Categories: Bitcoin Business

Gloomy Stock Market Faces New China Taunt: We’ll Get ‘Last Laugh’

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A gloomy stock market must wrestle with China's latest taunt, in which it warned it would "fight to the end" and get the "last laugh." | Source: Don Emmert / AFP

By CCN Markets: China and the United States keep upping the ante. Presidents Trump and Xi are raising the stakes even further this weekend after a traumatic Friday for the stock market.

On Friday, China announced $75 billion in additional tariffs on American goods. Trump reacted by calling Xi an "enemy" and announcing further tariff increases of his own. He also ordered American companies to relocate their operations outside of China.

As a result, the Dow plunged 623 points. And it could get even worse next week. Late Friday evening, Trump again took to Twitter, this time threatening to invoke a national emergency to crack down on China:

For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!

China Strikes Back, Says Beijing Will Get 'Last Laugh'

China isn't taking all this provocation lying down. On Saturday, a pseudonymous opinion piece in a leading state-run Chinese paper stated that:

“China’s will to defend the core interests of the country and the fundamental interests of the people is indestructible, and will not fear any challenge."

The author continued saying that China would continue to fight for its interests until the end and that:

"History will prove that the side on the path of fairness and justice will have the last laugh.”

On Saturday, the editor of China's Global Times added more fuel to the fire, saying:

China has 'lost' the US already: all-round high tariffs, Huawei ban, political hostility, Hong Kong, Taiwan... We're facing a completely different United States. We have nothing more to lose, while the US is just starting to lose China.

Stock Market Poised to Suffer More Consequences

Trade war panic slammed the Dow Jones on Friday. | Source: Yahoo Finance

So far, the trade war has been heavy on rhetoric and lighter on actions. While the tariffs have led to a slowdown in the economies of both China and the U.S., we haven't seen grave economic effects... yet. However, we could be reaching a point of no return.

Hayden Capital Management's chief investment officer Kyle Bass, for example, is urging Trump to take the fight to the Chinese banking system:

It’s time for US to take our gloves off with the chinese communist party. @stevenmnuchin1 @SecPompeo It’s high time to SANCTION china development bank (CDB) for evading Iran Sanctions. Throw a stick into the spokes of their highly-levered banking system for crimes committed. 1/

China would certainly escalate beyond even its latest threats if Trump starts using emergency powers to sanction China's banks or execute other such far-reaching actions. Not surprisingly, investors are preparing for a bloodbath on Monday.

CNBC's Jim Cramer, however, notes that even in crisis, there is opportunity:

It might be a bloodbath for some industries but the money will flow to others... https://t.co/hT7BiL9Hs0

Will Bitcoin Shine Amid Gloomy Trade War?

While the stock market is on shaky ground, bitcoin could be a big beneficiary.

Historically, Chinese nationals have used crypto to help avoid that country's capital controls. With rumors that the Hong Kong dollar is about to devalue as well, crypto looks like an increasingly attractive safe haven as the trade war rhetoric intensifies.

As far as I can recall, this in fact is the first time $BTC reacts in real-time to any event outside of crypto.

Not all Chinese folks may race to crypto for safe-keeping their money, however. As we reported last week, the U.S. Treasury has blackballed the crypto addresses of alleged Chinese drug kingpins.

This article is protected by copyright laws and is owned by CCN Markets.

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

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