China Makes War on the Baizuo

The CCP can inflict more pain on its citizens than than USG can on its citizens. Of Biden, Xi and Putin, who is most vulnerable?

Worth a re-post because yuan depreciation is on the table again: The Logic of Strategy: Yuan Devaluation and the Road to Trade War. I had the direction right, but the political trade war came before the major depreciation in the yuan thanks to Trump's surprise victory.

Which company would be better off today? The one who went all in on saving money in the short-term to hit their quarterly earnings target, or the one who look ahead a decade and diversified their supply-chain out of China, with a thought towards removing it entirely if necessary and onshoring as well? Companies are constantly dying because short-sighted, high-time preference managers run them. They are sociopaths who maximize the shareholder value for today's shareholders, like a tragedy of the commons if we think of the shareholders of that company owning a common resource. Family-run businesses worry about the grandchildren. Multinationals will sell "the grandchildren" into slavery if it means beating estimates by a penny.

As a bear, these high time preference idiots pay the bills, but I'd rather these people didn't exist, creating disasters for the entire society. The U.S. stock market is propped up by the Chinese supply chain and it is shutting down. The people in this video might as well be contract workers who make Apple phones being locked in. You'd think people would have learned from 2020, but apparently not.

China is engaged in political warfare against the Baizuo regime. The CCP knows it can handle a period of slow growth and they also know the Democrats will be wiped out in November if the U.S. economy sinks into recession alongside a crash in U.S. equity markets. People who say trade wars have no winners don't understand politics or human nature. All warfare is destructive. The purpose of warfare is to inflict more pain on the enemy such that he submits. The two ways to win a war are to inflict far more pain or be capable of withstanding far more pain. Trade war is no different, and economic damage in pursuit of a political goal is far more humane than guns and bombs. 

The goal of China's shutdown isn't coronavirus, it is to force its own companies off American customers in case the U.S. escalates sanctions, but I suspect the main target is the Baizuo regime. The mother of all self-inflicted whirlwinds is already hitting the USA with horrendous government policy, the woke mind virus spreading idiotic ideas like ESG in the private sector, and disastrous monetary policy. China doesn't have to do much to push the whole shebang right off the cliff, but it needs a good excuse. It's almost perfection that they are enacting the very policies loved by the Baizuo regime to destroy the Baizuo regime. Enjoy the show.