From the Brownstone Institute

By Peter St Onge 

China is going pear-shaped as Beijing panics and wheels out the “monetary bazooka.”

Cue the Worldwide inflation.

Just a few weeks ago I did a video about how China is on the edge of recession. Weeks later, the edge of recession has now progressed to a full-blown Chinese fire drill.

So What Happened?

Last week, China’s ruling Politburo held an emergency economic meeting and decided to crank up the money printers to 11, pumping money to consumers, to banks, to property developers, basically to anybody who might spend it.

Bloomberg called it an “adrenaline shot,” as in it’ll pump assets but won’t last long.

Specifically, Beijing’s going to dump about 3.8 trillion yuan – roughly half a trillion dollars – to keep the economy running.

A trillion yuan goes to consumer subsidies, including a hundred twenty US per month child subsidy – a hundred twenty’s big in China – to bribe Chinese mothers into having more kids, which they’ve stopped doing.

Next up are the banks – as always – who get a cool hundred and forty billion US along with another 100 billion dumped into stock markets.

Allegedly this is all to spur spending – as in the banks lend the money out and the stockholders feel rich – but it would do wonders for the gaping holes in China’s teetering financial industry.

Beyond the Money Dump

Beyond the money dump, China’s slashing interest rates across the board – which governments do to try and gin up some tissue-fire growth.

They’re slashing downpayment requirements on houses, opening a special credit facility so banks and hedge funds can gamble on stocks, and cutting the reserve requirements for banks – meaning banks can raid their vaults and go on a lending spree.

Put it together, and Beijing’s doing everything it can to get money out in the wild, down to bankrolling gamblers and pouring yet more trillions down the black hole of China’s comically over-built housing market.

You may have seen the ghost towns China’s built; here comes round two.

What Scares China

Why so desperate, you might ask?

Easy: China is panicked not only about a looming recession but that it might be falling into the Japan-style doom-loop of structural stagnation thanks to President Xi’s anti-business jihad.

The key number here is the interest rate on 30-year government bonds, which is a classic indicator of a zombie economy in the spawning.

Ominously, China’s 30-year just fell below Japan’s. Flirting with zombie territory.

What’s Next

Near-term, they’re popping the bubble in Beijing with stocks soaring.

And while 4 trillion yuan is a lot of money, this isn’t yet the Big Bang – that would be a long-rumored 10 trillion money dump by Beijing.

They’re not there yet, probably because the US and Europe haven’t hit the meat of their recessions. Debt-fueled Americans are still buying Chinese exports.

If and when that breaks down, either because Americans are out of money or Trump rolls out tariffs on China, Beijing’s up against the wall, and it will blow out into worldwide inflation.

China’s Turn for Chaos

I’ve mentioned in previous articles how if China goes down, the Chinese people won’t have a sense of humor about it. This ain’t Japan where people shake their heads and obey.

Beijing knows this, they know the kinetic history of the Chinese masses when they’re angry, and if they panic hard enough they may reach for a war to both distract the population and to clamp down on dissent.

Just this week they launched a massive military exercise in a disputed area of the South China Sea, there could be more to come.

Republished from the author’s Substack

Author

Peter St Onge

Peter is an economist, a Fellow at the Mises Institute, and a former MBA professor.

From LifeSiteNews

By Emily Mangiaracina

“Free speech is the bedrock of democracy. If people don’t know what’s going on, if they don’t know the truth, how can you make an informed vote?”

Business mogul Elon Musk declared during Saturday’s Trump rally  that he believes the upcoming U.S. presidential election is “the most important” we will live to see.

“I think this election is the most important election of our lifetime. This is no ordinary election,” said Musk, while alongside Donald Trump in Butler, Pennsylvania, the same location where the president nearly lost his life just three months ago.

The X owner praised Trump’s courage amid the assassination attempt, considering it a defining moment. “The true test of someone’s character is how they behave under fire,” said Musk.

“America is the home of the brave,” he continued. “There’s no truer test than courage under fire. Who do you want representing America?”

Musk went on to highlight what he believes are some of the most important issues at stake in this coming election.

“The other side wants to take away your freedom of speech. They want to take away your right to bear arms. They want to take away your right to vote effectively,” he said, pointing out that 14 states now do not require voters to show ID.

“Free speech is the bedrock of democracy. If people don’t know what’s going on, if they don’t know the truth, how can you make an informed vote?” he continued.

“That’s why we have the First Amendment,” Musk said, adding that the Second Amendment helps to preserve the rights listed in the First, to cheers from the crowd.

“President Trump must win to preserve the constitution. He must win to preserve democracy in America,” Musk declared.

The SpaceX founder went on to implore Americans to register to vote, and text “everyone” they know to ask them to register to vote and “make sure they actually do vote.”

“If they don’t, this will be the last election. That’s my prediction,” warned Musk. “Nothing is more important.”

During Saturday’s rally, the former president highlighted the goals of his hopeful next administration, including sealing the border, deporting illegal immigrants, making the U.S. energy independent, lowering inflation, and cutting taxes so that Americans can again afford the basics of living.

“No tax on tips. No tax on overtime. And no tax on social security for our great seniors. Inflation has killed our seniors…it’s just horrible,” said Trump.

He further pledged to “keep critical race theory and gender insanity out of our schools,” as well as “defend religious liberty,” “secure our elections,” and “keep men out of women’s sports.”

“From the very beginning of this journey, I’ve been on a mission to rescue our country from a failed and very corrupt political establishment,” said Trump.

“In that mission I will never quit, I will never bend, I will never break, I will never yield, not even in the face of death itself.”