Michael Pento: A Trade War Truce Won't Fix China
The Main Stream Financial Media would love to have investors believe that the recent problems in the global equity market are all about a trade war with China. Therefore, everything can be made right just because Trump shook hands with Xi Jinping at the G-20 meeting in Argentina. But the truth is, China's problems are structural in nature-resulting from a centrally-planned economy that goads its citizenry into pre-fabricated urban areas in order to manufacture a pre-determined rate of growth. Nevertheless, what the Chinese government has actually accomplished is to produce a dystopia; one that was erected upon the largest percentage increase in debt the world has ever witnessed.
China is home to 18.5% of the world's population. In order to micro-manage all these people, the Communist government has engineered a mass migration from rural areas into urban pre-planned cities. The government claimed this would allow them to better distribute resources. But the government's biggest fear is a peasant's revolt. By moving people into highly populated urban areas where they can be placed under constant surveillance by over 170 million cameras, helps Xi Jinping sleep much better. It also helps him implement China's "Social Credit System," where people gain and lose points by conducting their lives in allegiance with government policies. This is not a monetary reward system, but one where freedoms must be earned from autocrats instead of ordained by God.
Michael Pento is a specialist in Austrian economics and is the President of Pento Portfolio Strategies. Prior to starting Pento Portfolio Strategies he served as a senior economist and VP of the managed products division of another well known financial firm. Michael has also created ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE. He is the author of The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market