Continuation from yesterday……..If you are unaware, the US owes China $1.3 Trillion. With the US National Debt at over $17 Trillion, the US is one recession away from not being able to cover its interest payments. In a nutshell, the US doesn’t have the money to repay the Chinese. The only way out of this mess is for the US is to inflate its currency away. The FEDs have been trying to do just that over the last 10 years, thus far, without too much success.  Mostly due to a number of deflationary forces within the economy.

Based on my stock market timing and mathematical work, that is about to change. The FED will be successful in getting real inflation going after 2017. Slow at first, much faster after 2022. Basically, the US Government and the FED will be able to inflate away China’s $1.3 Trillion (or more) over the next 10-20 years.

That might not be a problem if China didn’t face a massive economic slowdown of their own.  Sparked by malinvestment, a massive housing bubble, an immense shadow banking sector and a host of other issues.  When commenced China’s financial crisis will take decades to fully play out and it will, in no uncertain terms, devastate the Chinese economy. The Chinese leaders will need someone to blame in front of their population and since the US will inflate its $1.3 Trillion away, China will point its finger where it belongs. Rightfully so.  Understandably, this will cause significant friction between the US and China.  In fact, it is highly probable that this economic issue will act as the major trigger point that will eventually set this Nuclear World War 3 off.

CONCLUSION:

As recent developments in Ukraine have clearly illustrated, the relationship between the USA and Russia can go from a “good working relationship” to the “brink of hostilities” in a matter of months. With both Russia and China increasingly seeing the USA and NATO as an invading and a hostile force, it becomes a matter of time before China and Russia announce a formal military alliance to counterbalance NATO.  That is the primary reason as to why the macroeconomic and geopolitical issues between China/Russia and the USA/NATO will becomes a major trigger point.  In fact, we will see most of the issues above come under increased scrutiny over the next few years. They will not get better. They will continue to deteriorate until the initial stages of the war are triggered around 2029.

To Be Continued On Monday……(Why Am I Seeing This On A Financial Website?)

What Will Happen When The US Inflates Away Chinese Debt Google

Continuation from yesterday……...In other words, both Russia and China are fed up with the US and NATO at this point in time. Further, given today’s geopolitical and macroeconomic situation there is very little hope for the situation to improve. Quite the opposite.  It is highly probable that the US relationship with both countries will continue to deteriorate as all 3 superpowers fight for their own interests.

“The enemy of my enemy is my friend”

If you are unaware, China and Russia are both “ex-communist” countries that have a long history of working together.  Until China reluctantly opened up its doors to the West after Richard Nixon’s visit in 1972, it was always expected that China and the Soviet Union would stand together. Vietnam War, North Korea, Communism Ideology, etc…. In fact, it wouldn’t be at all wrong to describe China and Russia having a “brotherly” relationship. You consistently see the evidence of that at the United Nations, where Russia and China tend to support each other on important international issues.

Most recently, while both the US/Russia and the US/China relationships have been strained, the relationship between Russia and China has never been better. In May of 2014 Russia and China signed the biggest ever gas and oil deal valued at more than $400 Billion.  Around the same time Russia and China conducted joint naval drills. Further, the working relationship between President Putin and President Xi Jinping is incredibly strong.  In other words, both Russia and China see their close ties and their ever improving relationship as a must to counterbalance the US and NATO.

In conclusion, both China and Russia are fed up with the US. On multiple levels. As the US and China/Russia relationship continues to deteriorate over the next 10-15 years, Russia and China will, once again, be forced to form an alliance. With the US and NATO flexing its military muscles on the Russian and the Chinese border, the alliance between Russia and China will eventually become a military alliance similar to NATO.

Economic Reasons:

Most wars are triggered by economics, not ideology.  For example, the Civil War was fought over the cotton trade and not slavery, the Revolutionary War was fought over excessive taxes and not the British rule and the WWII was triggered by an economic depression and war repatriations in Germany in the 1920s and the 1930s.

If you are unaware, the US owes China $1.3 Trillion. With the US National Debt at over $17 Trillion, the US is one recession away from not being able to cover its interest payments. In a nutshell, the US doesn’t have the money to repay the Chinese. The only way out of this mess is for the US is to inflate its currency away. The FEDs have been trying to do just that over the last 10 years, thus far, without too much success.  Mostly due to a number of deflationary forces within the economy.

To Be Continued Tomorrow…….(Why Am I Seeing This On  A Financial Website?)

The Enemy Of My Enemy Is My Friend Google