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
President Trump warns Google, Facebook, and Twitter that these tech titans now tread on troublesome territory.
Daphne Basel

2018-08-25 12:33:00 Saturday ET

President Trump warns Google, Facebook, and Twitter that these tech titans now tread on troublesome territory.

President Trump warns Google, Facebook, and Twitter that these tech titans now tread on troublesome territory. Specifically, Trump accuses Google of rigging

+See More
AYA finbuzz podcast offers fresh insights into the latest stock market topics, economic trends, and personal finance inspirations as of November 2019.
Daphne Basel

2019-11-26 11:30:00 Tuesday ET

AYA finbuzz podcast offers fresh insights into the latest stock market topics, economic trends, and personal finance inspirations as of November 2019.

AYA Analytica finbuzz podcast channel on YouTube November 2019 In this podcast, we discuss several topical issues as of November 2019: (1) The Trump adm

+See More
Former Fed Chair Paul Volcker releases his memoir, talks about American public governance, and worries about plutocracy in America.
Apple Boston

2018-10-23 12:36:00 Tuesday ET

Former Fed Chair Paul Volcker releases his memoir, talks about American public governance, and worries about plutocracy in America.

Former Fed Chair Paul Volcker releases his memoir, talks about American public governance, and worries about plutocracy in America. Volcker suggests that pu

+See More
AYA fintech finbuzz analytic report on the global macro economic outlook Winter-Spring 2020
Andy Yeh Alpha

2020-02-02 11:32:00 Sunday ET

AYA fintech finbuzz analytic report on the global macro economic outlook Winter-Spring 2020

Our fintech finbuzz analytic report shines fresh light on the current global economic outlook. As of Winter-Spring 2020, the analytical report delves into t

+See More
Global stock market investors foresee the harbinger of a major economic downturn.
Monica McNeil

2019-09-17 08:33:00 Tuesday ET

Global stock market investors foresee the harbinger of a major economic downturn.

Global stock market investors foresee the harbinger of a major economic downturn. Many stock market investors become anxious due to negative term spreads an

+See More
American state attorneys general begin bipartisan antitrust investigations into Apple, Amazon, Facebook, and Google.
Charlene Vos

2019-10-21 10:35:00 Monday ET

American state attorneys general begin bipartisan antitrust investigations into Apple, Amazon, Facebook, and Google.

American state attorneys general begin bipartisan antitrust investigations into the market power and corporate behavior of central tech titans such as Apple

+See More