China is no friend, even as they have been absorbing the inflation that the West has been exporting, for 30 years. China seems to be in the process of imploding.
They will be returning their holdings of US debt, along with their holdings of US dollars. This will export China’s inflation to the West; in particular, the US. A little taste of our sins retuning home. Not pretty.
This is how the Keynesians have been able to support the government claim that their is no inflation.
WWII took care of a lot of excess production capacity, around the world. The US was untouched. The indications this time, are for the US to lose a great deal of our excess production capacity. That includes financial and physical distribution facilities.
Can you heat and cook with wood? Got horses for transportation?
Got a green thumb, so you don’t go hungry? Got easy access to water?
Got defensive tools… ? Got the ability to stay awake for an extended time?
Submitted by Tyler Durden
Over the weekend, FT noted that China’s central bank reported that companies and individuals sold RMB 684 billion ($109 billion) worth of foreign exchange and bought an equivalent amount of Chinese currency in January, a record for a single month. On the chart below, please point out the Chinese “hot-money” inflationary ticking time bomb (hint: highlighted).