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CORRUPTION THAT CAN BE CAUGHT IS JUST LIKE THE TIP OF THE ICEBERG . . . MOST HEAVY DUTY CORRUPTION CAN NEVER BE CAUGHT BECAUSE THERE IS NO QUID PRO QUO UNTIL THE TRAITOR IS NO LONGER IN OFFICE AND NO LONGER IN CHINA.|
For example, by overvaluing the Yuan, while Japan is devaluing the Japanese Yen, China is forfeiting hundreds of billions of dollars of exports that simply never get exported because China's price in dollars is higher than Japan's price in dollars. All that is needed is an "understanding" that those who are responsible for this astronomic transfer of export income from Chinese manufacturers to Japanese manufacturers will be rewarded "appropriately", communicated through trusted intermediaries, and the "deal" is set. When such officials later on retire with a clean name and unblemished record of uncorrupted service to the country, they or better yet, their children and grandchildren are then given well paying jobs by foreign firms, and their brokerage accounts abroad explode with profits made in the stock market, by the simple tactic of using their accounts to front run the accounts of other clients on a regular basis, mechanism of which can only be effected, even if not recorded in foreign brokerages. How can the Chinese government EVER discover such forms of corruption, unless the foreign handlers of these corrupt officials expose them for ulterior motives? Never.
So, what kind of ANTI-CORRUPTION DRIVE are we talking about, when the sharks and whales are beyond netting, and only the minnows and shrimps get caught and eaten alive?
Who is fooling who? The moment of truth is coming when the Fed raises the interest rate as Yellen has been telling US investors to prepare for by pricing in the rate hike into the price of the shares of stocks now. These investors are not listening to golden advice. The smart money has priced it in, and thus are now in cash mostly. The retail crowd ever looking for the easy profit is what is left in the stock market right now. The next move is a Fed rate hike.
Then, the dominoes will fall. If China keeps the peg at 6.20 Yuan/Dollar, Chinese products will be even more overpriced than US products, which are already overpriced relative to Japanese, Vietnamese, and European products, leading to factory closures, bankruptcies and layoffs. The real economy will cave in. If China THEN devalues the Yuan, Chinese factories that have been supplementing their cashflows from dwindling export revenues with foriegn-denominated loans will find it very difficult to repay their foreign-currency-denominated loans using depreciated Chinese Yuans, leading also to insolvency, factory closure, and layoffs. In short, there is no escape route for China's economy, which will collapse in either case. And if so, China's political stability will vanish, and its many territorial conflicts will suddenly flare up, as foreign countries take advantage of China's inability to respond to any challenge, economically, politically or militarily (which depends on funds to finance its logistics). In short, China has tied its own hands, and stuck its neck into the guillotine of a Fed rate hike. And there is no escape.