Topic: China reopening was a flop, if we're heading to deflation, what about Bitcoin? - page 4. (Read 543 times)

Let's just say this is just the beginning. The problem with the Chinese economy is that it:
1. At its core, it is based on the production of consumer goods. Then the truth was added high-tech "toys"
2. Export-oriented
3. Has hidden internal problems
4. Doesn't adhere to "international norms"

All this leads to:
1. The domestic consumption market is falling, which means that production is declining. Further, you can write a lot more, but you yourself understand what chain of problems is starting
2. External consumers, who brought strong currency to the treasury, also reduced the consumption of Chinese goods. And here is the most difficult. Firstly, the United States took the vector to:
- stop supplying high-tech solutions to China
- move high-tech production outside of China.
- to the extent possible to recreate the production of high-tech products in their own country.
And this is a huge and yet unsolvable problem for the Chinese economy. Who will replace more than 50% of exports? India? Russia ? Iran? Do they have dollars? What about technology? NO one or the other!

So now we are seeing only the "tip of the iceberg", and within 2-3 years, if China does not come up with an extraordinary solution, we will actually see the decline of the "Chinese miracle".
Yes, despite the fact that "the second economy in the world", "the largest country", "the largest population" and "de-dollarization and the transition to the yuan" ...

Had to chop the title so it really sucks but I can't do better right now!  

With everyone focused on the debt of the US, the freezing Europeans, yeah lol, there is some really bad news on the horizon and for all sides in this game. If a slowdown in the Western world could be explained by jumping energy prices last year, prices that have since gone down to 2013 levels when it comes to pipe gas, in China manufacturing is dropping right after the reopening, at a continuous pace and despite the downturn in both raw materials and energy prices, copper, coal, iron, steel, wheat, everything is sliding with the PMI alongside.

So, to not be biased and using only the English version of the mouthpiece of the Chinese government:

China’s factory activity growth falters in March due to weaker demand, slowing production
China’s factory activity dipped in April on weak demand as bumpy post-Covid economic recovery continue
China’s official manufacturing purchasing managers’ index (PMI) fell to 48.8 in May from 49.2 in April

And things get worse, remember this is Chinese information, so take it with a grain of salt since it might be far worse:
So no manufacturing so now jobs for the not qualified, no jobs for the young ones that have finished college, which is a different area, and this can lead only to one direction.

If the economic slowdown is present everywhere, China and the Western World, manufacturing is affected on all continents there is only one culprit in sight, and that is demand destruction, and with this, there is a chance we might end in a deflation period if things don't change.
There is simply no demand, and with no demand, there are two choices, prices going down, which means obvious deflation, or bankruptcies which I doubt anyone is that stupid to do before trying the first solution, but the first choice is pretty hard to do when you just had an influx of free money and the rate rises have not yet started to be serious enough.

There is an interesting piece on this from Forbes:
https://www.forbes.com/sites/greatspeculations/2023/05/13/more-proof-deflation-is-the-future/
of course, it's just an opinion and I will from the start warn you it's a bit speculative even with the data presented but it ends with the same warning as many others on the incoming deflation, although their take on what to do and what next is really not my cup of tea.

Now, slowly turning from this to Bitcoin.

Bitcoin was mainly designed as a p2p way of exchanging and transmitting value, due to its limited supply it turned into a way of safekeeping your wealth and further down the line evolved into an investment!
Now, assuming all the required stars align and we really head into a deflationary period for fiat currencies, how will the price of Bitcoin react, since this is the only thing that can be affected by the economy, the rest, the p2p payments, the cold storage, the be your own bank will for sure not be affected, but lately those are of less interest and the focus is on the price most of the time.

For sure, Bitcoin has the required advantage to erase all fears, that is adoption, unlike other commodities it can still attract users, and since I don't really believe those hundreds of millions of users quoted by most sources right now I can safely bet in my mind an x10 adoption rate would be doable at any time from the current moment. But, the question is, will it happen in this short span with enough traction?

So, to make this long story short, two simple opinions:
- do you believe we're heading to deflation?
- how do you think the price of BTC will be influenced if we do so?