This is unprecedented and in fact amazing. It's bad enough to put new Chinese IPOs like that which was recently requested by Chinese company EHang which is trying to build personal flying transport vehicles for rich people. The most that normal class people will be able to do is worry when they fly overhead but maybe some poor class people will make a few bucks washing them on occasion. Well, it looks like Trump might EHang them out to dry with this latest threat.
I'm not really sure what to think of this except that it is a smart political move by the Trumpster:
- US capital that is invested in Chinese companies cannot be invested in US companies. And Trump needs to keep the stock market bubble going as long as he can else he fears he will not get re-elected. This is why he is vilifying the fed. Trump called the markets a big fat bubble when Obama was in charge but now he calls it a healthy economy with record breaking everything. Of course if it wasn't a bubble it wouldn't need ever more stimulus in order to stay up. But it does.
- US capital handed to a Chinese company during the IPO would, at the very best, be used to develop a leading edge high tech product for which there seems no US competitor. De-funding this and other situations like it would seem to align with the new nationalism, America first, etc.
- US capital handed to a Chinese company during the IPO would, at worst, be funneled directly back to the Chinese state to repay any debt that EHang might have outstanding, and then EHang could fold. Trump does not want US money going to China.
- Trump needs the support of Chinese businesses to help him lobby against their leadership. This gives them something to complain about to Xi Jinping before they receive the Jack Ma treatment.
- CNN reports that Xi Jinping is near "economic exhaustion" with Hong Kong, the US trade war, etc. This new threat just piles on top of that in a very creative way. And when someone pulls something out of their ass like this, you have to worry what other shit they can pull out and sling at you. For every situation there is a straw that breaks the camel's back. While it is widely reported that Trump will lose in 2020 if the stock market crashes, I suspect that will only be true if all else remains equal. What if the stock markets experience a strong pullback but Trump ends up breaking Xi's back, and maybe even getting him deposed and putting in a much more US-compliant head of state? It might sound crazy but with pork prices running wild in a country that eats a lot of pork, hunger is more important than party. The news reports that the price increases were due to mass slaughter of livestock to prevent the spread of swine fever but I call bullshit on that. China would just kill and eat the meat and nobody would know. That's the Chinese way. They would not accept economic loss to avoid "maybe" something bad happening. Chinese are gamblers. They would roll the dice. This made up story was made up so that there will be something to blame on price increases. The Yuan has been slipping on the global markets because China's debt is catching up with them. Trump is "king of debt" and he knows they are vulnerable to collapse. So their currency is falling in value leading to higher import costs. I bet China's pig farmers have to import a lot of stuff to run their business. So they pay more to foreigners and when its time to export they sell for less because of the weak currency. I bet pig farmers are thrilled about that. Heck, maybe that's the reason for the shortage. Low prices made them decide there was a swine flu problem so they killed the pigs and dumped them in order to reduce supply. Don't laugh, French farmers spray their fields with cow milk they harvest when prices are too low for their liking.
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