China making loans to other countries gives them 'enormous' global power: Dick Bove
Bove on China lending, taking on US dollar
Odeon Capital Group chief financial strategist Dick Bove on China’s attempts to gain global influence.
Odeon Capital Group chief financial strategist Dick Bove argued China’s system of lending other countries money has resulted in power and resources on FOX Business’ "Mornings with Maria."
US SAVINGS COULD BE USED TO PROP UP CHINA
DICK BOVE: It was clear that about seven, eight years ago, China and Russia made a deal to break the dollar. And it wasn't a simple set of ideas — it was well thought out. For example, China and Russia right now are acquiring a lot of gold. They both [are] two biggest gold miners in the world.
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They're taking time to basically lend money around the world. China has now loaned 140 countries money and they're getting a lot back for those loans. There's a tiny country called Djibouti, which is where Africa and Yemen almost come together, where there's a billion dollar U.S. Air Force base there. China has loaned that little tiny country, which has less than a million people, over 100% of their GDP. What they got as a result is they now have the first non, if you will, on the soil China military base located in Djibouti, right beside the American base. And in order to get to the American base, you've got to go through the port, which China controls.
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The country of Ecuador, basically owes supposedly $11 billion to the Chinese. What are the Chinese getting for it? Ninety percent of the oil output of Ecuador goes to China. But — far worse than that — if Ecuador misses a payment, China has the right to take any natural resource from Ecuador and keep it for China. So Ecuador, in essence, has become a China colony. So basically, through the use of their financial system through making these loans — and the Cato Institute estimates that 6% of the world's GDP is now oriented toward paying back China on its debt — as a result of making these loans, China is getting enormous power over countries all around the world.
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