In This Issue
Week of 8/19/2019
Vol. 24 Issue 26
At War, Part II
- China’s Military Takeover of the South China Sea
- Other Global Naval Chokepoints Now Dominated by the CRINK Alliance
- Recommended Reading
- Currency Changes vs. the Dollar
- International Markets
Quotes of the Week
- The INVNT/IP Digest
“The supreme art of war is to subdue the enemy without fighting.” – Sun Tzu (545 BC-470 BC)
Last week, in Part I, we provided the opening discussion of why we believe China is already fully engaged in a state of war with the US, its other trading partners, and, specifically, “inventing nations.” In Part II, we’ll provide charts, images, and other supporting data to help SNS members understand the breadth and depth of China’s efforts in asymmetric warfare.
For those who have yet to read Part I, we suggest starting there before proceeding.
As we were going into print last week, investors will know that the US and the UK both – at least temporarily – experienced inverted yield curves for the 2-year and 10-year bonds. This has not happened since 2007, and generally correlates with recession, which spooked Wall Street.
To simplify matters: what this really indicates is a sudden surge in international buying interest in long-term bonds.
We thought it worth a few paragraphs to address this issue.
Pundits interviewed in the aftermath of the resulting market selloff – including such well-known experts as Nobelist Paul Krugman – offered the following causes for the equity market selloff and the bond buying:
1. The “trade war” between the US and China is slowing down the global economy;
2. This trade war is causing a slowdown in the Chinese economy; and
3. Also a slowdown in the German economy.
Many SNS members understand that the pundits and media have missed the most important story in recent economic history, and in the process have gotten the reverse of the real story in the above reasoning.
First, we’ll make a strong statement: Wall Street patterns that are based on global finance prior to China’s rise should not be expected to be identical to post-rise patterns. After all, China’s dictatorship-directed InfoMerc model is anything but free-market, and has global effects.