Writer：Enzo20 Leaves on stone bones
The U.S.-China talks this time are similar to the 1960’s when Soviet leader Khrushchev openly ‘slapped shoe on the table’ in the United Nations. The Communist Party will soon be extinguished, repeating history.
The two collapses of the Communist Party are analyzed in the context of “using money to destroy the CCP”.
The first collapse. China’s demographic dividend will disappear in 2020 and become a burden. 2016 is the year when the economic collapse has not yet happened because the mainland has strong administrative measures. It is possible to operate without collapse for the time being. It is also possible to explain why from a technical point of view. First of all, the traditional collapse refers to: for example
1）unemployment, many people can’t afford to pay for their houses.
2）many people can’t collect money for their business; bonds default on their debts; and
3In the traditional free economy, the banking system has problems, the people will crowd the banks, because the banks are related to each other, one bank will have problems and other banks will also have problems, the chain reaction down, this is called systemic risk, so the whole economy dives down, because the economy can not run. This is the so-called economic collapse.
The other kind of economic collapse is like the Golden Circle Notes during the Kuomintang era, when the government printed money indiscriminately, causing super inflation, which will destroy the fabric of society, the economy will begin to shut down, and there will be two situations will occur:
1）Super inflation, how is it? For example, if a bowl of noodles is produced, flour is needed, but the person who makes the flour will not be willing to supply it to the noodle store, because after supplying it to the noodle store, he cannot buy back the price of wheat used to produce the flour, so he can only sell it to him little by little, and each level of supply will only supply little by little. Economic activities would come to a halt. At that time the economy of the National Party collapsed. That’s how Argentina’s economy collapsed. When we talk about economic collapse, we need to understand how the economy collapsed.
2）The most dangerous economic collapse in the middle of the 20th century was deflation, which destroyed the economy. So prices began not to fall and thus recovered. But in China nowadays, it is more difficult to happen. Because CCP has invented a trick to combat deflation. This is called printing banknotes. As long as you keep printing banknotes, deflation will not happen. Because you do not use money, it will print more, CCP is not afraid to print money, the reason is.
a）It is not afraid of inflation because if inflation occurs, it can implement rationing, where everyone has a real name registration and rationing allows the economy to continue to run for a period of time.
b）It is difficult for a credit collapse to happen in the short term, because the RMB is not a freely convertible currency in the international arena, and if there is a run, the government can print more money for the People’s Bank. You can’t collapse it with a run. So there is no systemic risk. The domestic debt crisis, no matter how serious it is, will only cause asset bubbles, in the end now more than 200 trillion M2, now more than 400 trillion of debt, it does not matter, the bank canceled 200 trillion of debt is finished, the People’s Bank to hold it up can be. Who asks the bank to take money, it does not let you withdraw money can, because administrative measures to limit everything.
Now the only thing that makes the Chinese economy really risky and uncontrollable by the strongest administrative measures is foreign exchange! The moment the Chinese Communist Party runs out of foreign exchange, it’s dead. Because the Chinese Communist Party cannot produce foreign exchange, because it is beyond the scope of state management. It will take some time for the Communist Party to create a foreign exchange crisis. So far it will cause a slowdown in the economy at most. The G-series of the New Federal of China super artery that can help the Communist Party bleed! This is also a way to kill the CCP with money. I believe that the United States, and other allied countries, will be clear and actively help bleed the CCP in the financial markets. (to be continue)
【The article only represents the author’s personal opinion】