China’s Communist Party will impose a sweeping national security law in Hong Kong during the annual meeting of its top political body, criminalizing “foreign interference” along with secessionist activities and subversion of state power. This is directed at the protests for independence. It is a very dramatic and bold move that unquestionably undermines Hong Kong’s autonomy. This will threaten Hong Kong as a global financial hub and is already impacting the HK$ peg which may break in June.

This has been a 23-year run under the “one country, two systems” framework that has allowed the territory to enjoy a level of autonomy. That is coming to an end. Hong Kong’s political freedoms have been eroding, but now Beijing signaled that the national security law will be a new tool that allows it to directly tackle the political dissent that erupted on Hong Kong’s streets last year.

Hong Kong has been able to hang on thanks to the US Federal Reserve cutting rates. While this has eased the pressure on the Hong Kong dollar in the midst of this deepening political crisis intermixed with the Coronavirus Pandemic everyone is using for political gains globally, the clock is ticking on the peg.

The Hong Kong Monetary Authority is clearly running out of options. Under this new threat from the political changes, the question is how long its currency can hold the line appears shorter by the Day. For the past 37 years, the city has run a managed peg, tying the Hong Kong currency to the US dollar after a long stint being tied to the British pound. Right now, the greenback trades in a narrow band between HK$7.75-7.85.

Traditionally, when a nation pegs its currency to another, then the differences in market interest rates should be marginal at best. However, this interest rate spread between the greenback and the Hong Kong market rates is warning that the economic differences are surfacing. The demand for the Hong Kong dollar is shifting, and this brings the currency in short supply given the economic contraction due to the virus. Add this new political shift and the Hong Kong Monetary Authority will have little choice but to increase the supply of Hong Kong dollars in an effort to support the economy and try to prevent interest rates from rise in the face of a new political risk.

The pressure to crack the peg will begin in June.

QUESTION: Martin –
In the video link you see the blank answer by former Fed Chairman Bernanke when asked, in a 60 Minutes interview, as to where he saw unemployment going/peaking in the last crisis of 2008 (at minute 3:27). https://www.youtube.com/watch?v=sKx1BZd9bjQ
How do you best explain Socrates being able to pick up so far in advance, the heights that unemployment would reach in this crisis; rivaling or exceeding that of the Great Depression, even with this seemingly contrived “virus” being such a curve ball, out of left field?
I’ve been to a David Copperfield magic show before, but this latest call by Socrates beats any illusion I can recall from his show.
T

ANSWER: It is very difficult to Explain. Everything is connected. I learned with the Cycle of War that the computer was picking up the subtle movements of capital well in advance. It becomes clear that if you were going to start a war, you move your money in advance. This is what these people have been doing. I believe it began last summer with the sudden collapse in confidence in Europe. We ended up with the REPO Crisis hitting in September and they tried to excuse it as a freak event. But Socrates was correctly forecast that as well. At the May Rome World Economic Conference, I put up this slide as to the key issues to pay attention to – the liquidity crisis which manifested into the REPO Crisis because banks were no longer trusting banks.

You will also notice on that slide #3 the Political Chaos and the Rise of Authoritarianism. The computer is monitoring absolutely everything. You cannot hide from Socrates. My job is only to relay what it is showing. This forecast is not me personally. Major institutions and government call on me for they know it is the computer – not me personally. No human can possibly analyze global trends with such proficient skills.

I know it is hard for some to accept because everyone is used to analysts claiming they called this or that. Most of these people make one lucky call and then lose their shirt thereafter. NOBODY can be trusted with forecasting from a gut perspective. You can get lucky once, but not consistently.

I had inside info that there were elites who knew there would be a virus “coming” and sold out. That was my connection. Personally, I questioned that forecast of how could unemployment rise so fast when even in the Great Depression it took 3 years to reach 25%. NEVER in my wildest dreams would I have personally been able to forecast that unemployment would reach Great Depression levels in a matter of weeks. We cannot make such forecasts in reality as a human being. Anyone who claims they did is a fraud or it was some lucky guess. This has NEVER taken place in history.

Socrates was picking up everything. It works out the trend from these subtle movements. This is why I had stated from the outset this was FAKE, it was manipulated, and their claims this virus would last for 18 months was a fraud. We have every disease in the system and there is NO precedent whatsoever for any virus do that. I reported the timing was for the peak would be the week of April 6th. Again, that was no some personal guess. I reported how long SAR lasted. There was absolutely ZERO support for this virus extending to 18 months. That was an outright FRAUD and it was without any scientific support.

All I can say is that the trend can be determined by Socrates because like war, instead of moving your money ahead of an invasion, this time they were doing that ahead of the revelation that they would use this virus as a psychological tool to shut down the world economy for Climate Change but use the scare tactic of the virus to create a global lockdown.