U.S. senators urge the Trump administration to prevent the IMF from bailing out several countries that face predatory Chinese loans.

Chanel Holden

2018-02-01 07:38:00 Thu ET

U.S. senators urge the Trump administration with a bipartisan proposal to prevent the International Monetary Fund (IMF) from bailing out several countries that face predatory Chinese loans. These predatory Chinese loans are part of the Belt-and-Road infrastructure development plan for the next decade. Belt-and-Road is a $8 trillion global infrastructure plan that the Xi administration now uses to expand its economic prowess around the world.

In effect, the Xi administration makes productive use of this infrastructure debt to control the economic policies in Asian countries such as Sri Lanka and Pakistan. President Xi intends to transform Belt-and-Road into a new world economic order with fresh and unique Chinese dominance.

U.S. State Secretary Mike Pompeo points out that at least 23 of these 68 Belt-and-Road countries now face financial debt difficulties. This debt distress signals the collective reliance of Belt-and-Road countries on China. Also, China holds about $1.2 trillion U.S. Treasury bonds, bills, and notes and hence can directly influence the U.S. yield curve. Should the Belt-and-Road countries fail to honor their principal and interest payments on their current debt contracts with China in the absence of IMF bailout finance, the Xi administration may unload its Treasury bond positions. In turn, China may effectively use its rich foreign reserves to entrench its current 260% public-debt-to-GDP ratio and Belt-and-Road infrastructure debt distress.

In the worst-case scenario, these ripple effects may inadvertently cause U.S. yield curve inversion. U.S. yield curve inversion reflects a negative term spread between short-term and long-term interest rates, indicates corporate investment sentiments with respect to mergers and acquisitions and capital expenditures, and hence often recurs in the early dawn of a severe economic recession. This red alert poses a major gray rhino, or some obvious highly probable negative incidence, in contrast to improbable black-swan rare events such as the U.S. subprime mortgage crisis, the European sovereign debt spiral, and the Global Great Depression. For these legitimate reasons, the Trump administration's advisors such as Pompeo, Mnuchin, and Kudlow need to alleviate this economic security concern in due course.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Carol Dweck describes, discusses, and delves into the scientific reasons why the growth mindset often helps motivate individuals, teams, and managers to accomplish more with greater grit, focus, and resilience.

Dan Rochefort

2025-05-21 04:27:10 Wednesday ET

Carol Dweck describes, discusses, and delves into the scientific reasons why the growth mindset often helps motivate individuals, teams, and managers to accomplish more with greater grit, focus, and resilience.

Carol Dweck describes, discusses, and delves into the scientific reasons why the growth mindset often helps motivate individuals, teams, and managers to acc

+See More

Management consultants can build sustainable trust-driven client relations through the accelerant curve of business value creation.

Monica McNeil

2020-11-17 08:27:00 Tuesday ET

Management consultants can build sustainable trust-driven client relations through the accelerant curve of business value creation.

Management consultants can build sustainable trust-driven client relations through the accelerant curve of business value creation. Alan Weiss (2016)

+See More

Stock Synopsis: With a new Python program, we use, adapt, apply, and leverage each of the mainstream Gemini Gen AI models to conduct this comprehensive fundamental analysis of Apple (U.S. stock symbol: $AAPL).

Laura Hermes

2025-09-13 12:23:00 Saturday ET

Stock Synopsis: With a new Python program, we use, adapt, apply, and leverage each of the mainstream Gemini Gen AI models to conduct this comprehensive fundamental analysis of Apple (U.S. stock symbol: $AAPL).

Stock Synopsis: With a new Python program, we use, adapt, apply, and leverage each of the mainstream Gemini Gen AI models to conduct this comprehensive fund

+See More

Our fun podcasts deep-dive into the current global trends, topics, and issues in support of better stock market investment decisions.

Daphne Basel

2025-02-27 07:24:00 Thursday ET

Our fun podcasts deep-dive into the current global trends, topics, and issues in support of better stock market investment decisions.

Our AYA fun podcasts deep-dive into the current global trends, topics, and issues in macro finance, political economy, public policy, strategic management,

+See More

President Trump promises a great trade deal with China as Americans mull over mid-term elections.

Laura Hermes

2018-11-13 12:30:00 Tuesday ET

President Trump promises a great trade deal with China as Americans mull over mid-term elections.

President Trump promises a great trade deal with China as Americans mull over mid-term elections. President Trump wants to reach a trade accord with Chinese

+See More

Stock Synopsis: Video games continue to take both screen time and monetization from many other forms of entertainment.

Becky Berkman

2024-10-14 11:33:00 Monday ET

Stock Synopsis: Video games continue to take both screen time and monetization from many other forms of entertainment.

Stock Synopsis: Video games continue to take both screen time and monetization from many other forms of entertainment. We are broadly positive about the

+See More