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This is a deflationary spiral playing out in a predictable manner. First commodities declined, hard. Balance sheets and earnings fell. Real estate falling. E
by rrggrr 11y ago
This is a deflationary spiral playing out in a predictable manner. First commodities declined, hard. Balance sheets and earnings fell. Real estate falling. Equities now rocked, the effect amplified by fear and increasing uncertainty. There is about 2 trillion of US dollar reserves on China's balance sheet, and I am guessing that number will decline by half in the months, possibly years to come.
- shostack 11y agoWhat would you expect to occur in terms of impact to the US and rest of the world?
- rrggrr 11y agoChina probably will liquidate treasury holdings to fund their margin bank and other stimulus, and they will do it at a loss because global uncertainty is forcing yields down. Put simply, a lot of USD sequestered on China's balance sheet will find its way back into global commerce. Thankfully.