China’s Banks Are Running Out of Dollars

WSJ ^ | April 23, 2019 | Mike Bird

[BeauBo]

“The Fed is extending its overnight repo program for another month... This points to a liquidity problem in the market”

Demand is high for US dollars, as other major bond options have cut their interest rates (some to zero, or even negative), and as other major economies face a more recessionary outlook. Not enough dollars in supply for all those looking to get in.

Time for the Fed to increase liquidity.

[Lockbox]

Think which country and who’s citizens can stand the most pain. That would be China. The West without current Chinese manufacturing will shut down. The Chinese stop paying and cashing in the US Treasure notes will kill our financial market.

China can go back to a survival mode, can the West?

[Georgia Girl 2]

China is already in a slowdown that cannot likely be reversed. They have an aging population due to the one child law. Unlike America China got old before they got rich. They invested a huge amount of their wealth building ghost cities that are sitting empty and deteriorating. There is no country in the world that can go head to head with the US on a level field.

If the Chinese divest themselves of the $1.2 trillion or so of US treasuries where will they invest? $1.2 trillion is a drop in the bucket of our debt.

Manufacturers are fleeing china right now to return to the US and places like viet nam. So now we will buy from viet nam. It will not destroy the US. We have 70% personal consumption in this country.

[Lockbox]

Hong Kong has become the test case of how much pain China will absorb to have total control. Hong Kong is the important financial channel for China. This is worth watching, I think it will show China’s policy to deal with problems.