There are those who dismiss the Chinese economy as a paper tiger, much like most of America’s military might.
Then there is reality.
Today, the global markets got a taste of reality with a golden warning shot:
At the end of the day, just this one action created the following:
Just for the sake of argument, if the PBOC and Chinese Communist Party could do this much damage from 4:11 a.m. ET until the market close, just imagine what else they could do.
Perhaps, in theory, during a period of military strife with the United States, an announcement like this occurs which shocks the world:
THE PBOC HAS SUSPENDED ALL PARTICIPATION OF AND IN UNITED STATES TREASURY AUCTIONS AND WILL NO LONGER AUTHORIZE ANY FINANCIAL INSTITUTIONS UNDER THE OVERSIGHT OF THE PBOC OR HONG KONG TO PURCHASE OR ROLLOVER ANY US TREASURY INSTRUMENTS
Think about an announcement like that around 10 a.m. ET just before a 10 year US Treasury auction for over $40 billion in bonds.
It’s not the actual participation, it’s the message which would destroy American markets for the weeks which follow.
Sleep tight America.
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