Evergrande and How About that Dollar Bear Market…
While it’s becoming easier to see how the various projects supporting the Great Reset are progressing just by reading the headlines and seeing how things are spun to manufacture consent, sometimes a story is deeper than the headlines.
I’ve watched the situation surrounding Evergrande’s collapse in China unfold like everyone else in this space. Like many of you, and hat tip to Zerohedge for being on this from the beginning, I could tease out some of the story just by following the progression of the headlines, especially in light of China’s big changes in attitude towards foreign capital.
Over the past 2 years China has cracked down on a number of sectors within its economy. It started with the moves on Hong Kong and the extradition law which sparked huge protests in the summer of 2019. It evolved into the curious disappearance from public life for months of Alibaba CEO Jack Ma. This summer we saw China uproot the cryptocurrency market by kicking out all of the bitcoin miners over a weekend, they’ve doubled down on this policy again recently.
In September 2019 I wrote that I thought China’s moves on Hong Kong were pre-emptive moves to undermine British influence there through the banking system. Because, the protests in Hong Kong last year looked an awful lot like Portland’s and Minsk’s and Kiev’s (2014) etc. etc.
There’s a color revolution angle here that hasn’t been openly discussed.
My working thesis at this point, and this is conjecture based on my intuitions, not journalism, is that the through-line here revolves around what can best be termed the British Deep State.
British oligarchy has deep roots in India, Israel, Hong Kong, Saudi Arabia and the U.S. intelligence and diplomatic corps. It has deep animosity towards Russia, China and Iran, far deeper than the U.S. does.
This is policy that goes back more than one hundred and fifty years. The City of London is the primary domestic obstacle to Brexit.
Hong Kong is a key cog in the West’s ability to control China’s growth, so destabilizing it now makes sense. The Hong Kong dollar is pegged tightly to the U.S. dollar and the arbitrage trade between offshore and onshore yuan is the source of a lot of ‘tail wagging the dog’ in financial markets.
It makes even more sense if China’s new extradition law was aimed at bankers and prop traders guilty of currency manipulation of the offshore Yuan trade than it is about ‘human rights abuses.’
Now, the Hong Kong dollar peg didn’t break and eventually things calmed down. That thesis, however, of the extradition law being about kicking out British ‘bankers’ who were really British Intelligence from Hong Kong tracks with everything that’s happened since then. The resultant riots were spun up to cover and/or stop this, possibly foment a color revolution there.
In the end it didn’t work.
Xi learned a valuable lesson about allowing Western ‘influence’ and money run wild on his shores. And he didn’t like it one little bit.
Now fast forward to today where he’s making similar moves to the ones Russian President Vladimir Putin made last decade to eventually destroy the color revolutionary forces mounting there — kicking out the foreign NGOs, cracking down on foreign ‘journalism,’ jailing oligarchs and rooting out IMF-influenced financial liberals at the Bank of Russia.
Sound familiar? After taking control over Hong Kong and putting all the ‘tall poppies’ on notice, Xi is removing the one child limit for families, outlawing metrosexuality in Chinese media, limiting ‘screen time’ for children and, most importantly, changing the rules for foreign investment.
He’s done this so aggressively and, apparently successfully, that none other than Societal Vampire himself George Soros has written not one, but two, op-eds recently denouncing Xi in Satanic terms.
Takes one to know one, I guess.
All of these things have something in common, rooting out all competition to China’s rollout of its digital yuan, which has been in trial usage for the past few months. I believe the story surrounding Evergrande’s collapse is part and parcel Xi’s strategy to remake the way capital is handled inside China.
So, building on September 5th’s Patron Market Report where I talked at length about Michael Every’s article on Xi’s relationship with Mao, Lenin and Marx himself, let’s dig in to what’s going on with Evergrande.
Shanghai exchange data showed the bonds sliding more than 25% to a low of 40.18 yuan after the resumption of trade on Monday afternoon. The company’s 5.9% May 2023 Shenzhen-traded bond , which was also suspended, fell more than 35% after trading resumed. China Chengxin International Credit Rating Co (CCXI) downgraded Evergrande and its onshore bonds to AA from AAA on Thursday, and placed the company and its bonds on a watchlist for further downgrades, effectively freezing the company out of the repo market.
The endgame for Evergrande started on Friday, when China Securities Depository and Clearing Co. (CSDC) reduced the “conversion ratio” of the July 2022 bond to zero, effective Sept. 7. Other Evergrande bonds were not included in CSDC’s table of conversion ratios on Friday as they no longer qualified for inclusion. The conversion ratio determines leverage limits for repo financing given a specific bond pledged as collateral. CSDC
Article from LewRockwell