Blindspot #012 - China's collapse [NOT], and it's 2022 Taiwan take-down

Blindspot #012 - 06.10.21
—>> China's Collapse [NOT], And it’s 2022 Taiwan take-down? <<—

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Blindspot wants you to see the world others don’t.

It would seem as if every possible thing that could generate bad news headlines, and extreme asymmetric risks- is doing exactly that.

While the broad daylight collapse of Evergrande, one of China’s major property developers may not be a blindspot, it should be said that the underlying political strategy by way of which China is managing this crisis is the blindspot to pay attention to.

A deeper strategic review of internal Chinese policy reveals that President Xi Jinping is focused on delivering on his ‘Common Prosperity’ campaign, which will inevitably lead to curbing- and reigning in anything from speculative capitalism, to gaming, effeminate men, and celebrity culture.

Asia Times, for example, argues that, “The pressures facing Evergrande and peers put nearly 30% of China’s $14 trillion economy at risk.”

China is not buying into the Wall Street Washington mantra that has the world believe there are some companies that are ‘too Big to Fail.’ China will most likely allow Evergrande to fail, while doing its best through other statist interventions, to cushion the fall-out, and somewhat soften the blow on firstly the domestic economy, global bond and stock markets.

As explored in Blindspot #006, Part 2, Will the Kabul syndrome hit a US (imperial collapse) dollar close to you soon?, it is necessary to see developments in China in the context of US inflation, and off-the-charts levels of ongoing QE (Quantitative Easing//Money Printing).

But, and this is a BIG but - the Evergrande slide began in 2020 when the Chinese government introduced policy measures to curb speculation in the country’s booming (and dismally over-leveraged) property sector, and also to bring sky-rocketing debt levels of property developers under control. It is argued that with Evergrande, an avalanche of bankruptcies in the property sector will follow.

Blindspot warns that Western market assumptions of companies being ‘too big, or too grand, to fail,’ will not fly in China.

Instead, as seen in 2019, reported by Shirley Yu, China nationalised 43 major corporates that were on the brink of financial collapse due to speculation, and reckless rodeo activities by the cowboys of China’s communistic form of capitalism.

The latter actions were not ‘bail outs’ like those seen in the USA and Europe post the 2008 GFC. No, it is a case of the state not bailing out, but nationalising over-indebted companies, imprisoning and criminally charging executives, and in most cases completely gutting, and erasing the very memory of such companies and their errant speculative ways.

Furthermore, Blindspot peaks at hints that recent incursions by Chinese military aircraft into Taiwanese airspace is a precursor to events that may unfold in 2022. It is speculated that China is currently strategically testing Taiwan, while holding back on major military actions. It may mobilise forces after hosting the 2022 Winter Olympics (February 2022, Beijing) to recover what it sees as an integral part of Chinese territory. Nudge nudge, wink, wink...

Tat-ta Taiwan!

With this in mind, Blindspot looks into the predictions made by Armstrong Economics pertaining to two forthcoming panic cycles in politics, being the year 2022, and 2024.

According to Armstrong Economics this will be the first occurrence of panic cycles in politics since the 1930s. The latter provides some food for thought, seeing that we know what the panic politics of the 1930s ultimately bled to… (say no more).

The small joke about phase three, of world war three, in a previous Blindspot, might not have been a joke after all...

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