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June 12, 2020 | Hong Kong & Sanctions
Martin Armstrong
QUESTION: Mr. Armstrong; Hong Kong is the source for US dollars for China. If Trump imposes serious sanctions, this would actually lead to a shortage of dollars in Asia. What do you see as a possibility in the middle of this madness?
HJ
ANSWER: The actual composition of the sanction from the United States remains unclear. The Trump administration is not likely to impose extreme sanctions against Chinese financial institutions. Such a move would cut them off outright from the US dollar payment system which is the foundation of the entire Swift network. In addition, it is unlikely that Trump would unleash a financial war with China over Hong Kong given the unsettled world economy at this point in time. It would not make sense at this stage to undermine the original phase one trade deal. There are political factions pushing for precisely that sort of response. I see them as the typical warmongers.
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Martin Armstrong June 12th, 2020
Posted In: Armstrong Economics