA is also crashing and like the crack addict wants more drugs or else will crash the world with it.

  12. China and Russia are buying gold. These two countries are going to make money REAL MONEY, not fiat shits. The US Fed has no gold but they have been able to lie to the whole world they has the most gold. All their gold was long vaporized in all of their immoral wars and invasions of other helpless countries. The creation of the the CIA in the US was the opening to the gate of hell on Earth.

  13. I live in Asia. China is the biggest Ponzi scheme every pushed by Wall Street. Gold, U.S. Treasury's and guns are the best investment you can make.

  14. In the trade war with US, China has decided not to get into any deal with the US, for now, hoping this will generate the fiscal/trade condition that will bring down Trump who cannot be trusted. Sure, it bogs down US, more than China and the Chinese are striving to create the condition that breaks/reform the petrodollar. Recent recession keeps the Yuan and volume of trade strong.
    Xi's four point guide for a new international cooperation, promoting globalization, is endorsed by France, Germany, Italy etc., and is sure to be supported by almost all countries, promising regulating trade and establishing a new world order, with an eye on environmental degradation. Evolution has a mind of its own, it never let us down.

  15. Good discussion, thanks for this. But why do you have a table in front of you, but put your drinks on the carpet? It's quite tilting for some reason…

  16. Cost of everything are going up, the system is taking things and oportunity away from the poor and the young gives to the well off

  17. A growing steel production makes sense when you want to build tanks and air carriers to wage war. Just saying.

  18. 🤦‍♂️😂 China 🇨🇳 doesn’t care about Currency 💴 they country is like 85% cashless they about to merge into their own crypto currency that’s backed buy gold and other Natural resources and the USA 🇺🇸 way behind 🤦‍♂️

  19. The only reason why iron ore prices have been up this year is because of the vale mine disaster in Brazil. Pull up a chart now of iron ore, we've almost retraced the entire move and should break with copper down

  20. Example of the effeminate personality here is the Clark guy who can't decide if the market is going to gap up or gap down and whether Chinese equities and bonds will end up rising or falling upon devaluation of the Yuan. In other words, he appears to be a male but presents the wits of a female.

  21. When he says he doesn't understand why in 2008 commodities { products] went ballistic and pricing for materials were a mystery ? I question what part of the earth he was living . The bail out of banks that were allowed to bundle mortgages . Then the banks were allowed to sale properties at a loss . Which left the taxpayer holding the tab . With the debt that they created .But where did the commodities go? Bernanke told us all on TV at point blank he wouldn't reveal where it went . So,..there goes TRUST right out of the door for the average taxpayer . This crushed the housing industry and all the commodities that it takes to produce it . For homes being built and sold to people who could never have establish warrant or accreditation from the banking industry . All caused by an administration { clinton ] to changing the rules that worked by a ponzi scam that never had a base to make it work in the first place . Because of deregulation forced on banks which allowed greedy banks to eliminate safe saving and loans contractions . Finally to the demise of erasing all saving and loans banking . By allowing National banking firms to wreck the S.L.B.s . It left the deregulated national banks in charge to play the stock markets with money that was deposited on junk bonds . That were soon to go bust . To Identify ALL the wrong major improprieties that are related to " produced commodities ", would take thesaurus of the abstract ,… manual . As far as China goes ? The nation of China is communist . So it's paradox it believes the is no such thing as personal property . Therefore if the state owns everything and that is their governmental theory ? Then there is no need to share any of the misery of what the rest of the sharing -world believes . Because China's leaders believe in no proprieties owned by othesr than the state .

  22. It would be naive to think that we can hit the Chinese economy this hard in short time without affecting the world's economy.

  23. "Modern economies aren't built on the backs of endless steel production" – can someone please elaborate on the rationale behind this point?

  24. If we can't capitalize on China's devaluation mistake, we don't deserve to win. US is on the verge of victory. China's acting out of desperation. Spending twenty-years reserves within a few years. The more tariffs we both apply, the deeper in the hole China goes. As long as we don't misstep.

  25. Wouldn't it be nice if democrats & media supported United State's efforts to level the playing field for U.S. worldwide trade? President Trump's administration is in the process of undoing unfair trade practices established by past administrations

  26. It’s easy to beat. The more China devalues, the more America adds tariffs and sanctions. There would be massive capital flight stemming from China. The recent devaluation to 7 is just a feeler and test to see how America would respond. Trump did the right thing by labeling China as a currency manipulator right away. China sets the bands everyday, and that day they set it to be above 7, which is blatant devaluation.

  27. China has been slowing for a few years. They have responded with huge financial debt growth. And large over production. Their economy needs 11M job creation/year to keep the lid on. If they can't get global purchases increasing….Big trouble is on their horizon.

  28. China's system that, as usual, is successful for the elite's to everyone's utter detriment, is complete fantasy and built on sand. LOOK OUT!!!!!! 🤣🌋

  29. Take your money out the banks I've already been doing it stop giving them power. We need to go back to our roots if we can't eat or drink it it has no value. Invest in water, food, meds and a way to protect it.

  30. When you print and print money… and are getting away with it .. your not interested in discounting the rate of trading the printed money to USD.

  31. China had rather fall than play fair & quit stealing. I hope we end all business with them.. and let Chinese spy kids go to their own colleges.

    Chinese steal is poor quality. Everything they make is cheap.

  32. China CCP has its tentacles in everything! The Bank of China in NYC needs to be expelled from America!
    No wonder so many Leftist Businessmen & Politicians Support Socialism & China, many are owned by CCP!
    There’s Traitors among us!
    America First!!
    Trump was right about China!!
    They’ve been stealing everything from America for Years! You can thank the Obama Administration for the wealth of the CCP! Obama sold out Our Country to China!

  33. No way Jose, they will just create a huge BlACK eye. The G7 nations are still the mainstay of the global economy as mush as the EU nations want to pull away from the US of A.
    Traditionally when America turns on , prosperity drives for America and all its trading partners.

    President Trump is a traditionalist. After having a marxist muslim destroying America for eight years, its easy for President Trump to make the first steps…. after that its a matter of American finesse which President Trump understands!

    Once China has it's playing fields levelled and they lose their WTO preferred status, they will have to play by global rules and be competitive.

  34. He mentions steel. Says a modern economy should not produce as much steel. My question is: Does a modern economy use less steel than the economies of old?

  35. Clearly recapitalizing of Chinese internal debt is stunning w/real GDP less than 2%- there is now no qualitative way to asses except PRC Tax Office Data I’ve received validate the above-maybe Debt to GDP could as bad as 1300%!

  36. Creating a true digital economy separated for Central Banks the US Treasury could create a US Backed Cryptocurrency-US Bond monetizing option for bond holders into crypto and clear ruleset-the value of labor and asset with a new smart contract model-we are organically moving into this space, but US could stabilize the transition.

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