Category China’s Central Bank

Dec 1 2022

China & the Future


Armstrong Economics Blog/Armstrong Economics 101

Posted Dec 1, 2022 by Martin Armstrong

COMMENT: Hello Marty !!
It looks like the ” China as a parking lot for cash has already begun. FXI going to the moon of late in spite of Xi & Co. cutting off their own economic foot to hide behind their troubles and blame it on the darn protestors to the folly, by golly. One thing I’ve learned over the years from you is that when one (You) declares things are gonna get nuts (from a guy who has seen way more then his share), don’t blink when human events exceed the retardation level of insanity (NOW!)

Thank You for your take on reality and truth, it is setting many free, and these are those who will pick up the pieces once the warring factions beat each other silly and dead.
Very Best Martin, much respect!

GB

REPLY: I know a lot of people do not like our forecast that post-2032 China will emerge as the Financial Capitol of the World replacing the United States. Some argue against me citing the protests and the form of government. Let me state as clearly as I possibly can. DO NOT assume that the current government in China will survive any more than the United States or Europe.

The last major political collapse was the birth of the United States, the French Revolution, and the surrender of the supreme power of the monarch in Britain and elsewhere. It was the fall of the monarchy and the world turned to a Republic.

I would like to see the world turn to reach democracy where We the People actually decide to go to war rather than these corrupt politicians who take bribes.

The fall of the United States is underway. The nation has become polarized and next will come separatist movements just as in the American Civil War which took place 86 years into the cycle (10 * 8.6) from 1775/6.

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All of this talk of a One World Government will end war is absurd. The former President of France stood before the EU Parliament and stated that was the same idea that led to the creation of the EU. One European government would prevent European war. Now they are trying to accomplish this using the United Nations.

Obviously, these people lack any understanding of history. Yes, Rome was one government and it lasted overall for 1,000 years. However, it had many civil wars and it even split into three empires during the 3rd Century.

Perhaps you will recall after the assassination of Julius Caesar in 44BC, Mark Antony and Octavian (Augustus) were together and waged civil war against Brutus and others. Then they too split and waged yet another civil war with Mark Antony and Cleopatra v Octavian and his general Agrippa.

Augustus became the first emperor in 27BC and then the Julio Claudian Dynasty lasted until the death of Nero in 68AD. Then another civil war unfolded. The empire then survived until the assassination of Commodus in 192AD launching yet another civil war that lasted 4.4 years until the rise of Septimius Severus. The death of his son Caracalla in 217AD sparked another battle for the throne for 2 years.

Obviously, one government doe NOT guarantees peace. The utopian nonsense these people are talking about is all a thirst for raw power and even the end of a Republican form of government where we the people will have no right to vote at all. Schwab and his WEF make it sound this is all for your benefit rather than those like Schwab who just want to control everything and everyone.

So when I say China will become the next Financial Capital of the World, make no assumptions. What we think is the solid world of politics as it is today will be no more on a global scale.

Nov 10 2022

China’s Central Bank Discusses Inflationary Fears


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

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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.