The trade war with China is escalating.
But let’s step back and think about China’s true intentions.
China wants to become hegemonic world power.
China de-industrialized the West over the past 30 years. They have been exporting their overcapacity and deflation.
And two thirds of China’s population greatly benefited from this strategy.
But the trade war is not about the Chinese people. Most of them are good and hard working.
The real problem is Chinese totalitarian regime of the Communist Party.
And, the global elites around the world that helped them get to where they are now.
China has been around for 4,000 years. They had good runs and they had bad runs.
But the real reason they survived as a nation over the 4,000 years is very simple.
They know how to handle allies and they know how to handle bad guys.
How did they play U.S.?
China looks at the U.S. as a tributary state and they think of themselves as a more powerful neighbor.
China incentivized the elites to de-industrialize the U.S., particularly the Midwest.
Factories went, Wall Street made money and corporations benefited from it through lower costs…
There are studies that show a direct correlation between the factories and jobs that left for China and the opioid crisis.
And this is one of the reasons why Donald Trump is the President.
The real fact is U.S. has financed China. We have built China.
But does China’s economy have a good foundation?
I don’t think so.
Why?
Fed’s balance sheet in 2008, before the financial crisis, was $800 billion. It was $4.5 trillion on the day President Trump took office. The global elites inflated their way out of the financial crisis and the burden came down on the little guy whose wages stayed flat.
Today, the U.S. has $19 trillion of assets in their banking system which is definitely a lot, and not all of those assets are “good”.
However, China has $49 trillion of assets in their banking system… it’s a complete sham!
It’s a house of cards that will lead into a recession worse than 2008.
Nobody can sustain $49 trillion…
China’s reckless buildup of credit and slowing economy is a ticking time bomb.
Thank god their banks and derivatives are not linked to our banks…
So how should the U.S. deal with China?
We have to engage them in a direct confrontation. We are not going to take it anymore.
Tariffs are not about protectionism.
Tariffs’ nominal number is not very big. But President Trump is right. We are at an economic war.
And we are going to hit back to stop force technology transfers, we are going to put tariffs on and we will have the ability to liquidate companies like ZTE (to cut them off from their component parts in the West – they would be out of business in 90 days).
And this is why the NAFTA deal was so important.
The NAFTA deal is essentially setting up a geostrategic manufacturing base to counter East Asia. And Japan will very quickly become a part of it.
Japan will be a partner. Korea will be a partner. And EU’s Juncker has indicated that they will be a part of it too.
What President Trump has done in 2 years is reorient the entire supply chain away from China. And this will present an incredible economic growth opportunities.
And he’s done it against all odds.
What’s China’s next step?
First, they want a regime change in the U.S. They want to get rid of President Trump.
And they want to get a globalist like Sleepy Joe Biden into the White House.
Second, they want to ensure total control of South China Sea.
And that’s why it will be the hot spot for global conflict.
Why?
Because President Trump will NEVER back down.
The days of U.S. being pushed around are OVER.
And that’s why President Trump has to win in 2020.
