China is now running stupid at 260% debt/GDP. In theory, China can borrow until the country sinks under a mountain of IOUs. But, odds are, sooner or later the gigantic debt load that China is building will destroy the entirety of the country — hook, line and sinker.
Consider the following stats of countries that China enjoys bountiful deficits and then tell me how sustainable they are, in terms of being a steady and loyal consumer base.
Hong Kong: US$321.5 billion (country-specific trade surplus in 2015)
United States: $260.3 billion
Netherlands: $50.8 billion
India: $44.9 billion
Vietnam: $41.3 billion
United Kingdom: $40.7 billion
Singapore: $25.6 billion
United Arab Emirates: $25.5 billion
Mexico: $23.7 billion
Spain: $16.3 billion
We hold all of the cards. With the advent of our Fed buying up Federal Debt, we have little use for China, other than to produce low quality shit for us. Trump knows this and understands that there’s a lot of negotiating power on this end — especially when a small reduction in US trade can cast such a deleterious effect on their credit standing it would literally leave them in pools of their own panic induced urine.
A strategist from HSBC discusses the many hurdles China will face in 2017. Make sure to pay attention.
China blow up good or bad for Treasuries?
Bad
http://ticdata.treasury.gov/Publish/mfh.txt
Jim (Rogers) Bow Tie one says buy China and he is never wrong.