China - the epicenter of a new global crisis


I have repeatedly referred to the serious report by the company "Mackenzie”, published a year ago, which was devoted to the global debt statistics, including data on its distribution by major groups of countries and such centers as China, the United States, and the euro zone. And of course, it showed the greatest achievements in the growth of China's debt, which accounts for 40% of the increase in world debt during the period from 2007 to 2014. That is, China, in general, began to do the same things that the Western economy does - inflating the bubble. Thus, the conclusion of "Mackenzie" was this: any of these centers could become the epicenter of a second wave of the financial crisis.

China in this regard shows that the "Mackenzie” experts are not mistaken. Two serious collapses of stock markets in China (June and August) marked a depreciation of the Yuan … Collectively; these signs are manifestations of deeper processes.

If we talk about the deeper processes, a global reversal of capital flows begins. If in the period from 2009 to 2014 the capital moved towards the periphery of world capitalism, and one of the main beneficiaries of this process was China, then in 2015 there was a 180-degree turn, and the capital flowed in the opposite direction.

In fact, the following is everything that made the United States do this: first they announced that they could raise the base rate, and then they raised it with symbolic significance - a quarter of a percentage point. And that was enough for the net outflow of capital from the periphery of world capitalism at $600 billion. This is roughly equivalent to the net outflow of capital (perhaps an even bigger number) from China. Actually, the main loser in this process turned out to be China.

The fall of stock indices and the depreciation of the Yuan are a consequence of capital reversal from China in the opposite direction.

Actually, today, the capital has especially nowhere to go. Everywhere has zero interest values, or even negative rates. That is, we will find ourselves witnessing some serious fractures in the entire system, and not just in the financial system, because the system will break down in regards to the whole economy and the policy as a whole. Already, there is a transition to a new world order. And most likely, it is not money that will be the main tool. Most likely, in the new world order, the main tool will be hard power.