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