Thread by @DesoGames

AH fuck it, i'll join the bandwagon, since people asked (and i don't wanna type this story in DMs).

Thread🧵on #Evergrande!

Why #contagion will continue to spread, why Xi will NOT change course, why it's The Federal Reserve's fault, why Hyperinflation's next, and more!

First off, Why Now?

Evergrande's been Teetering for more then a year. Naturally, things have to come to a head at some point, but why now?

I think the answer is found in Commodities. Specifically the fact that building important stuff like #Iron and #Copper have been mooning.

To stem the tide, at $4,8 a pound copper, #China announced they would release metals from their strategic reserves to stop the price increases, and copper took a dive.

Reserves they ran up in July 2020 when the price was cheap, btw. China Copper imports were off the charts.

The key takeaway here, is that it dropped to $4,3... and stayed there.

China announced they would release MORE metals. It did nothing.

China announced they were committed to continue releasing metals from their reserves. That too, did nothing.

As late as September 15th, the price of copper was STILL $4,4 a pound. It has fluctuated up and down, but the trend has been sideways, not down.

I've commented on this *many* times, and i've said "This'll last as long as it'll last then the price will just continue up".

Meaning, China will just empty its reserves to a level where it can't afford to release more, and then the price just continues to go up.

Because it's not China that's making the price go up. It's the US.

It's $4,4 DOLLARS per pound.

And *AS LONG AS* the US keeps printing...

...that number will go up.

By virtue of there simply being more dollars to vie for limited amounts of goods.

And because #China is >the main export market for dollars<, it's China that is suffering the most from US inflation.

Think about it. They get value-losing paper.

The US gets value-increasing products, because the dollars they produce in exchange, are decreasing in value.

In short: Because the US is not exporting products, but Paper to China, while the Chinese export products back, THEY now have to pay MORE for *their own* resources.

- US orders product
- China buys materials to make product
- US buys product with Dollars
- China now has dollars
- China now orders product
- China pays *more* for less-available materials
- China now pays more for product.

What are they gonna do? Not-spend US dollars?

They reached the limit of that years ago when they stopped buying US bonds.

SO, why don't they simply stop taking US dollars?

Because the US and Chinese economies are intertwined. It's a two way street.

If they do that; WHO ELSE consumes as much as the Americans did?

Europe? Bitch please we're dealing with a zombie (bank) apocalypse here we're busy. And we already consume near our limit *coughitalycough*

China CANNOT pick up the slack and consume its own products. US GDP-per-capita was $68,309 in 2020, China was $11,819 in 2020!

As i've said before, it's the 1929 problem all over again.

If China as production engine of the world implodes, the US cannot consume products (prices spike), while the resource exporters have nowhere to export their resources (prices implode).

Except this time *it's inevitable*, because if China doesn't go as a producer in the 2nd step of the chain - the US losing all its purchasing power as the 3rd step *will inevitably cause the next Great Depression*.

So. What do? What could Xi possibly do to stop this?

China CANNOT force the US to stop printing. Nothing can, math says the debt has to be made worthless.

So what he CAN do, is Be First.


If things ARE going to collapse, then it's better to collapse them on HIS terms, and not the US's terms.

WATCH THAT CLIP!

Only then think "Education for social control", "Tech stocks leverage", "Overleveraged property developers". Also a Chinese accent.

But otherwise it could've been a CCP meeting, including Xi going "This is it! I'm telling you this is it!".

Again, if you want proof that this has been being prepared for for MONTHS; look at #Rhodium.

STAIR CASE PATTERNS ARE NOT LEGIT PATTERNS!

You know what downstairs are?

*Controlled Unwinding*.

Which was a smart move when i add today's rhodium chart (Trading economics is faster)

Rhodium's mostly traded in Asia. So when China said they were moving against speculators, *they weren't kidding*.

So for people waiting for an Evergrande Bailout:
It's not coming.

Xi's doing the *exact same* as with the virus:

HE. IS. LETTING. CONTAGION. SPREAD. ON. PURPOSE!

The virus was simple; why should his country suffer an economic collapse because of mandatory lockdowns, but not the rest of the world?

In the *middle* of a trade war?

Sociopathic, yes.

Guess what? *He is one*.

As are the people in charge of the US who can't stop printing.

With real estate it's no different.

Chinese real estate was always going to collapse.

Buuuut....

Canada, Australia, Germany, The US, New Zeeland, the UK, The Netherlands....

THE ENTIRE WEST HAS PROPERTY BUBBLES!

Because we keep printing money and it's going into housing.

If *ANY* of those bubbles go, ANY OF THEM;

The same thing applies. Consumption drops, China can't export its products or import expensive resources, and the Chinese bubble goes too.

Be first, be smart, or cheat. There are no smart solutions, and reality won't be cheated.

That's what Xi's done.

He told people to deleverage as much as possible going into this, in May.

He's crushed Tech stocks *before* evergrande slid with the education crusade, causing further deleveraging infront of this.

When SOE's were allowed to go under, that was the start.

Now it'll work in reverse:

China bought ALOT of foreign property over the last decade. It's also been one of the drivers of property prices, as the dollars China got were recycled into real-estate in other countries as well.

But what if THEY start selling? En-masse?

It'd collapse ALL BUBBLES AT ONCE.

Especially since at this pace of increases, a slowdown is enough, nevermind panic selling.

But how is China gonna do that without some mass conspiracy?

Easy. Margin call everybody by collapsing the property bubble!

Or to bring it all back around:

We're in a financial war between the US and China. We have been for quite a while.

And for a while, the US was winning, by getting something for nothing.

But that has increased the pain on China *so much* by raising commodity prices...

...that crashing them through killing real-estate, doesn't hurt so much anymore. Relatively speaking.

As with the Virus - China is betting they can recover faster then the weak, uncoordinated west.

And they're right about that too.

They've still got alotta gold. Does the US?

Yknow, just to add 1 more, i've found a good metaphor for what China's doing:

You can't fight a retard by being smart. Nothing that China can do that is smart, is going to counter the US printing money like a bunch of fucking retards.

Ya gotta punch em. Can't reason with em.