China to fail

[Mega]

Anyone want to try a debunk on this:-
http://www.marketoracle.co.uk/Article15104.html

Mike

[ThePythonicCow]

Re: China to fail

Anyone want to try a debunk on this:-
http://www.marketoracle.co.uk/Article15104.html

Mike

So I take it that Hugh Hendry is saying that we're in an awful pinch, and if Treasury rates go up very much, it's worse than the Great Depression. Since no one would want that and since there's still a few trillion in retirement accounts that aren't invested in U.S. Treasuries, Hugh apparently hopes that us American savers, retirement funds and hedge funds will buy Treasuries. American will be a net saver again -- yippee!

Hugh's instincts seem to be take financial markets as if they were compressible fluids with conservation of mass in a closed system.

Even he himself suspects that if he's wrong, it will be because the "pressure cooker" blows (see his closing comment.)

I suspect he's wrong. I suspect he underestimates the building lack of trust in America and the Dollar. The shell game he describes of U.S. domestic pension funds and savers bailing out the Treasury won't happen. Continued and increasingly urgent pressure to dethrone the almighty Dollar will happen. The essential basis of a fiat currency is the confidence that people have that the currency will preserve it's value in real stuff for the time period that one is holding/saving currency. That confidence has been enormous; but it is not infinite and the U.S. has been going to the greatest lengths of any civilization in human history to destroy that confidence :eek:. The U.S. is "succeeding" at this destruction, in my view :rolleyes:.

He's right about one thing. If this pressure cooker blows, it gets ugly.

[ThePythonicCow]

Re: China to fail

I wrote:

He's right about one thing. If this pressure cooker blows, it gets ugly.

Ugly means, in my crystal ball, that once American citizens feel enough pain to cry "Uncle", we elevate go from essentially a U.S. central bank to a world central bank, with sufficient taxing and political power at the world level to enable the Banksters to start putting the world into debt, as it has done with the U.S. this last century. Such debt is always the monetization of future taxing, military and political power.

[*T*]

Re: China to fail

I wrote:Ugly means, in my crystal ball, that once American citizens feel enough pain to cry "Uncle", we elevate go from essentially a U.S. central bank to a world central bank, with sufficient taxing and political power at the world level to enable the Banksters to start putting the world into debt, as it has done with the U.S. this last century. Such debt is always the monetization of future taxing, military and political power.

At least the world cannot run a trade deficit.

[Ghent12]

Re: China to fail

At least the world cannot run a trade deficit.

Until we make first contact with an alien civilization...

[Spartacus]

Re: China to fail

isn't that what

pollution

resource depletion

are?

"the world", a political / economic entity, running a trade deficit with reality?

Humanity's Trade deficits writ large?

At least the world cannot run a trade deficit.

[tacito]

Re: China to fail

"the world" running a trade deficit with reality?

Yessssss! Excelent summary.