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Blaise's avatar

Will it be, as Celente says, when all else fails, they take you to war? Or is the East different? Certainly Celente's dictum applied to Tojo's Japans in the 1930s so maybe this is a universal thing....

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Gbill7's avatar

Three questions:

1) Does the Chinese data you’re analyzing break down by region or even by city? I ask because if there are huge differences in financial troubles between the different local governments (and their LGFVs) then socialism might require the more financially stable regions to bailout the ones in trouble. If so, resentment might build in the cannibalized regions enough to lead to a future political instability and maybe even revolt. On the other hand, if all regions have pretty much the same financial problems, then future revolt would likely have to come about through a different pathway.

2) Xi says deflationary results will not be ‘tolerated’. Does he actually have any mechanisms that would prevent this, without creating a new asset bubble, or draconian political measures?

3) You have previously written that deflationary problems in China would lead to some financial contagion in the USA. Do you still see that, and do you see it now being likely more severe, given the real estate and banking problems we currently have?

Thanks, Mr. Kust!

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