Downwardly-Revised GDP, Evergrande’s Crash, and China’s War

A risk-off event is coming, then probably a war.

Continued pitiful economic outlook

It is nice to see when truth goes viral.

The Atlanta Fed released some jawdropping data on their expectations for economic recovery. The GDP for the third quarter has been revised down from 5.7% to 3.1%. That’s right. Even though the Fed has been constantly trying to push the “economy is running too hot!” and “inflation is going way higher than expected!” narrative, the economy is already showing signs of not only non-recovery, but now disinflation, poor consumer sentiment, and a level of uncertainty never seen before. Disregarding the entire fact that we are in a crisis generation, and that a large portion of the country has gone mentally-insane as the government goes all-in on overreach and hyperoligarchic bureaucracy, how is a business supposed to feel like it can prepare for the future when the global supply chain continues to go from falling apart to kind of back together? How are they supposed to be hopeful when their government is interested in taxing them more? And making them become medical czars over their employees? Even if you’re in favor of the vaccine, you’ve got to admit that the narrative constantly changes and this does a toll on the psyche of the average business owner on what they should prepare for in this beautiful, brave new world that keeps being touted as “just around the corner” while the economy continues to tailspin.

And although I am definitely not a stock guy, it is very easy to point out some basic pattern-diversions:

Now this could all change by next week, but it is very curious that apart from a couple times since this trend has been made, the S&P500 has enjoyed a very simple move upward where the dips are bought and continue on the trend, except now. Now, we are seeing a hiccup, where the buying has lagged, and instead of returning to trend, is going sideways.

This is what we call uncertainty.

And the trillions a week in overnight repo collateral-demand from banks doesn’t make the bull narrative look any better.

While also the “job shortage” myth (JBM) maintains strong dominion over mainline conservatives and pro-free marketers alike, they seem to have learned from the Fed’s manual of if something doesn’t make sense, then it must be because people area lazy, stupid, or both mantra. Who am I kidding, Republicans have used this talking point for decades. The JBM is a consequence of not really some deep welfare state that has made people not want to work. No! The excessive welfare state is a reaction to an already lack of jobs willing to pay market-clearing wages! Sure, yes, as Academic Agent explains in this video, there’s a certain price wherein people are willing to work. And even from this very basic, Austrian Economics absolutist point-of-view, we can understand that Bob isn’t interested in taking the janitorial job or the linecook job if it means he can make, even just half of what he would trading his labor for money. Why risk working, when instead of forfeiting forty hours a week, Bob could safely stay at home, and draw the dole. Unfortunately, albeit that is true, and welfare doesn’t help, there is still a massive point that people are leaving out.

The JBM mixed up the causation with the effect. It’s not that welfare and excessive unemployment benefits create a lacking workforce. It is that the market is unwilling to pay a wage that people think are desirable to replace their guaranteed income from literally doing whatever they want. Getting rid of welfare will not really fix the issue of there already being a tight economy that can’t pay market-clearing wages. It will probably just put people out on the street. A lot of you will say, “Well good! It’s those lazy bums fault!” Yeah, sure, I guess. Blaming them and moaning about how you’re better than everyone, or how your daddy raised you to be some hardworkin’ proud Grillmerican doesn’t change much. Good for you, though.

See, the issues are so intertwined in a complicated web that no one can tell causation, correlation, and coincidence.

The causation is a broken monetary system that hasn’t functioned since 2008.

The correlation is that low growth tends to create a lot of depressing and nihilistic je ne sais quoi in our society from low entrepreneurship, emasculation of men, masculination of women, low birthrate, death of culture, little innovation, and absolutely no risk-on on the part of big money and smart money.

The coincidence is that we had a coofdemic which seems to have come at a wonderfully convenient time for our WEF overlords to push the Build Back Better propaganda and dehumanize any dissidents.


Evergrande: China’s Cassus Belli for War

However, all eyes have been fixed onto the absolute collapse of Evergrande. The company announced it would not be paying its September 20th bond interest. A company that was banned from issuing long-term commercial paper, and could only issue short-term, is now basically admitting it is on the verge of collapse, as China bulls quake in their boots and China bears wonder how this will be turned into Taiwan and America’s fault.

From France24.com:

"I'm worried about my apartment -- it was supposed to delivered before 31 October according to the contract," Kevin, a buyer in Jiozuo, central Henan province, told AFP.

"But I asked Evergrande a few days ago, and they said it may be delayed because they don't have enough workers. I don't have any other choice but just to wait."

Owning property has become an important social marker of wealth in China, and often considered a requirement for a man before getting married.

- 'I believed Evergrande' -

And even though we might have thought China had some bullishness built into their entire nation’s economic model, the fickleness of print production like there’s no tomorrow has revealed itself. The easy money lasted about 2004-2015, and ever since the production has slowed down. Sure, the average Chinese person is richer than ever, along with higher employment than ever. It’s just it is nowhere as easy to play off your bullishness for this economic powerhouse when the lies have become so blatant, when so many investors can be screwed over in the snap of Xi’s or his bureaucratic oligarchy’s fingers. Pre-2016, the numbers looked pretty great for them, aside from the slowing down production of buildings, and now tanking consumer confidence which is an obvious hint that there will be less people, and therefore, less need to produce at this alarming, exponential rate for decades and decades.

I haven’t really touched on the idea that the modern economy has this built-in natural deflationary pressure of low birthrate and technological advancement which leads to less need for innovation, therefore less need to produce, therefore less need for investment. It’s a topic for another time, but this is a very important point to take into account when the giant Ponzi scheme that the Chinese government and its many bookcooking corporations try to sell you some beautiful future that is not going to coalesce.

We have to stop pretending that anything after Repo Madness 2019 is the same world as before. And if not that, we especially can’t pretend that pre-March 2020 is the same as now. Before, you could kinda maybe tell yourself that growth was just around the corner, and that emerging markets were the place to be; Rwanda or maybe Ghana would be these speculative, albeit, thriving economies in just a decade or so. These dreams of a technocratic, peaceful world have evaporated. In fact, anyone who probably sold you that dream is probably, at best, a moronic inflationist, and at worst, a pro-vaccine mandate bugperson. Any vision of growth is gone. The only solution our midwit overlords have is some kind of transfer to this new Build Back Better dystopia, which they have, are, and will continue to fail at selling that narrative. They might convince a lot of us that it’s great, especially Boomers, but the fact of the matter is: we are in a different world. And for China, it is no different. The realization that they wouldn’t be some mystifying, global dominator through their sheer innovation, hard work, and maybe just a bit of a pinch of cheating and lying has turned them into psychopaths hellbent on appeasing their uneasy population, while still selling this old world myth (pre-2020) that they are somehow still strong and mighty.

The ship has sailed. We are in a global civil war, on many fronts it has already come to persistent rioting and civil unrest. For some, we have a little bit of time before it reaches that. For China, though, I think they’re using this new era of incivility and chaos to reinvigorate patriotism in their people, and they will use not only the giant global economic slowdown issue as a weapon, or the fact they hold the reins to the global supply chain, but the best power of all:

The fact that the United States is no longer efficient at being the de facto global dominator. And with protests erupting in their own country, the low growth disease finally becoming a reality among their own people, they will have a short window of opportunity to do something they’ve been waiting to do for seventy years: Invade Taiwan.

That’s right. Because right now, they have a window of opportunity. In this Brave New World, there is no longer a global superpower, there is no longer anyone saying “well we can’t do that because X country will annihilate us!” Nope. The US has officially recentered its enemy to domestic dissidence. They no longer have interest in destroying the Middle East, and scaring everyone with their big aircraft carriers. Instead, the focus will be back home. While General Milley has literally gotten away with the highest crime anyone could ever commit: conspiring against your own nation, betraying it, and siding with not just another nation, but an enemy, his approval of our new butch lesbian wokelitary will set a precedent that dooms the last days of the fallen American Empire. You see, not only does China have a military ready to fight, but they are patriotic men who look at us as the absolute clowns that we are, and the fact that we no longer have the cassus belli to fight against them.

So what better way to reinvigorate your people, than a war with a mortal enemy, who, though they wouldn’t be extremely hard to defeat, would give a big win for the CCP, especially since no one will interfere or send more than symbolic help. This is where things have changed. America is no longer a potent idea, and the US is no longer a legitimate government, because it’s only a matter of time that the other world-bully who doesn’t even care about the remnants of civil society, common law, and rule by law instead of rule by men completely genocides and destroys a small island nation right off of its coast.


Conclusion

From my own scrutinizing economic standpoint, China can’t do this for long, without the dollar. It relies on dollars, as does the rest of the world. The US has leverage over everyone, and that is that. Unfortunately, people like Peter Schiff, who are completely wrong on everything in terms of the future of the monetary system, and how it will all fall, realize one thing: money isn’t everything. Productive capacity is just as important. If China goes to war, uses its own supply lines as a weapon against us and the rest of the world, then we will be in trouble, too. It’s not like we can just wave the green pieces of paper at them like, “Heh! You don’t got this, now!” They, too, can wave shiny Nikes and silverware at us and call our bluff.

Now that Japan has had the biggest military drill since the Cold War, North Korea has gone back to the ballistic missile-firing, and China is fronting on Taiwan hard with military drills and domineering rhetoric, it’s hard to deny things are heating up. Unfortunately, like my last article, we do not know the end, but simply see the signs, and ladies and gentlemen, if what I have laid out here and in many of my articles aren’t signs, then I must be crazy.

At the end of last year, the elitist rhetoric was a return to normalcy. As we are nearing the end of this year, the rhetoric has become dehumanization. What’s next year? Genocidal rhetoric? At this point, the system is nearing a break, and the 99.9% of people who don’t pay attention to the daily New York Fed Reverse Repo Operations like I do can just look around and see it. It’s not that hard of an idea to grasp that China could be finally kicking things into high gear before their entire regime falls on them. If seventy years was a solid timespan for the Soviet Empire, then why wouldn’t it be for China? They’re not only in a low growth crisis that will stun innovation, but I guess what you’d call a reverse Malthusian Trap. This Evergrande crash, which will probably end up revealing a ton of unrecognized bad investments floating around in the Chinese economy, is also representative of how all that real estate that was supposed to be built, is now gone, or left for the distant future. However, as I have explained, the real estate and the growth probably aren’t even meant to be, as the revelation that the CCP State-God’s promises of well-paying jobs, opportunities for its citizens, and exponentially-increasing returns for investors finally settles on the mind of the average Chinese person, and the domestic and foreign investor.

A risk-off event is coming, then probably a war.

“In wartime, truth is so precious that she should always be attended by a bodyguard of lies.”

Winston Churchill