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OFF THE CUFF

Off The Cuff: Why Currency Crisis Is The Real Risk Here

The User's Profile Adam Taggart May 30, 2019
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In this week’s Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Tesla’s Woes
    • A harbinger of what’s coming for many other overvalued companies
  • How Bad Could A Trade War With China Get?
    • There will be lots of unintended consequences
  • Why The Smart Bet Is On Currency Devaluation
    • Governments will print forever to prevent catastrophic losses from happening
  • Recession Ahead!
    • The global macro data continues to look worse and worse

In this excellent discussion, Chris mentions “It feels like we’re so far down the state intervention pathway that I’m not sure that there is a way back to free and fair markets at this point in time. And it would take something fairly cataclysmic I think to upend that, something like an out of control currency accident for China, taking it out of their hands, for instance. ”

Which Wolf elaborates further on:

When social unrest threatens to boil over in China, the government makes the people whole.

So when you have a housing collapse in China, or when there’s starting to be a housing collapse or even a major downturn, I think you will see the government move heaven and earth to stop it. And they have that control, the four largest banks in the world are Chinese banks, and they’re controlled by the government.

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