China Banking Crisis & the Unsuspecting World
The comments below are an edited and abridged synopsis of an article by Martin Armstrong
While authorities have accused a private financial group of misleading members of the public with promises of high-return wealth management products, what is not being said is that the rise in the US dollar is a significant factor undermining emerging markets in which China participated. The Chinese government warned provinces and private companies not to borrow dollars. Despite the fact that the Chinese government is portrayed as communist in the West, there would be no banking crisis if they were. The people and institutions were free to do as they pleased.
Many operations that borrowed in dollars made the same mistake Armstrong has witnessed since the 1980s. They sell these loans in a foreign currency with the expectation of saving money on interest. But the FX can be 20% to 40% within a 2-year period and there is never any foreign exchange consideration. In addition to this crisis, people who think it is easy to be a money manager have discovered the reality of being inexperienced. This is why there’s a standard clause in the West—‘past performance is no guarantee of future success.’
Japan is once again the largest holder of US debt. This isn’t because they have been buying more; it is because China is selling off debt gradually because the dollar is high and the risk of war with the US is rising by the day. US President Biden has already destroyed the world economy. The destruction of SWIFT has divided the world and has terminated globalism. China is liquidating US debt gradually, and rightly so. Beware of 2023 ahead.