China’s Central Bank Discusses Inflationary Fears

Armstrong Economics Blog/Central Banks Re-Posted Nov 10, 2022 by Martin Armstrong

Spread the love

It is not out of the question that China is holding onto its Zero COVID policy tactics to prevent the people from realizing banks are in the midst of a liquidity crisis. I reported earlier in the year that China had manipulated QR codes to prevent citizens from entering banks. Over $6 billion (39 billion yuan) was frozen from accounts in June, and thousands of people were unable to access their bank accounts. A few banks in Henan reported bank runs, and residents were planning a protest after finding that their funds were frozen. Some depositors attempting to access the bank were taken by force into quarantine camps. Others were not permitted via QR code to even gain access to public transportation, let alone enter the bank.

The Chinese government now states that Henan Xincaifu Group Investment Holding illegally colluded with bank employees to attract funding unlawfully. Of course, this cannot be the only culprit for the banks lacking liquidity. The situation in Henan is a small glimpse of how bad the situation could become.

The yuan is generally less attractive right now. Ongoing COVID lockdowns pushing businesses to flee. Geopolitical conflicts are causing investors to fear that China may no longer be a safe bet. China’s plans to loosen monetary policy directly conflicts with the Federal Reserve’s hawkish stance. The People’s Bank of China governor Yi Gang stated that although less impacted by inflation, China’s still feeling the global shockwaves. Delicate sectors such as real estate are extremely volatile right now

Printing more money is not an option. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, would like tougher regulations and cited inflation as the global economy’s main challenge. “The central banks of major developed economies have aggressively tightened monetary policy, which is likely to trigger a widespread economic recession in Europe and the United States,” Guo stated.

Yi took things a step further by suggesting that straying from the current policy could go so far as to trigger hyperinflation in China as it must remain competitive. “If the government is allowed to overdraft through the central bank and relies on printing bills to meet the needs of fiscal spending, it will eventually lead to hyperinflation, unsustainable finances and a debt crisis,” Yi said.

China is in a tough spot right now. Our computers still indicate that China will surpass the US to become the next financial capital of the world after 2032. Its journey to the top will be interesting to watch unfold.

Bolsonaro Hands Over Power to Lula             

Armstrong Economics Blog/South America Re-Posted Nov 7, 2022 by Martin Armstrong

Jair Bolsonaro did not immediately concede to Luiz Inacio Lula da Silva after the close election of 49.1%-50.9%. This is the closest presidential race in Brazil since 1985 and marks Bolsonaro’s first defeat in his political career. Bolsonaro supporters held mass protests across the nation to protest Lula’s victory and blocked hundreds of major roadways. Bolsonaro first sided with the protestors, saying they felt “indignation and a sense of injustice.”

As our computer warned, there would be intense politically motivated civil unrest worldwide this November.

The intense backlash from across the globe caused Bolsonaro to change course. “I know you are upset… Me too. But we have to keep our heads straight,” Bolsonaro said in a video posted online. “I will make an appeal to you: clear the highways.” Bolsonaro confirmed with Brazil’s Supreme Court that he will hand over power to Lula. “I have always played within the four lines of the constitution,” he said, without declaring defeat.

Luiz Inácio Lula da Silva is a member of the World Economic Forum. World leaders also affiliated with the “elite” group have congratulated him on his win. His policies will align with other WEF leaders and is a glimpse into what to expect from Brazil going forward. Bolsonaro’s words to the people will not eliminate the anger they feel nor will it prevent the people from continuing to protest.

Bolsonaro loses – Good Night Brazil

Armstrong Economics Blog/Politics Re-Posted Oct 30, 2022 by Martin Armstrong

COMMENT: Marty; Thank you so much for Socrates. Jair M. Bolsonaro lost to the left. I couldn’t believe it. Socrates had a turning point, higher volatility, and a Double Directional Change here in October and November. Looks like we will go the way of Argentina.


REPLY: The currency should decline into 2023. The promises of the left will never be accomplished. Just for the record, Bolsonaro I can tell you that when he was at Schwab’s WEF, he told a friend of mine that they were all a bunch of idiots. Inflation will soar because also the currency will decline. Politicians are ignorant. They think they can do whatever they want and do not understand that we are all connected and thus they cannot reverse the international trend.

DOJ Charges Two Chinese Nationals with Obstruction of Justice in Huawei Telecommunications Case

Posted originally on the conservative tree house on October 24, 2022 | Sundance

President Trump and Commerce Secretary Wilbur Ross both raised serious concerns about the malign intents of Chinese nationals involved in the efforts of Huawei Telecommunications to infiltrate U.S. communication networks.

The Trump administration tried to block Huawei from involvement in the 5G telecommunications system in the United States claiming there were national security interests that could be compromised.

However, Washington DC politicians, and Canadian Prime Minister Justin Trudeau, both of whom were recipients of Chinese donations, defended the expansion efforts of Huawei and accused the Trump administration of “Asian hate.”

In the background, to reinforce a false political narrative surrounding the Asian hate theme, in 2021 the Biden administration removed the China initiative, an investigation of PRC influence in U.S. institutional systems, from the focus of the U.S. justice system.

Yet today, the Biden administration announced the arrest of two Chinese nationals, and the indictment of 11 more, for exactly what the Trump administration had feared:

(DOJ) In three separate cases in the U.S. Attorneys’ Offices for the Eastern District of New York and the District of New Jersey, the Justice Department has charged 13 individuals, including members of the People’s Republic of China (PRC) security and intelligence apparatus and their agents, for alleged efforts to unlawfully exert influence in the United States for the benefit of the government of the [People’s Republic of China] PRC. (more)

Court documents did not name the company; however, Reuters identifies the company as… wait for it…. Huawei:

(Reuters) – U.S. prosecutors said on Monday they have charged two Chinese nationals with trying to obstruct prosecution of a Chinese telecommunications company that a person familiar with the matter identified as Huawei Technologies Co Ltd (HWT.UL).

Prosecutors said the case is representative of a broader pattern of unlawful influence efforts by China and announced they had also charged 11 people in two other cases with spying for Beijing or intimidating Chinese dissidents.

In the case involving the alleged efforts to tamper with the Huawei investigation, prosecutors said two Chinese intelligence officials attempted to recruit a U.S. law enforcement agent to work as their spy. However, the recruit was actually working as a double agent for the United States.

Chinese nationals Guochun He and Zheng Wang were charged with trying to interfere in the prosecution, the prosecutors said. Court documents did not name the company, but the complaint referenced the same dates in which the U.S. unsealed its charges against Huawei, in 2019 and 2020. (more)

This about-face is rich coming from Deputy AG Lisa MonacoWATCH:

Xi Appointed for Life Thanks to Biden

Armstrong Economics Blog/China Re- Posted Oct 16, 2022 by Martin Armstrong

The United States under the Biden Administration appears to have done ABSOLUTELY everything they could to ensure that President Xi Jinping would be delivered a mandate to potentially rule for life as a major meeting wraps up in Beijing. With Biden claiming the US will defend Taiwan and Pelosi hopping on flights to Taiwan to assure the US will defend them, from a geopolitical analysis perspective, they were absolutely brain dead UNLESS they were deliberately telling China the USA wants war. The approval of this landmark announcement in a communique was established not since Mao Zedong and Deng Xiaoping had China authored a so-called historical resolution.

What the Biden administration has been doing is deliberately showing no respect for the dignity of China or Russia. But insulting both nations, their culture, and their people is only an invitation to war. China directly addressed that calling this “the great rejuvenation of the Chinese nation.” That was a direct response to the way they view the Biden administration which seems to be on a mission to screw the entire world. Never in international relations do you EVER insult the opposition, or call people like Putin a war criminal when a war criminal can never be applied to a leader based upon actions of those in battle.

Looking at this objectively, China was pushed into a corner by the constant rhetoric from the Biden Administration that China is an enemy – not a friendly nation. This not only imposes serious risks to Taiwan in the months ahead but also to Hong Kong. A closing in the Hong Kong share index below 13319 for 2022, will war of a major further crash probably into the 3rd quarter of 2023 if not into 2024.

North Korea Joins the Party

Armstrong Economics Blog/Uncategorized Re-Posted Oct 4, 2022 by Martin Armstrong

It is amazing to me that we seem to have complete idiots driving these events and they think that they can just intimidate whoever. All my sources state clearly that China and North Korea will join Russia against this climate change and authoritarian vision of a one-world government. Biden is incompetent and he just said he intends to run for a second term in 2024. Zelensky, who says whatever the Biden Administration writes on his teleprompter, that he will now only negotiate with Russia after they overthrow Putin. The theory that overthrowing dictators in the Middle East and the people will cheer us and celebrate with some ticker-tape parade has been the delusion of warmongers. They are once again doing the same thing in Russia, This time, the hardlines are not going to be as timid as Putin. My sources have NEVER been wrong!

North Korea has fired an unidentified ballistic missile over Japan demonstrating it could destroy Japan without repercussions. An escalation not seen in years prompted Tokyo to evacuate some residents as sirens blare for an airraid in the northern prefectures of Hokkaido and Aomori on Tuesday morning. Our models are showing January is a serious target in so many markets. This US attack on the Nord Stream is trying to completely undermine the economy of Russia to defeat it once and for all and the Zelensky change in demand for the overthrow of Russia is all counting on the US destroying its economy to force the people to do their work for them.

Many people have written in from around the world asking why none of this ever took place under Trump. The difference was that Trump was a businessman and he understood that only a vibrant economy will produce world peace as was the case under Rome. Onve all the provinces enjoyed free trade and the people prospered by being part of the Roman Empire which was a common marketplace, that produced the Pax Romana. The idiots we now have in power think that world peace is only accomplished by force of arms. This is a policy that is doomed and in the process, in every war, the civilian death toll is typically 10 times that of the soldiers on the battle field. Just one nuke hitting Philadelphia takes out New York City and Washington, DC.