Could this spell global Armageddon?

Martin and Sean here with an urgent alert about the immediate threat from China.

Since coming to office, Donald Trump has demanded that China address its blatant theft of U.S. intellectual property, its gross trade surplus with the U.S., and its many stealth barriers to American goods.

But he just keeps hitting a brick wall.

After the U.S. levied 25% duties on $34 billion worth of Chinese goods last Friday, Beijing retaliated with similar tolls on the same amount of imports from the U.S.

That was bad enough.

But now, Trump has upped the game, announcing tariffs on another $200 billion worth of Chinese products.

That’s far more than the TOTAL U.S. exports to China, which were only $127 billion in 2017. It means that China has NO WAY to retaliate against the latest U.S. tariffs without resorting to other weapons.

And sure enough, a statement this week from China’s Commerce Ministry made precisely that point: It said China has no choice but to take other “necessary countermeasures.”

So what is China going to do?

Is it going to delay licenses for U.S. firms to do business in China?

It is going to block approvals for mergers and acquisitions involving U.S. companies?

Is it going to ramp up inspections of American products at its borders?

Sure. But none of those actions move the needle.

There is only ONE remaining weapon China has in its arsenal that’s strong enough to have an impact.

To deploy this weapon, China doesn’t have to pass new laws. Nor does it have to violate any kind of international treaty.

All the Chinese leadership has to do is utter one four-letter word:

SELL!

And this word alone is a surefire weapon that could bring America’s most critical financial market to its knees: the U.S. government bond market.

The U.S. government now has over $20 trillion in debt, mostly raised by selling Treasury bonds and other government securities.

And outside of the Federal Reserve itself, China is now THE single-largest owner of those bonds: $1.19 trillion worth. In other words …

The U.S. has allowed China to
become its BIGGEST BANK!

As long as China didn’t have its back against the wall, virtually no one — except ourselves and friends like former Congressman Ron Paul — seemed to care.

But now, suddenly, China’s stranglehold on U.S. bond markets is a real and present danger.

It positions China as America’s largest banker.

It gives China frightening financial and political leverage over the United States.

And it’s the ONLY way China can fight back.

What will happen when China starts
selling its huge hoard of U.S. bonds?

First, the obvious: U.S. bond prices will collapse.

Instantly thereafter, interest rates, which inevitably go up as bonds fall, will surge globally. Not just in the U.S., but also in European countries and in Japan, which are even deeper in debt.

Next, mortgage rates will soar in housing markets all over the world.

Finally, high interest costs will squeeze the economies of almost every nation on the planet.

But none of this should surprise our readers.

We’ve been warning all along that this would happen. We’ve said repeatedly that it is the No. 1 consequence of the most powerful financial cycles known to science — together with the ancient war cycle — all converging this year.  

Listen to our private call …

Just the other day — early in the morning — my colleague Sean Brodrick called me at my farm in Brazil. Listen to our conversation here.

We knew we had an obligation to warn you, our readers, of the crisis at our doorstep.

To explain why this convergence of historic cycles will cause events to quickly spin out of control ... how this will impact your savings and investments ... and how the four phases of this crisis will be your chance to cash in on four massive fortunes.

Our three emergency briefings start tomorrow — Tuesday, July 17.

We’re calling it ...

Financial Judgement Day:
Stunning Predictions for 2018-2022

These brief sessions will reveal how you can get through this with your wealth secure and growing … a "money moat" for your loved ones.

Click this link now to grab your free seat for Tuesday’s briefing.

Best wishes,

Martin D. Weiss, Founder
Sean Brodrick, Senior Editor

About the Contributor

Supercycles aren't daily occurrences. They happen in stages and can last for years. Sean Brodrick identifies them early and mines for the most financially sound stocks within them. And he taps into the powerful Weiss Ratings, along with our proprietary AI Performance Booster, to help him do it!

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