80% of China’s National Debt is denominated in USD. This means that the CCP wants the USD to hyperinflate, as the $1.7 trillion debt they owe would be much easier to pay

Sharing is Caring!

by magnora7

Most governmental debt in the world is denominated in USD, so the headline doesn’t apply to just China either: miro.medium.com/max/840/0*IquGcDF-q_pHTayP.jpg

If a government has a lot of debt, they may often try to “print their way out of it”, like Zimbabwe did, making their dollar worth less than the paper it’s printed on. When it costs a million dollars to buy a loaf of bread.

Take note of the important fact that their government debt is denominated in a currency that their government cannot control or print more of. Chinese foreign debt denominated in the U.S. dollar was 80 percent of the total, euros 6 percent, and Japanese yen 4 percent. (en.wikipedia.org/wiki/National_debt_of_China) This debt is 335% of their yearly GDP, which is quite high so they might not be able to secure more loans in the future.

See also  WEF Open Forum: Member of the Swiss National Council breaks down the need for 15-minute smart neighbourhoods

So it’s a rational business strategy, especially if experiencing financial troubles, to try and force hyperinflation in the currencies that their debt is denominated in, because it makes the debt very easy to pay. When a loaf of bread is a million dollars, $1.7 trillion becomes peanuts.

It’s interesting to think of the methods that could be used to generate inflation in a distant country, like trade wars, or creating financial crises that result in lots of money-printing. Or pandemics. 40% of the USD that has ever existed has been printed since this pandemic started, and we’re already starting to see the effects of the inflation…

Just food for thought. This idea is also interesting to consider in relation to Euro-zone countries that may want the Euro to inflate so they can pay off their Euro-denominated debts, like Greece for example.

See also  China’s Reopening Comes With a $720 Billion Inflation Bomb


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.