China Has Only One Option
The title is of course a little misleading because
China has many options, none of which except one in my opinion will
actually work. Options to what exactly you ask? Options to a
collapsing global economy and an imploding financial system which will
surely affect China as much as anywhere else, but with one caveat. I
take these events as a given, others do not but betting against an
outright panic and global bankruptcy is betting against pure mathematics
itself.
Let’s back up a little bit and look at where China is
currently. They are the second largest economy in the world (maybe the
largest, we can’t really know because the numbers here, there, and
everywhere are made up). China is by far THE largest manufacturer in
the world and also an enormous exporter. China is also in a three horse
race as to who owns the most U.S. Treasuries with Japan and
unbelievably the Federal Reserve itself. They have an oversized shadow
banking system which has already been shown as fraudulent in several
cases regarding copper, zinc and lead as “collateral” (or not).
The Chinese also have a stock market bubble boiling that makes the tulip craze look tame.
Because of sheer size of the country, they are opening something like
four million brokerage accounts per month. In recent days they have had
several stocks hit new highs only to drop 50-60% or more in just one
day. In fact, they had one company stock hit a new high and then go to
ZERO the following day because it was discovered their books were cooked
to a crisp.
We also know China is a huge importer of gold AND the
largest producer of gold in the world. NONE of
