Category: Economics, Finance, and Political Economy

TRUMP AND CHINA

by Mike Streit

If he only knew how easily he could crash chinas economy. He could threaten to do exactly that and they’d concede to whatever he asked for.

China has a massive demographics issue. The one child policy is great for population control but terrible decades later when you need a labor force big enough to keep your production costs below every other nations. Mexico has the labor force we need and they are conveniently located to our south. Lower production costs and lower transportation costs. But mike, Mexico doesn’t have the infrastructure, we are currently fixing that and pumping millions of cubic feet of natural gas to them daily. We are fixing their power problem thanks to our shale boom.

Next up, China is the most over credited nation in the history of nations or credit. Every time they tighten the money supply to start fixing their problem, those they’ve employed thru false methods are liable to be left with the free time to remove those in power. Imagine if we just went out into Wyoming and built entire cities that could hold thousands of people and then left them empty. China has done just that. At one point, you could claim an idea for an invention, insure it and days later file an insurance claim against the invention saying it had failed. With no proof of anything ever existing. China has an Oprah problem with handing out jobs and cash for those jobs that it doesn’t have. How bad is it? An Obama stimulus package every 17-21 days bad.

China has capital flight to the USA in the trillions. So many suspect it’s to buy up power over us. They know their economy is going to fail, it’s not if, it’s when. Getting back 10-50% of their money is still better than zero.

Xi is playing hard ball to look tough. He’s also consolidating power as fast as he can.

Can China make it a little rough on us for a little while? Absolutely. Long term, we can put the screws to them as hard as we want and there’s nothing they can do. 23% of their GDP is trade. Around 10% of ours is, of that 10%, half is with Canada and Mexico.

We are also the only country with a navy capable of protecting or shutting down trade routes. We have 11 super carriers (the rest of the world has zero. The UK will have 2 by 2024 and they are being folded into our system). We have 11 of the 21 jump carriers, it takes 7 of those to equal 1 super carrier.

Trump could easily explain all of these facts to China, tell them they can either agree to whatever we lay forth from now on without further international grand standing or that we will simply pull out the rug. What does that entail? It could actually be any number of things or multiples in concert. We could walk away from protecting oil shipments in the Middle East (China cannot go get their own oil, only japan has a deep water navy), we could ratchet up tariffs to a level that they couldn’t withstand (even with retaliatory tariffs its minimal damage here for maximum effect there), we could also stop all trade coming into or out of China from any nation (including China) that uses our currency as the middle man of exchange (Obama started this, trump turned it up to 11 and has it at his disposal whenever for whatever), we could block all shipments going into or out of China (this would be the most direct action and likely be considered an act of war by the entire international community, but nobody could actually stop us), it would be political suicide on trumps part but he could push us into a civil war or crash our economy (this is going to happen no matter what within the next few years anyway). I’m sure there’s others I’m forgetting, if you know any I missed please chime in.

China’s economy is a house of cards, the slightest wind and it’ll all come crashing down.Updated Aug 16, 2019, 9:39 PM