Financial Blowout: It's Not China, It's London
China's Foreign Ministry and its government-run Global Times newspaper wasted no time and no words Friday, in rejecting the wild claim, made at the State Department on Thursday and by speculator Donald Trump, that China's policy had "caused" North Korea to set off a nuclear bomb test.
Another wild claim, circulated by many Wall Street and London speculators, also collapsed Thursday, of its own weight. This was the "wisdom" of the U.S. and European financial media that China's stock market, or China's currency, has been causing the global financial market blowouts of the first days of 2016.
Early Friday morning, according to these London and Wall Street soothsayers, China had finally managed to "do something right," remove curbs from its Shanghai market and stop pushing its yuan currency lower — and so, the market rout had ended. Later in the morning, the "wonderful" U.S. December jobs report was allowing markets to soar again, now that China's "clumsy mismanagement" had been cured.
The markets proved otherwise. Reeling under the impact of London's "bank bail-in" policy imposed across the European Union on Jan. 1, the European financial bond markets essentially shut down. The Frankfurt stock market plunged another 150 points; the Wall Street Dow-Jones, another 170. The oil price fell by another $2/barrel despite announcements of 20 more U.S. wells shutting down and the Saudi threat of more Mideast wars. U.S. Treasury interest rates, showing panic "flight to safety" of masses of funds, sank below what they were before the Federal Reserve "raised rates" Dec. 16!
It's not China, which is continuing to offer a "win-win" policy of infrastructure development and scientific and technological cooperation to all of Eurasia, and even to the United States.
It's London, whose head of the Bank of England designed the deadly "bank bail-in" policy which expropriates bondholders and depositors to save insolvent banks.
EIR's Founding Editor Lyndon LaRouche warned in late December that Jan. 1, 2016 would be made "doomsday" by this terminal austerity policy known as "bail-in," unless we shut down the Wall Street and London casinos outright, starting by restoring the Glass-Steagall Act to force.