De-Dollarisation.

[andrewfi]

Moby, why do you burble on without taking the effort to learn anything? Too lazy or you prefer to try to dishonestly convince others?

It is illegal to pay directly for general transactions with dollars or euros.

IIRC section 11 of the document is the apposite place for the lazy to start reading.
https://www.bakermckenzie.com/-/media/files/insight/publications/2017/doingbusinessrussia/currency.pdf%3Fla%3Den&ved=2ahUKEwi6huHqrPzcAhXLpYsKHbmvBdUQFjACegQIABAB&usg=AOvVaw1B6QQ5RoT7puvSxi-9D8fb

Moby, some of us just know stuff, it is part of our lives, education and training. Don't ever try to be the brightest bloke in the room, it is pretty likely that you won't be. Much better to understand, as most of us do, that we can always learn more. And yes, systems such as PayPal do have specific exemptions for certain types of transaction but it is possible that you either misunderstood what you say you saw or, as has happened before with you, you are making up a story to support your fictional position. I do not know enough about PayPal's Russian operations to be certain, however your track record does leave one with a degree of scepticism as to the veracity of your claims.

[msmoby]

My friend told me to ask you: where does paypal seat its banking license. ?

Ask your friend to tell me - I have no idea

In the meantime, you and andrewfi  forgot to explain how it is possible to own a RU based paypal account and exchange Dollars - then withdraw in Roubles

Unlike you guys - we KNOW what and how a RU paypal account can be used

FYI:  The 'anonymous payment limit' is 15,000 per transaction and a limit of 40,000 R / month.  If one exceeds this limit - one has to send paypal the source of funds and this is passed on to the Russian tax authorities


Suggest andrewfi - gets a friend who understands Russian to get a Russian IP and try to open a Paypal account ....  it might save him further embarrassment ..

It is SO obvious from what he posts that he has zip experience of using paypal within Russia

[msmoby]

In the meantime, 'Trampu's using the greenback to wage economic warfare on Turkey is having a knock on effect to the Rouble - according to the Moscow Times

Personally, I'd love to see a stronger Rouble - but ...

https://themoscowtimes.com/news/russias-ruble-is-sliding-pulled-down-by-the-collapse-of-the-turkish-lira-62521

Russia's Ruble Is Sliding, Pulled Down by the Collapse of the Turkish Lira - the headline is a week old

[Wiz]

In the meantime, 'Trampu's using the greenback to wage economic warfare on Turkey is having a knock on effect to the Rouble - according to the Moscow Times

Personally, I'd love to see a stronger Rouble - but ...

https://themoscowtimes.com/news/russias-ruble-is-sliding-pulled-down-by-the-collapse-of-the-turkish-lira-62521

Russia's Ruble Is Sliding, Pulled Down by the Collapse of the Turkish Lira - the headline is a week old

The  face of the writer of this article...... looks very familiar........and I wonder?



Is it possible to be somebody we know?


 

[msmoby]

The  face of the writer of this article...... looks very familiar........and I wonder?



Is it possible to be somebody we know?


 

So, your eye-sight is failing you, too, Wiz ?

[andrewfi]

Moby, you were using a very specific case to try to convince us that you were correct about an issue in which you were totally wrong. That's normal for you. I have linked you (and others) to relevant information showing quite clearly that it is illegal for Russians to carry out normal domestic transactions in any currency other than the rouble. As you now know, from the same document, there are exceptions, such as indirect transactions.

The blah, blah, blah you added about declaring transactions through Paypal is irrelevant, except to the degree it demonstrates the government's oversight over the payment system and its overarching purpose - taxation - which is, incidentally, one of the main reasons for restricting non-rouble transactions in Russia.

Try, please try to stop being dishonest, not everyone is gifted with my patience and willingness to help. Your lies, dissembling and general dishonesty could end up misleading people in important matters when they, for example, make a trip to Russia.

Moby, try being honest, start with yourself, but we will all benefit from a less mendacious moby. I bet that even your current target would prefer to have a partner upon whom she can rely and trust.

[Wiz]

A leopard can't change its spots

As we all know....

"A person cannot change who they are (their character),
no matter how hard they try."



   

[Markje]

My friend told me to ask you: where does paypal seat its banking license. ?

Ask your friend to tell me - I have no idea

Obviously. Or you wouldnt attack Andrew with paypal as you do now. Paypal is a bank and using them your money always goes through luxembourgh. Hence non-internal to the russian federation. Even if both recipients are.

In the meantime, you and andrewfi  forgot to explain how it is possible to own a RU based paypal account and exchange Dollars - then withdraw in Roubles

Unlike you guys - we KNOW what and how a RU paypal account can be used

FYI:  The 'anonymous payment limit' is 15,000 per transaction and a limit of 40,000 R / month.  If one exceeds this limit - one has to send paypal the source of funds and this is passed on to the Russian tax authorities


Suggest andrewfi - gets a friend who understands Russian to get a Russian IP and try to open a Paypal account ....  it might save him further embarrassment ..

It is SO obvious from what he posts that he has zip experience of using paypal within Russia

all true and all irrelevant to andrews statements. See above

[andrewfi]

Moby, go for it matey, the honesty thing. Tell the boys and girls why you go on about PayPal and its minutiae when you do not understand the larger picture that makes your nitpicking irrelevant?

Are you trying to conceal the fact that you were, once again shown to be either ignorant or dishonest by distracting people's attention?

Moby, be honest with yourself and us. It would make your life better. Imagine how nice it would be if your favoured crotch inspector could ask if she looked nice in some clothes or other without having to post it publically for crowdsourced confirmation.

[msmoby]

Moby, try being honest,

andrewfi

Try to stop advising folks who KNOW and DO what you suggest is 'illegal '...  when it is quite common place, regulated and NOT illegal ...

Unlike you, I've seen PayPal's Ts and Cs in Russian, for Russia...  I did suggest you try...

All those years of you suggesting 'dishonesty' rather than dealing with your inability to understand that some of us live what you only theorise about ..

You'll excuse us ... far more important things to attend to than to read more bollox from you ...

[msmoby]

Paypal is a bank and using them your money always goes through luxembourgh. Hence non-internal to the russian federation. Even if both recipients are.

 

Your 'friend' failed you - naturally - I know A LOT - about how Paypal works, now

1/ Paypal in Russia are subject to the RFs laws - as would be CLEAR to you - if you bothered to do I I suggested and open an account as if in Russia...

2/ Paypal is NOT a bank .... believe me - I really DO know .. Please check

[AvHdB]

As a matter of principal I do not use PayPal. It represents the worst attributes of an American monopoly in my opinion.

Worth noting the European operations are based from Luxembourg the balance from the United States, Arizona. Though they have opened a branch in Singapore. From an American standpoint PayPal is not a bank. An early investor was E. Musk and the company was acquired by e.Bay long ago. Subsequently spun off by e.Bay. e.Bay has been the subject of a multitude of law suits, that they have lost, multiple times.

[Texan77]

It isn't "anti-American" to point out the damage the US and the dollar have done to the world. Or why your economy needs continual war to stay afloat. Or to discuss why the world must de-dollarise.

I'm sure Andrew can explain this better than me Cuffy, but my understanding is that China choosing to devalue their currency also brings down the dollar.

Also, as they don't borrow externally, and have so much less exposure as their own currency isn't yet as widely used abroad (which is rapidly changing), it doesn't really hurt them. It simply makes their exports more competitive.

A reduced oil price means the shale operations in the US go bankrupt. Which will hit the economy there, along with all those previously exported dollars coming home to roost.

Remember, China and Russia are de-dollarising. Add to that Iran. India, South Africa, Kazakhstan and today Kyrgyzstan. Heck, even Nigeria is de-dollarising.

I'd vote Trump if I were you. Let a businessman run the country so you can once again make stuff and export it instead of just printing money, selling each other services and starting wars. If you did that, you wouldn't need to try to rule the world with the dollar and your continual wars. Try exporting something other than death and dollars.

Interesting old post. What happened when oil prices fell they stop drilling new wells in the shale and pumped the old ones until they were dry. These wells have a short life and usually pay the loans back quickly. If they were not making enough to pay the loans the bank repo the oil project and sold them to another operator who was financially strong enough to wait for prices to go up. It seem that most operators did not go broke as this seem to be more propaganda to try to undermined the USA economy. Since this post the USA economy has only improves beyond anything I would of believed.

We are trying to stop exporting dollars and the rest of the world seems to be complaining. With tariffs is in hopes to reduces USA imports would mean that if we import less that we would we would export less dollars. China has even complained that it is illegal for us to try to control our imports thus saying that is it illegal for us to stop exporting dollars and propping up their economy.

What it is you do not understand it is a conspiracy to kill our manufacturing and force us to export dollars then use propaganda to complain like this is our way to control the world when it is really a Chinese led plot to destroy the USA.

Trump expressed in interest in import tariffs on the EU and they did not seem to want to live without as many dollars neither. The UK seem so want to export to as also and they seem to want to be controlled by more dollars. Turkey complain that we were imposing a tariffs on their steel and some products as a punishment. This means they will get less dollars and be less controlled but the USA. They do not seem very happy about it. It seem no one want to stop being controlled by our dollars by stop getting more of them.

[Wiz]

The  face of the writer of this article...... looks very familiar........and I wonder?



Is it possible to be somebody we know?


 

So, your eye-sight is failing you, too, Wiz ?

Poor Moby......

I am really feel sorry for you, you have no sense of humour what so ever, as a result of not been able to fly the kite, due to long spells of dry weather..... you have become like the Sahara dessert   

Don't worry about my good health because all my life I have followed the training practices of the Marathon runners. 

I suggest you call your friend, the AA for help, when your car is broken down! 

[Wiz]

It isn't "anti-American" to point out the damage the US and the dollar have done to the world. Or why your economy needs continual war to stay afloat. Or to discuss why the world must de-dollarise.

I'm sure Andrew can explain this better than me Cuffy, but my understanding is that China choosing to devalue their currency also brings down the dollar.

Also, as they don't borrow externally, and have so much less exposure as their own currency isn't yet as widely used abroad (which is rapidly changing), it doesn't really hurt them. It simply makes their exports more competitive.

A reduced oil price means the shale operations in the US go bankrupt. Which will hit the economy there, along with all those previously exported dollars coming home to roost.

Remember, China and Russia are de-dollarising. Add to that Iran. India, South Africa, Kazakhstan and today Kyrgyzstan. Heck, even Nigeria is de-dollarising.

I'd vote Trump if I were you. Let a businessman run the country so you can once again make stuff and export it instead of just printing money, selling each other services and starting wars. If you did that, you wouldn't need to try to rule the world with the dollar and your continual wars. Try exporting something other than death and dollars.

Interesting old post. What happened when oil prices fell they stop drilling new wells in the shale and pumped the old ones until they were dry. These wells have a short life and usually pay the loans back quickly. If they were not making enough to pay the loans the bank repo the oil project and sold them to another operator who was financially strong enough to wait for prices to go up. It seem that most operators did not go broke as this seem to be more propaganda to try to undermined the USA economy. Since this post the USA economy has only improves beyond anything I would of believed.

We are trying to stop exporting dollars and the rest of the world seems to be complaining. With tariffs is in hopes to reduces USA imports would mean that if we import less that we would we would export less dollars. China has even complained that it is illegal for us to try to control our imports thus saying that is it illegal for us to stop exporting dollars and propping up their economy.

What it is you do not understand it is a conspiracy to kill our manufacturing and force us to export dollars then use propaganda to complain like this is our way to control the world when it is really a Chinese led plot to destroy the USA.

Trump expressed in interest in import tariffs on the EU and they did not seem to want to live without as many dollars neither. The UK seem so want to export to as also and they seem to want to be controlled by more dollars. Turkey complain that we were imposing a tariffs on their steel and some products as a punishment. This means they will get less dollars and be less controlled but the USA. They do not seem very happy about it. It seem no one want to stop being controlled by our dollars by stop getting more of them.

Andrew posted this link...https://journal-neo.org/2018/08/20/washington-s-silent-weapon-for-not-so-quiet-wars/

I suggest your read it and learn how the money system works.
 

[msmoby]

as a result of not been able to fly the kite, due to long spells of dry weather..... you have become like the Sahara dessert   

A reference to sex ( or 'lack of it'), again ? . ..   Yup - our SoHs are somewhat  different .. You seem to have a fascination to prove you follow events in my life.. viz:
 

I suggest you call your friend, the AA for help, when your car is broken down! 

1/ The AA don't operate in the 'TRNC'

2/ Where the HIRE car broke down - after a weekend with friends up in the Troodos Mountains ....  Amazing, how friendly Turkish Cypriots / Turkish people are... during my wait for a replacement car - many stopped to offer help...

Wiz, here's a clue.. I am not interested in your life.... or photos .. 

[Markje]

https://www.rt.com/business/440482-russia-dollar-economy-dependence/

in short:
- Ditch dollar in internal processes like loans
- Create an alternative to swift together with china and Europe.
- Make the Ruble also part of the 'basket' to balance world finances

[cufflinks]

I have a lifetime subscription to Jim Rickard's Strategic Intelligence service - Rickards as a former Financial War Games consultant to the US Govt (CIA etc) to prevent the financial collapse of the USA & Rockefeller/Rothschilds CFR-UK Crown Globalists Debt or indebtedness schemes to keep the Crown's serfs (USA being the lead Financial Serfs) subjugated and too busy paying for their indebted lives with rent-seeking interest payable to the Crown's financiers and rentiers - I found Rickards new Special Report Upsell video actually thought provoking - would not put Trump past a US Dollar "Reboot" to offset the Global Debt Bomb imploding before 2020 Presidential Reelection.

WARNING heavy Infomercial like video/presentation material...

I would post the latest Strategic Intel updates but in a very long Q&A Interview type format... tedious to read as in TLDR.

https://pro.agorafinancial.com/p/AWN_dollarreboot_0717/EAWNUA82/

[Texan77]

I have a lifetime subscription to Jim Rickard's Strategic Intelligence service - Rickards as a former Financial War Games consultant to the US Govt (CIA etc) to prevent the financial collapse of the USA & Rockefeller/Rothschilds CFR-UK Crown Globalists Debt or indebtedness schemes to keep the Crown's serfs (USA being the lead Financial Serfs) subjugated and too busy paying for their indebted lives with rent-seeking interest payable to the Crown's financiers and rentiers - I found Rickards new Special Report Upsell video actually thought provoking - would not put Trump past a US Dollar "Reboot" to offset the Global Debt Bomb imploding before 2020 Presidential Reelection.

WARNING heavy Infomercial like video/presentation material...

I would post the latest Strategic Intel updates but in a very long Q&A Interview type format... tedious to read as in TLDR.

https://pro.agorafinancial.com/p/AWN_dollarreboot_0717/EAWNUA82/

What I think is likely to happen here is one more recession in the next year or two. When we come out of this recession we will see high interest rate world wide. Most of the countries will not be able to pay their debt without devaluing including the USA. In order to pay the debt there will be massive inflation after which will see some very large changes in the world as we know it now. Our Social security and Medicare programs will be inflated away. Countries will find it very hard and expensive to sell bonds. This is not just a USA problem. Jim Rickard  said in some of the stuff he came out with that a new global currency will be in IMF special drawing rights. I do not know if he still feels that way or not. I not sure the reset is going to be like that at all. Maybe just the money does not buy nearly as much.

World politics is becoming more radical. The left here in the USA is asking supporters to be come more violent. Right supporters can also get more violent.  This thing with Miss Ford and the supreme court is most likely something she just made up and supported by many democrats who know it is made up. There is a very large cover up to make it impossible to prove that this never happened. Now there are many women claiming made up charges against the Judge. During the next recession the country could become more destabilized  than most of us are used to.  If this is what it is like during the good times just think what will happen when it is not so good. 

Recession occur every eight to about 12 years. We are just due. WE now have oil going higher, Interest rates going higher, The federal reserve taking money out of the USA economy, Stock market extremely high, real estate prices going higher it is just waiting for something to go wrong anyplace in the world and it will not look so good.

Remember Jim Rickard is like all the other writers. He is not here to inform you he is in it for the money. The story lines are to make you believe you can not live without his service. It is pro Jim Rickard propaganda.

[cufflinks]

Another Report just came in even more dire than the Rickards Dollar Reset...

https://pro.moneymappress.com/p/MMRRECK5/EMMRUAJR/

Its only $5 as a teaser to their monthly Money Map Press Report which I may still have an active subscription to...

Key takeaways the coming debt bubble bursting this time $1.3T worth of Student Loans will collapse a global house of cards much more severe than 2008/09...

My company pays hundreds of thousands of dollars every year for up-to-the-second data from sources like Bloomberg, Thomson Reuters, and Statista.

We track millions of data points, market metrics, and indicators…

And we employ a full-time team of over 200 people to analyze all of it.

On most days, in most years, in most financial markets, this data is incredibly valuable in deciding where to invest your hard-earned money.

But this is not one of those days.

In fact, out of the millions of data points ranging from company earnings per share, to technical momentum indicators, to number of cars in store parking lots…

I’m only looking at one right now.

The strange indicator I mentioned earlier.

It’s called the Shiller CAPE Index.

It was pioneered by Robert Shiller, a Nobel Laureate and professor of economics at Yale. But you don’t need an Ivy League degree to understand it.

Simply put, the higher The CAPE Ratio is, the more the market is overvalued.
https://en.wikipedia.org/wiki/Cyclically_adjusted_price-to-earnings_ratio

A normal CAPE is around 16 and a great CAPE score could be as low as 4.

Which means that you pay $4 in stock for every $1 of earnings.

When the CAPE Ratio is high, it means that people are speculating on the markets, using credit and leverage to buy securities, and driving up the price past their realistic values.

Right now, the ratio is at 32.92 – nearly the highest it’s ever been in human history.

Which means for every $32 you spend to buy a stock in the markets, the company is only earning about $1.

That’s incredibly overvalued, and the stock market is more expensive now than it was before the Great Depression.

More expensive than it was before the crash of 1987.

And more expensive than it was right before the mortgage crisis of 2008.

It only gets worse from there...  Of course, the main reason why President Trump needs to do something drastic like the Dollar Reboot reset...

[Texan77]

I do not believe Trump has the power to reset the dollar like you guys are talking about even if he is wanting to. There is a very good chance the USA economy will not hold up long enough for him to get reelected. He is complaining about the federal reserve rates going higher which will be one of the things that will likely bring on the next recession. Trump's policies are inflationary and the Federal reserve feels it is there job to control inflation and it never ends well when they do it. Mortgage rates in the US are now climbing to 5 per cents. This is not really high but it is too high for the current pricing of housing. If rates go higher from here it will crash the housing market. Sometime it takes a year or two before sellers get desperate that the prices really decline. Housing is usually lags the economy but sales are already getting slower.

There is a current market sell off over these signs. Now look where the real problems are. look at China.   

https://www.msn.com/en-us/money/markets/the-stock-markets-67000percent-superstar-is-now-a-huge-falling-knife/ar-BBOeuQQ?li=BBnbfcL&ocid=SK216DHP

In addition to this one stock, the Chinese Shanghai Stock Exchange Composite Index has broken down thru key support this week. This has been my key to look out below in the USA.  I think the next recession I feel would start in China. I believe it is a house of cards and Trump is blowing on it. Its market is way down from 2015 highs recovered from 2016 lows bounce back to now fall below the 2016 lows again.

https://www.bloomberg.com/quote/SHCOMP:IND

The magical growth of China is likely coming to an end. The Chinese think tariffs are bad wait until the next recession comes. It will make tariffs look like nothing. Export will drop like a rock and not jut here but world wide. 

Many of the people here think this is a USA problem and wishing for the end of our economy to come. I do not think our Europeans friends are going to be happy when the next recession come.

[AvHdB]

I suspect some are confusing short term trends to long term realities.

[andrewfi]

Texan, you are a few years behind the times. Chinese growth has slowed, the economy has been reconfiguring for domestic consumption. The majority of Chinese growth is now from the domestic economy. In addition the United States is much less important to China than it used to be for either imports or exports and the export economy is becoming focused upon the region. I know that I have pointed out all this stuff to you and others more than once so I won't bother finding links, they are all on the forum.

The process of moving away from dollar hegemony has been going on for many years. I was writing about it in the early 2000's. It is self evident that these changes will be disruptive but the major stakeholders have been working to minimise the issues. Of course, the most significant disruption will occur in the US economy, the very act of dedollarisation tends to reduce the disruptive effects upon non-dollar economies.

Right now, of course, Trump's policies of sanctions and other economic weaponisation of the dollar is increasing the rate of change. We do not know if this is purposeful or accidental.

The biggest fear of non-dollar economies is kinetic warfare initiated by the USA and the window in which this has any chance of success for the US is closing but the risk increases and the window closes.

[cufflinks]

Trump Holds Cards in Trade War...

“China is caught in its own debt trap with no way out except inflation or default”...
“Trump will keep up the pressure; he never backs off and always doubles down. It will be up to Xi to blink and acquiesce in many U.S. demands”...

The Chinese economy is trapped, with few good options...

China’s Economy Is Failing
By Jim Rickards

I’ve written for years that Chinese economic development is partly real and partly smoke and mirrors and that it’s critical for investors to separate one from the other to make any sense out of China and its impact on the world.

My longest piece on this topic was Chapter Four of my second book, The Death of Money(2014), but I’ve written much else besides, including many articles for my newsletters.

Trump is putting tariffs on Chinese goods. China is striking back with its own tariffs, but it turns out that China doesn’t buy enough from the U.S. to match Trump dollar for dollar. China’s alternative is to cheapen its currency.

China’s economy is slowing and the trade war doesn’t help. Whether it’s the trade war, the currency war or the war of words, China’s weakness is under a spotlight. Trump has correctly spotted China’s weaknesses and is using them as leverage to get better trade deals and less theft of intellectual property.

The mainstream media narrative about the U.S.-China trade war implies that Trump is on a highly damaging ego trip and China holds all the cards. The exact opposite is true.

Trump has ample financial warfare weapons including tariffs, penalties, bans on direct investment, improved cyber-security, forced divestiture and freezing of assets.

Meanwhile, China has almost no room to impose tariffs. China’s vulnerabilities run deeper than that.

There’s no denying China’s remarkable economic progress over the past thirty years. Hundreds of millions have escaped poverty and found useful employment in manufacturing or services in the major cities.

Infrastructure gains have been historic, including some of the best trains in the world, state-of-the-art transportation hubs, cutting-edge telecommunications systems, and a rapidly improving military.

Yet, that’s only half the story.

The other half is pure waste, fraud, and theft. About 45% of Chinese GDP is in the category of “investment.” A developed economy GDP such as the U.S. is about 70% consumption and 20% investment.

There’s nothing wrong with 45% investment in a fast-growing developing economy assuming the investment is highly productive and intelligently allocated.

That’s not the case in China. At least half of the investment there is pure waste. It takes the form of “ghost cities” that are fully-built with skyscrapers, apartments, hotels, clubs, and transportation networks – and are completely empty.

This is not just western propaganda; I’ve seen the ghost cities first hand and walked around the empty offices and hotels.

Chinese officials try to defend the ghost cities by claiming they are built for the future. That’s nonsense. Modern construction is impressive, but it’s also high maintenance. Those shiny new buildings require occupants, rents and continual maintenance to remain shiny and functional. The ghost cities will be obsolete long before they are ever occupied.

Other examples of investment waste include over-the-top white elephant public structures such as train stations with marble facades, 128 escalators (mostly empty), 100-foot ceilings, digital advertising, and few passengers. The list can be extended to include airports, canals, highways, and ports, some of which are needed and many of which are pure waste.

Communist party leaders endorse these wasteful projects because they have positive effects in terms of job creation, steel fabrication, glass installation, and construction. However, those effects are purely temporary until the project is completed. The costs are paid with borrowed money that can never be repaid.

China might report 6.8% growth in GDP, but when the waste is stripped out the actual growth is closer to 4.5%. Meanwhile, China’s debts grow faster than the economy and its debt-to-GDP ratio is even worse than the U.S.

All of this would be sustainable if China had an unlimited ability to roll over and expand its debt and ample reserves to deal with a banking or liquidity crisis. It doesn’t. China’s financial fragility was revealed during the 2014-2016 partial collapse of its capital account.

China had about $4 trillion in its capital account in early 2014. That amount had fallen to about $3 trillion by late 2016. Much of that collapse was due to capital flight for fear of Chinese devaluation, (which did occur in August 2015 and again in December 2015).

China’s $3 trillion of remaining reserves are not as impressive as it sounds. $1 trillion of that amount is invested in illiquid assets (hedge funds, private equity funds, direct investments, etc.)

This is real wealth, but it’s not available on short notice to defend the currency or prop up banks.

Another $1 trillion of Chinese reserves are needed as a precautionary fund to bail-out the Chinese banking system. Many observers are relaxed about the insolvency of Chinese banks because they are confident about China’s ability to rescue them.

They may be right about that, but it’s not free. China needs to keep $1 trillion of dry powder to save the banks, so that money’s off the table.

That leaves about $1 trillion of liquid reserves to defend the Chinese currency if so desired. At the height of the Chinese capital outflows in 2016, China was losing $80 billion per month of hard currency to defend the yuan.

At that tempo, China would have burned through $1 trillion in one year and become insolvent. China did the only feasible thing, which was to close the capital account; (interest rate hikes and further devaluation would have caused other more serious problems).

This distress might have been temporary if China had managed to maintain good trading relations with the U.S. But that proved another chimera. The trade war, which has broken out between the U.S. and China has damaged Chinese exports and raised costs on Chinese imports at exactly the time China was counting on a larger trade surplus to help it finance its mountain of debt.

Now trade is under threat and China is stuck with debt it can’t repay or rollover easily. This marks the end of China’s Cinderella growth story and the beginning of a period of economic slowdown and potential social unrest.

The coming Chinese crack-up is not just theoretical. The hard data supports the thesis. Here’s a real-time data summary from the Director of Floor Operations at the New York Stock Exchange, Steven “Sarge” Guilfoyle:

The greater threat to financial markets will come, in my opinion from the slowing of global growth, at least partially due to the current state of international trade. This thought process is lent some credence by last night’s rather disastrous across-the-board macroeconomic numbers released by China’s National Bureau of Statistics. … For the Month of July, in China – Fixed Asset Investment. Growth slowed to the slowest pace since this data was first recorded back in 1992, printing in decline for a fifth consecutive month. Industrial Production.

Missed expectations for a third consecutive month, while printing at a growth rate equaling the nation’s slowest since February of 2016. Retail Sales. Finally showing a dent in the armor, missed expectation while slowing from the prior month.

Unemployment. This item has only been recorded since January. Headline unemployment “popped” up to 5.1% from June’s 4.8%. Oil Production. The NBS reported that Chinese oil production fell 2.6% in July and now stands from a daily perspective at the lowest level since June of 2011.

China will not report Q3 GDP until October 15. The National Bureau of Statistics reported annualized growth of 6.7% for the second quarter. Depending on the veracity of the data, one must start to wonder if China can indeed hang on to growth of 6.5% going forward.

This unpleasant picture Sarge paints is based on official Chinese data. Yet, China has a long history of overstating its data and painting the tape. The reality in China is always worse than the official data reveals.

This slowdown comes just months after Chinese dictator Xi Jinping was offered a dictator-for-life role by the removal of term limits and was placed on the same pedestal as Mao Zedong by the creation of “Xi Jinping Thought” as a formal branch of Chinese Communist ideology.

The Book of Proverbs says, “Pride goeth before destruction, and a haughty spirit before a fall.”

Xi Jinping now finds himself in precisely this position. His political ascension inflated his pride just as he now faces the reality of a falling economy and possible destruction of any consensus around his power and the lack of accountability.

Trump continues to tighten the screws with more tariffs, more penalties, and a near complete shutdown of China’s ability to invest in U.S. markets.

Only Trump and Xi can salvage the situation with negotiation and reasonable compromise on trade and intellectual property. But, Trump won’t blink first; that’s up to Xi.

Since the Clintons, the USA is the only country that conspired against its own manufacturers to allow China to dump $500 Billion a year of their cheap junk in the USA causing the elimination of 70,000+ US-based manufacturers.  Is post-Brexit UK going to buy a lot of China junk sure but not $500 Billion worth. With the arrogant Chinese implanting back door spy chips in their motherboards it has already set off alarm bells among major hardware buyers in the USA and elsewhere - Google Bloomberg for the sordid details - which is not the most pro-Trump organization.  Trump wants the Intellectual Property theft to stop and this will be another nail in their crooked Red Freaking Communist Chinese commerce coffin.

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VP Pence's Speech on Communist Red China:

THE VICE PRESIDENT: Thank you, Ken, for that kind introduction. To the Members of the Board of Trustees, to Dr. Michael Pillsbury, to our distinguished guests, and to all of you who, true to your mission in this place, “think about the future in unconventional ways” –- it is an honor to be back at the Hudson Institute.

For more than a half a century, this Institute has dedicated itself to “advancing global security, prosperity, and freedom.” And while Hudson’s hometowns have changed over the years, one thing has been constant: You have always advanced that vital truth, that American leadership lights the way.

And today, speaking of leadership, allow me to begin by bringing greetings from a great champion of American leadership at home and abroad –- I bring greetings from the 45th President of the United States of America, President Donald Trump. (Applause.)

From early in this administration, President Trump has made our relationship with China and President Xi a priority. On April 6th of last year, President Trump welcomed President Xi to Mar-a-Lago. On November 8th of last year, President Trump traveled to Beijing, where China’s leader welcomed him warmly.

Over the course of the past two years, our President has forged a strong personal relationship with the President of the People’s Republic of China, and they’ve worked closely on issues of common interest, most importantly the denuclearization of the Korean Peninsula.

But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.

China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.

Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.

In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”

In this strategy, President Trump made clear that the United States of America has adopted a new approach to China. We seek a relationship grounded in fairness, reciprocity, and respect for sovereignty, and we have taken strong and swift action to achieve that goal.

As the President said last year on his visit to China, in his words, “we have an opportunity to strengthen the relationship between our two countries and improve the lives of our citizens.” Our vision of the future is built on the best parts of our past, when America and China reached out to one another in a spirit of openness and friendship.

When our young nation went searching in the wake of the Revolutionary War for new markets for our exports, the Chinese people welcomed American traders laden with ginseng and fur.

When China suffered through indignities and exploitations during her so-called “Century of Humiliation,” America refused to join in, and advocated the “Open Door” policy, so that we could have freer trade with China, and preserve their sovereignty.

When American missionaries brought the good news to China’s shores, they were moved by the rich culture of an ancient and vibrant people. And not only did they spread their faith, but those same missionaries founded some of China’s first and finest universities.

When the Second World War arose, we stood together as allies in the fight against imperialism. And in that war’s aftermath, America ensured that China became a charter member of the United Nations, and a great shaper of the post-war world.

But soon after it took power in 1949, the Chinese Communist Party began to pursue authoritarian expansionism. It is remarkable to think that only five years after our nations had fought together, we fought each other in the mountains and valleys of the Korean Peninsula. My own father saw combat on that frontier of freedom.

But not even the brutal Korean War could diminish our mutual desire to restore the ties that for so long had bound our peoples together. China’s estrangement from the United States ended in 1972, and, soon after, we re-established diplomatic relations and began to open our economies to one another, and American universities began training a new generation of Chinese engineers, business leaders, scholars, and officials.

After the fall of the Soviet Union, we assumed that a free China was inevitable. Heady with optimism at the turn of the 21st Century, America agreed to give Beijing open access to our economy, and we brought China into the World Trade Organization.

Previous administrations made this choice in the hope that freedom in China would expand in all of its forms -– not just economically, but politically, with a newfound respect for classical liberal principles, private property, personal liberty, religious freedom — the entire family of human rights. But that hope has gone unfulfilled.

The dream of freedom remains distant for the Chinese people. And while Beijing still pays lip service to “reform and opening,” Deng Xiaoping’s famous policy now rings hollow.

Over the past 17 years, China’s GDP has grown nine-fold; it’s become the second-largest economy in the world. Much of this success was driven by American investment in China. And the Chinese Communist Party has also used an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfer, intellectual property theft, and industrial subsidies that are handed out like candy to foreign investment. These policies have built Beijing’s manufacturing base, at the expense of its competitors -– especially the United States of America.

China’s actions have contributed to a trade deficit with the United States that last year ran to $375 billion –- nearly half of our global trade deficit. As President Trump said just this week, in his words, “We rebuilt China” over the last 25 years.

Now, through the “Made in China 2025” plan, the Communist Party has set its sights on controlling 90 percent of the world’s most advanced industries, including robotics, biotechnology, and artificial intelligence. To win the commanding heights of the 21st century economy, Beijing has directed its bureaucrats and businesses to obtain American intellectual property –- the foundation of our economic leadership -– by any means necessary.

Beijing now requires many American businesses to hand over their trade secrets as the cost of doing business in China. It also coordinates and sponsors the acquisition of American firms to gain ownership of their creations. Worst of all, Chinese security agencies have masterminded the wholesale theft of American technology –- including cutting-edge military blueprints. And using that stolen technology, the Chinese Communist Party is turning plowshares into swords on a massive scale.

China now spends as much on its military as the rest of Asia combined, and Beijing has prioritized capabilities to erode America’s military advantages on land, at sea, in the air, and in space. China wants nothing less than to push the United States of America from the Western Pacific and attempt to prevent us from coming to the aid of our allies. But they will fail.

Beijing is also using its power like never before. Chinese ships routinely patrol around the Senkaku Islands, which are administered by Japan. And while China’s leader stood in the Rose Garden at the White House in 2015 and said that his country had, and I quote, “no intention to militarize” the South China Sea, today, Beijing has deployed advanced anti-ship and anti-air missiles atop an archipelago of military bases constructed on artificial islands.

China’s aggression was on display this week, when a Chinese naval vessel came within 45 yards of the USS Decatur as it conducted freedom-of-navigation operations in the South China Sea, forcing our ship to quickly maneuver to avoid collision. Despite such reckless harassment, the United States Navy will continue to fly, sail, and operate wherever international law allows and our national interests demand. We will not be intimidated and we will not stand down. (Applause.)

America had hoped that economic liberalization would bring China into a greater partnership with us and with the world. Instead, China has chosen economic aggression, which has in turn emboldened its growing military.

Nor, as we had hoped, has Beijing moved toward greater freedom for its own people. For a time, Beijing inched toward greater liberty and respect for human rights. But in recent years, China has taken a sharp U-turn toward control and oppression of its own people.

Today, China has built an unparalleled surveillance state, and it’s growing more expansive and intrusive – often with the help of U.S. technology. What they call the “Great Firewall of China” likewise grows higher, drastically restricting the free flow of information to the Chinese people.

And by 2020, China’s rulers aim to implement an Orwellian system premised on controlling virtually every facet of human life — the so-called “Social Credit Score.” In the words of that program’s official blueprint, it will “allow the trustworthy to roam everywhere under heaven, while making it hard for the discredited to take a single step.”

And when it comes to religious freedom, a new wave of persecution is crashing down on Chinese Christians, Buddhists, and Muslims.

Last month, Beijing shut down one of China’s largest underground churches. Across the country, authorities are tearing down crosses, burning bibles, and imprisoning believers. And Beijing has now reached a deal with the Vatican that gives the avowedly atheist Communist Party a direct role in appointing Catholic bishops. For China’s Christians, these are desperate times.

Beijing is also cracking down on Buddhism. Over the past decade, more than 150 Tibetan Buddhist monks have lit themselves on fire to protest China’s repression of their beliefs and their culture. And in Xinjiang, the Communist Party has imprisoned as many as one million Muslim Uyghurs in government camps where they endure around-the-clock brainwashing. Survivors of the camps have described their experiences as a deliberate attempt by Beijing to strangle Uyghur culture and stamp out the Muslim faith.

As history attests though, a country that oppresses its own people rarely stops there. And Beijing also aims to extend its reach across the wider world. As Hudson’s own Dr. Michael Pillsbury has written, “China has opposed the actions and goals of the U.S. government. Indeed, China is building its own relationships with America’s allies and enemies that contradict any peaceful or productive intentions of Beijing.”

In fact, China uses so-called “debt diplomacy” to expand its influence. Today, that country is offering hundreds of billions of dollars in infrastructure loans to governments from Asia to Africa to Europe and even Latin America. Yet the terms of those loans are opaque at best, and the benefits invariably flow overwhelmingly to Beijing.

Just ask Sri Lanka, which took on massive debt to let Chinese state companies build a port of questionable commercial value. Two years ago, that country could no longer afford its payments, so Beijing pressured Sri Lanka to deliver the new port directly into Chinese hands. It may soon become a forward military base for China’s growing blue-water navy.

Within our own hemisphere, Beijing has extended a lifeline to the corrupt and incompetent Maduro regime in Venezuela that’s been oppressing its own people. They pledged $5 billion in questionable loans to be repaid with oil. China is also that country’s single largest creditor, saddling the Venezuelan people with more than $50 billion in debt, even as their democracy vanishes. Beijing is also impacting some nations’ politics by providing direct support to parties and candidates who promise to accommodate China’s strategic objectives.

And since last year alone, the Chinese Communist Party has convinced three Latin American nations to sever ties with Taipei and recognize Beijing. These actions threaten the stability of the Taiwan Strait, and the United States of America condemns these actions. And while our administration will continue to respect our One China Policy, as reflected in the three joint communiqués and the Taiwan Relations Act, America will always believe that Taiwan’s embrace of democracy shows a better path for all the Chinese people. (Applause.)

Now these are only a few of the ways that China has sought to advance its strategic interests across the world, with growing intensity and sophistication. Yet previous administrations all but ignored China’s actions. And in many cases, they abetted them. But those days are over.

Under President Trump’s leadership, the United States of America has been defending our interests with renewed American strength.

We’ve been making the strongest military in the history of the world stronger still. Earlier this year, President Trump signed into law the largest increase in our national defense since the days of Ronald Reagan -– $716 billion to extend the strength of the American military to every domain.

We’re modernizing our nuclear arsenal. We’re fielding and developing new cutting-edge fighters and bombers. We’re building a new generation of aircraft carriers and warships. We’re investing as never before in our armed forces. And this includes initiating the process to establish the United States Space Force to ensure our continued dominance in space, and we’ve taken action to authorize increased capability in the cyber world to build deterrence against our adversaries.

At President Trump’s direction, we’re also implementing tariffs on $250 billion in Chinese goods, with the highest tariffs specifically targeting the advanced industries that Beijing is trying to capture and control. And as the President has also made clear, we will levy even more tariffs, with the possibility of substantially more than doubling that number, unless a fair and reciprocal deal is made. (Applause.)

These actions — exercises in American strength — have had a major impact. China’s largest stock exchange fell by 25 percent in the first nine months of this year, in large part because our administration has been standing strong against Beijing’s trade practices.

As President Trump has made clear, we don’t want China’s markets to suffer. In fact, we want them to thrive. But the United States wants Beijing to pursue trade policies that are free, fair, and reciprocal. And we will continue to stand and demand that they do. (Applause.)

Sadly, China’s rulers, thus far, have refused to take that path. The American people deserve to know: In response to the strong stand that President Trump has taken, Beijing is pursuing a comprehensive and coordinated campaign to undermine support for the President, our agenda, and our nation’s most cherished ideals.

I want to tell you today what we know about China’s actions here at home — some of which we’ve gleaned from intelligence assessments, some of which are publicly available. But all of which are fact.

As I said before, as we speak, Beijing is employing a whole-of-government approach to advance its influence and benefit its interests. It’s employing this power in more proactive and coercive ways to interfere in the domestic policies of this country and to interfere in the politics of the United States.

The Chinese Communist Party is rewarding or coercing American businesses, movie studios, universities, think tanks, scholars, journalists, and local, state, and federal officials.

And worst of all, China has initiated an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections. To put it bluntly, President Trump’s leadership is working; and China wants a different American President.

There can be no doubt: China is meddling in America’s democracy. As President Trump said just last week, we have, in his words, “found that China has been attempting to interfere in our upcoming [midterm] election.”

Our intelligence community says that “China is targeting U.S. state and local governments and officials to exploit any divisions between federal and local levels on policy. It’s using wedge issues, like trade tariffs, to advance Beijing’s political influence.”

In June, Beijing itself circulated a sensitive document, entitled “Propaganda and Censorship Notice.” It laid out its strategy. It stated that China must, in their words, “strike accurately and carefully, splitting apart different domestic groups” in the United States of America.

To that end, Beijing has mobilized covert actors, front groups, and propaganda outlets to shift Americans’ perception of Chinese policy. As a senior career member of our intelligence community told me just this week, what the Russians are doing pales in comparison to what China is doing across this country. And the American people deserve to know it.