The richest one percent of this country owns half our country’s wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It’s bullshit. You got ninety percent of the American public out there with little or no net worth.
Gordon Gekko, Wall Street, 1987
Two ways to interpret the financial panic.
- It’s all the fault of China (slumping manufacturing, bloated stock market), Russian sinking ruble and the fading euro;
- banks are deliberately crashing the markets in order to get QE4 and mop up assets and the U.S. economy is seriously in distress;
If 1, then this is the proof that China is a paper tiger and cannot challenge the U.S. primacy.
If 2, then the collapse of the Chinese stock market means that Chinese investors will buy more gold and silver and that, within a few weeks, a flood of US bond sales will begin, followed by a real estate crash in Australia, New Zealand, Canada, California and London.
A paper tiger?
Gordon Chang, The Coming Collapse of China, 2001
Gordon Chang, The Coming Collapse of China, 2012
Gordon Chang: China Headed for Crash in 6 Months, July 1, 2013
Gordon Chang: China’s economy on the brink of collapse, January 7, 2014
When Chinese stocks crashed in mid-June, Asian markets were not particularly troubled and there is no reason to believe that they are much more concerned now.
It is clear that overblown headlines about the renminbi’s “plunge” were woefully misleading. Had China really wanted to grab a bigger share of world exports, it is hard to imagine that its policymakers would have settled for such a modest adjustment. China’s real motivation seems to be more far-sighted. The devaluation advanced China’s strategic goal of turning the renminbi into an international reserve currency – and, in the long term, into a credible global challenger to the US dollar… While much of the world was distracted by the putative threat of currency wars, China may have found a way to sneak its way into the SDR basket. At least for now, it seems that the country’s long-term strategy for the renminbi is on track.
China is not the problem.
are the problem.
The European, Russian, Chinese money trees have been shaken to shore up the status of the US dollar as a reserve currency
and now the international media are being used to induce capital flights towards London, Wall Street and the US dollar by a well-orchestrated campaign spreading the economic catastrophe meme through hysteric reporting about the health of the Chinese economy.
Will it succeed?
China, the European Union and Russia have been pronounced dead several times already, but they are still alive.
By contrast, the dollar remains weak and the US economy stagnant