Thread by @Molson_Hart

Prediction: the US is going to economic war with China

Short thread on my thinking re: this video

tiktok.com/@financeyujie/…

1. She mentions that power has been cut in Guangdong and Jiangsu in Autumn, which is past peak power usage (for southern Jiangsu anyways) as Guangdong is pretty warm, they spend more power on A/C than heating. AFAIK power has not been cut in Shandong and north.

2. To me that indicates that it has nothing to do with a shortage. And in fact she says it has nothing do with a shortage (this woman who is pretty hot imo does not strike me as being unaffiliated with the government). She says it is 3 things:

A. It's to cut emissions. That...kind of makes sense, but not really because China's air really gets bad later when they have to fire up those power plants up north to keep people warm. But yeah, Xi wants to cut emissions so this is sincere.

B. It's to optimize domestic industry. I think China wants to be less reliant on exports and wants to spur domestic consumption. I have heard that the more tax you pay the more electricity you are getting. Who pays tax? Companies selling domestically. Who doesn't? Exporters.

C. This is a big fuck you to the United States (kind of justified in my mind actually). When the US prints a shit ton of money and gives it to companies as we did with PPP and all the other crazy programs, inflation happens. Period. To say otherwise is a violation the laws of

physics (ie conservation of mass). I don't care what these economics academics say. They're wrong. It causes inflation. By the Cantillon effect, inflation affects people different according to when the money hits them. The money got dumped to the United States first.

So what happened? American companies, flush with cash were able to bid up the prices of raw materials AND buy from Chinese exporters. Chinese got squeezed because their costs went up (most contracts are on fixed year long contracts) but their sales prices didn't.

Further, they get paid much later than they start production, let's say 3-4 months later. By the time the Chinese actually get the money, it's value has been inflated. Cantillon effect. Huge advantage to the United States.

So what is China going to do about this?

They're going to harm their exporters and shift them towards domestic consumption and then they're going to create big price spikes in the USA knowing that we're too slow-footed to know what's going on and knowing that inflation begets more inflation driven by human psychology.

Think toilet paper. There is no shortage. People just hoard it because it's never in stock.

So sorry for threading this out in a way that fucks your timelines but whatever.

/end thread

Bonus tweet: One thing I forgot to mention: China is sitting on massive amounts of US treasuries (another reason they are pissed that the USA printed mad coins) and they can use this money to buy coal, so don't tell me it's a coal shortage.