Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "The REAL Reason China’s Economy Is in Crisis Mode" video.

  1. The fact that a closed economy heavily based on exports is buying USD and liquidating their UST holdings when their economic production is not just stagnating but declining, is a clear indication that China is suffering a USD shortage. Why? Because when their economy was growing strongly, they were being paid in USD, and had enough surplus USD to buy USTs. Now they don't. And why? They making far less USD on as their exports fall as the global economy slows, and that also pulls down the value of their internal currency... It's a simple accounting equation, that any country who isn't the USA in the globalised financial system will have to negotiate, because USD is the major form of international money. And if you're a sovereign nation who needs liquidity - and China needs liquidity because most of its savings are locked up in illiquid assets like real estate and high-risk loans to keep their economic engine going - you have to turn to external sources of liquidity, and that means USD. So liquidating their own UST holdings to get more USD is their only option to get more liquidity. We know they're is a liquidity shortage from just looking at what statistics it does report, and the news coming out of China. If you ignore all the geopolical-driven sensitivities, and turn to math, it all becomes obvious. China wants to grow economic capacity within, to reduce its reliance on exports, but it still needs imports. And to pay for those they still need to provide USD. No drama required.
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