BE PREPARED!! THE DOLLAR IS GOING DOWN!
WARNING.. THE DISASTER IS COMING.. AND THERE IS NOTHING YOU CAN DO EXCEPT PRAY!!
China Declares Currency War on US Dollar Ahead of September Showdown
IMF’s Christine Lagarde gave a press conference in Washington DC making September 15th the deadline for the US to agree to give China more power within the International Monetary Fund.
Here, from Reuters:
“The IMFC, which is one of the key governing institutions of the IMF, has decided that if by the 15th of September this matter is not resolved satisfactorily, then we have to select the interim step that we will take … to make sure that there is an element of down payment on the quota increase…”
It’s not quite clear what Lagarde intends to do but the problem is a serious one. The US is obviously reluctant to cede too much control of the IMF to China and other developing countries. If Lagarde pushes too hard, she may significantly degrade relations between the US and China.
Not that they need further souring. Against US wishes, China has just devalued the yuan and the move “clobbered” markets around the world and especially in the US.
Reports were that when the damage was tallied after Tuesday’s trading, the MSCI All World Index of global shares had fallen 1 percent. US exports will no doubt suffer as well.
Bill McQuaker, co-head of the multi-asset team at Henderson Global Investors reportedly commented, “What is good for growth in China is unfortunately bad for everybody else.”
Of course it’s questionable whether a depreciated currency is ever “good.” In this topsy-turvy Keynesian world we live in, people have gotten the idea that when their currency is debased the economy will somehow improve.
This is only one fallacy that people hold. Another is that the US military-industrial complex is a necessary evil that is dedicated to providing a bulwark of national security to keep people safe. Nothing could be further from the truth. A military-industrial complex, as Dwight D. Eisenhower warned, is inevitably going to manufacture wars and military crises to stay in business and increase funding. Like it’s done for decades now.
China is going down this road, using its fiat-currency (the yuan) to fund a huge military binge. It is contesting certain waters in the South Pacific and has started building islands in the area. To protect the islands, China has increased its air-force presence and has also started to build more sophisticated planes and ships.
Chinese “aggression” has the US reportedly considering the use of its own naval and air power to confront the Chinese. John Kerry has traveled to China to personally make the US stance clear. Meanwhile, Chinese President Xi Jinping is due in Washington in September to discuss the military standoff.
It’s not clear if Kerry will discuss the festering IMF issue, but these three points of contention – as mentioned above – certainly constitute a trio of potentially disastrous sore spots.
There’s no doubt that the corrupt and dictatorial Chinese government is panicked by recent events. China’s stock market has lopped off over US$1 trillion in wealth in a dramatic and unexpected bear market.
The Chinese government has a kind of pact with its people. In return for providing prosperity, the Chinese people cede political power to the ruling party. And their hold on power is even more tenuous than in the US or Europe which means the Chinese government is liable to be a lot more desperate as a result.
I wouldn’t be surprised to see a good deal more tension – if not possible military action – in the fall, if the Chinese economic situation doesn’t improve. And there are plenty of things a desperate Chinese government can do to temporarily stabilize the Chinese situation that will have a destabilizing effect on the world economy.
China, for instance, could further debase the yuan, crushing the feeble “recovery” that US and European officials currently insist is taking place in the West. Alternatively China could begin dumping its trillion dollar reserve of US currency – and maybe it already has begun. There are reports to that effect.
Such dumping could set US price inflation soaring, forcing the Fed’s hand on a significant rate hike and plunge the US into a Greater Depression.
But avoid the worst case and one still faces significant difficulties. The combination of currency debasement, currency dumping and increased military tensions could heat up in the fall considerably.
What really is catching our attention is on how these events all seem to be coming to a head in September. Even Christine Lagarde has mentioned the exact date of September 15 of this year as a deadline… this is the exact date that we have mentioned in our viral video, “SHEMITAH EXPOSED: Financial Crisis Planned For September” as being the possible beginning date of a crisis. And then to have the Chinese President also coming to the US in September has us wondering if the crisis we are expecting will be China/Yuan/SDR related.
The Chinese have a saying, “may you live in interesting times” – and September looks increasingly interesting on a number of fronts.
GOOD GOD.. ITS ALMOST TOO LATE !!