“It’s clear to me that China is the biggest threat to the West and the United States,” says Kyle Bass. “China’s goal is global supremacy.”
Bass is the founder and chief investment officer of Hayman Capital Management and a founding member of the Committee on the Present Danger: China.
They want to lessen their dependence on the U.S. dollar. About 87 percent of global transactions that China settles are in dollars. They’re desperately short of energy, food, and basic materials. They have to buy these things every day around the world, and no one trusts their currency, and they still have a closed capital account. They have to use their dollars. So they’re trying to lessen their reliance on dollars.
They’re also exporting the Chinese tech stack all over the world. This is an app that tracks where you are, your name, your Social Security number: all of your identifiers.
They’re exporting digital authoritarianism. And it’s being overshadowed by the Russian invasion of Ukraine. How many articles have you seen on the e-yuan in the past three months? Almost none.
They’re basically forming an axis of authoritarianism between China, Russia, and the rest of the bad guys around the world. This war’s forcing a bifurcation of the world into the rules-based, rights-based West and the axis of authoritarians.
They have their own system in China. They have their own propaganda, their own economy, which is yuan-based. And then they’ve got their interactions with the rest of the world, which are essentially dollar-based. Internally, that economic tree can fall and no one might hear it because they can print as much money as they want. And they can fill the holes in the banks without causing crisis, but it’s important to note they’ve only had some sort of capitalistic-based economy since early 2000. The U.S. has been at it for more than 100 years. And look at how badly we screwed up in 2008.
They’re relatively new to this game, but they got to a point where the reckless printing of capital and real estate speculation took real estate to levels that actually are causing major population decline. In China today, the average birth rate per is now only 1.2 children. You need a 2.1 birth rate just to break even on your population. We already knew there would be a significant drop because of China’s former one-child policy.
But they allowed real estate prices to go so high that it effectively priced out the entire middle class. So what’s happening is Chinese men are living with their parents, they’re not marrying, and they’re not having kids. The birth rate’s collapsing, and it’s a direct result of rampant speculation in the real estate markets.
I think the Chinese government is intentionally taking prices back down, and they’re going to try to keep them there to change their population demographics over the long run.
They produce about 11.5 million barrels of crude a day. They export 8 million barrels and consume about three and a half, which means that the West is still sending Russia about $800 million a day. And that doesn’t include gas. Anyway, we haven’t effectively sanctioned Russia.
If sanctions are a primary tool, then we should immediately sanction their energy business, which of course would cause crude oil to move up maybe to $200 a barrel.
It would hurt us, but it would really, really hobble Russia. Russia’s production is already down about 550,000 barrels a day because some in the West have been reluctant to buy Russian crude. That’s having a huge effect on Russia’s production. Imagine if we fully sanctioned their energy business for six months. We could hobble their energy production and really cut the blood flow to the tumor.
You’re starting to see people wake up and say, “What are we doing?” People are finally saying, “Wow, these guys really are bad guys.”
You should invest somewhere where there’s a rule of law, where there are basic human rights, where at least you know that your money is safe.
It’s no bigger than the end of your finger, and it takes the recoil of a gun and immediately reloads the chamber and fires it. And it’s not only for handguns, but for assault rifles as well. It changes guns from semi-automatic to automatic.
Once China figured out that this could increase crime and havoc in the United States, they started shipping them here. Now it’s a federal felony to possess one, but criminals don’t care. They commit felonies every day. China and Russia are experts at creating chaos and sowing discontent. That’s their game.
And these full-auto sears are a real problem in the United States. They'll create more death, more destruction, and more crime.
