/biz/ - Business & Finance

>>15096262

China has very little plays left.

See picture. Its from 5 years ago, but little has changed. The entire Chinese economy (minus Shanghai & Hong Kong) is almost entirely dependent on debt financed growth. The debt financed growth is almost entirely based on collateral from US Treasury debt.

If China dumps all the T-bills, as you describe, their entire economy becomes one big Enron and explodes. Not sure if putting 350 million Chinese men out of work over a month period is the negotiating strategy China wants here. Not to mention their currency becomes worthless and they import 95% of all their fuel based on USD markets.

America has three insurmountable advantages in these negotiations
(1) The American economy is almost entirely consumer driven with less than 7% based on global trade. China's is almost exactly the opposite.
(2) The global economy is based on USD reserve currencies. If China dumps them, then there will be plenty of buyers at the dip. Where else are you going to park your money global economy? Euros? Canadian dollars? Please.
(3) America is the global energy monster and entirely self sufficient. If America wanted to they could shock the entire global energy markets by cutting off exports and send oil +$200 / barrel while keeping oil $60 / barrel at home. Don't like it Mr. Global economy? Get your oil from Venezuela, Nigeria or Iran instead. Good luck with that.

China made the play that buy fucking with America's farmers via basedbean sales, they could bluff Trump / Lighthizer into caving. Trump called their bluff and raised tarriffs instead. More tarrifs to come boys, this is just getting started.

Don't even get me started if US starts putting tarrifs on Chinese currency manipulation. Via con dios Chinese economy...