Liquidity Crisis

CC China.jpg
Dear Friends,
It has been a while since I’ve had much to say about the Trump administration activities. Most has been covered by the press – both left and right. However, today, a new wrinkle, a possible devastating blow to the already shaky economy. The Trump court is considering prohibiting American investment in China – later the rest of the world? If this were to happen (a form of currency controls) one could imagine China cashing in the balance of its lending to the United States, the number now exceeding $1.0 trillion. Should that even be a short-term threat the repo market and all other markets will crash. The mere concept will impair liquidity in our economy in the coming weeks. Yes, Trump can then sanction China and not allow its debt to be redeemed. Imagine the then blow to the U.S. and the world economies. A loss of confidence in the U.S. having its debt, combined with unimaginable government spending and deficits would be a world we cannot now imagine.
Be you to the right or left, encourage your representatives in government to stop this folly.
Asher Edelman


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