Monday, 13 May 2019

CAN HAN CHINESE RATS FEED THEMSELVES? - or, The Economic Consequences of Mr. Trump

Just one look at the charts and you can see rightaway what the economic consequences of the tremendous war that Donald Trump is unleashing on the Han Chinese Rats are going to be. For a start, the Chinese currency begins to sink like lead, fast depleting the hard currency reserves the Dictatorship has left to defend the renminbi. This results in heightened inflation and - most pointedly - in the inability of the Dictatorship to feed its people, which will have immediate repercussions on the political stability and legitimacy of the regime. If the Rat currency drops above 7 to the US dollar, all hell will break loose as all the Rats in the Empire seek to jump ship and....buy US dollars!!!

Furthermore, the tariffs will impact disastrously the private sector in China which is of course the most dynamic and innovative part of the economy almost entirely dependent on exports. As the debt incurred by most Chinese enterprises, including SOEs, is denominated in US dollars, the rates of default on bonds will skyrocket as hundreds of billions of dollars in bond debt expires over the next few years and needs to be rolled over.

The most indebted sector, of course, is the real estate and construction industry which also happens to be the biggest employer in Rat land - and the one and only sector in which most Han Chinese Rats have been able to park their ill-gotten gains. As the housing industry and employment collapse so will real estate values, rapidly annihilating the only store of savings that most of these people have. One can only imagine what this will do to social and political stability in the Middle Kingdom Sewer!

Small wonder the Rats in Chief in Beijing and elsewhere are running scared! Meanwhile, US Treasuries rise and interest rates drop, which means that the US Admin can finance any trillions of budget deficits to finance infrastructure projects and - best of all - military spending that the Rats can only fondle in their dreams! China Dream all right! The revaluation of the greenback will bring about the most colossal transfer of wealth from "emerging markets" like Ratland back to the US of A as the terms of trade go through the roof!

I could go on. As pigs die in their millions in Ratland, there is very little left for the sewer population to feed on and be patriotic about! (The effects of high pork prices are being felt everywhere - including democratic Taiwan.) No need for US soybean farmers to cry out loud: even without tariffs, the Rats could not afford US agricultural produce!

What people must understand is that the strongest mightiest economies are not those that choose the easy path to exports - like Australia and Canada where all one has to do is to dig dirt (minerals) from the soil and ship it as fast as one can to "resource-poor" countries. Because the resource-poor countries adapt in Darwinian fashion to the lack of primary and secondary resources by using brain power - which is what the Swiss and the Taiwanese and South Koreans have learned to do. But those are democracies that benefit from open economies in the world market. China - Ratland - has encircled and walled itself in with all sorts of barriers that do not allow it to adapt and adjust to the world economy - except through wasteful insane subsidies to SOEs and even more reckless unprofitable loans to countries that will never be able to repay them, from Venezuela to Pakistan.

Result: the Rat Empire is crumbling fast - much faster than we thought imaginable. Seize the moment, friends! Let us give this Evil Empire the shove it needs to roll into the burning hell that awaits it and so richly deserves!

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