This Monday President Trump asked national security adviser Robert O’Brien and National Economic Council Chair Larry Kudlow to send a letter to U.S. Labor Secretary Eugene Scalia, expressing the concerns from this administration that investing the Thrift Savings Plan (TSP), an asset of $4 billion of the federal employee retirement fund, in Chinese equities poses risk to the American capital market and investors. This letter also stated that some of these Chinese companies are involving in military activities and espionage threatening U.S. securities and abusing human rights.
Trump’s move to divest CCP’s companies was applauded by Miles Guo and his allies as a big victory of confronting the CCP. Mr. Guo is an outspoken critic of the CCP who has led the whistle-blower movements by exposing the rampant corruption within the CCP and the Chinese government. He is also one of the biggest supporters of the Chinese people who is determined to bring freedom, democracy, and the rule of law to his fellow countrymen. In the past 18 months, Guo has repeatedly warned the U.S. in his live broadcast that U.S. federal retirement pension and education pension funds must stop investing in Chinese companies. He said there are about a total of 700 Chinese companies enlisted in the New York stock exchange. About 99% of these companies were invested by the above funds. This presented great risks to US national security and American investors. He justified that these companies never allowed the auditing from the western accounting companies. There are huge fraudulent concerns in these companies. Those are state-own enterprises that the CCP can use them whenever it is necessary to retaliate against the US sanctions. It can simply use the debt insolvency or bankruptcy as the excuse and refuse to give the money back to the American investors. That will be a big blow to the Americans! It is unimaginable to think that millions of Americans will lose their retirement pensions and education pensions because of the CCP’s recklessness.
General (Ret.) Robert Spalding, is a senior fellow at Hudson Institute who is a former China strategist for the chairman of the Joint Chiefs of Staff and the Joint Staff at the Pentagon, as well as a senior defense official and defense attache to China. Being Mr.Guo’s strong ally he also expressed his deep concern on several occasions. He mentioned that the emerging markets Index increased its weighting from five to twenty percent and that results in a significant amount of money going to China in 2020. This means almost a trillion US dollars will go into China’s stock market and those are the money coming right out of Americans’ retirement funds. Some of these Chinese companies are heavily involved in the military activities of PLA in the South China Sea, building the islands or building aircraft carriers. They also helped the oppression of millions of Uyghurs in Xinjiang. U.S. Department of Defense is sending Navy ships within 12 nautical miles of those illegal islands in the South China Sea while the public employees of the United States are investing in those islands. It is insane to allow these things to happen to our nation and American investors.
Kyle Bass is the chief investment officer of Hayman Capital Management, who is a strong critic of the CCP. He is also the chairman of the Rule of Law Foundation, which was founded by Miles Guo in 2018. This foundation aims to help the people of China to live under a national system based on the rule of law that is free of CCP’s terror and oppression. Mr. Bass has joined Bannon’s War Room early this week and shared his opinions on President Trump’s recent decision “we give them (CCP) all the blood to grow the CCP tumor is in US dollars and all we’ve got to do, my prescription to the administration is very simple, is leveling the playing field. Stop giving Chinese companies and other foreign companies a free pass who is not filing audited financial statements here in the United States. Force everyone to follow the same rules that our companies do and then we will immediately level the playing field.”
When Steve Bannon asked Kyle Bass what he would recommend to President Trump, what are the two or three things he would tell him that he must do today for the U.S.to win the economic war against China, Mr. Bass replied “He needs to pick the phone up and call Jay Clayton at the SEC and he needs to say Jay Clayton you must require all foreign companies to adhere to U.S.audit standards. The second thing is that I would tell him to do is, as far as Wall Street’s concern, tell him to call the Department of Labor and have them rethink administratively what the definition of the prudent man’s standard is for having private pension funds invest all over the world with US dollars.”
At the end of the show, Mr. Bass said to Bannon “Steve, it’s so important we’re never gonna out lie, out cheat, out steal or out bribe the CCP. They’re the best in the world at this. All we need to do is to enforce the U.S. rule of law. That’s what got us here. That’s one of the strengths and the bedrocks of our country if we just follow enforcement.”
Rorger Robinson, the header of Prague Security Studies Institute, Bannon described him as “headed up as a young man economic warfare on the National Security Council under Ronald Reagan”, talked more of the details on what the problem was and what President Trump did at the “War Room”. He told Bannon ” it was long 11 months, Steve, but we got to the goal line. The president has broken the code in the last 24 hours and before.”
He continued to elaborate on this topic ” The CCP’s single greatest secret is its ability to secure stealthily trillions of dollars of funding from about a hundred and sixty million or so American investors to finance the entire show. Outside of its export earnings, this has got to be the largest source of external funding that China has. They have come to our capital markets over the past 25-30 years and now have taken out in the way of fundraising over three trillion dollars by most counts from the equity and debt markets of the U.S.”
“They plan on trying to take out another two to three trillion dollars over the next 24 to 36 months so that’s the kind of thing we were facing. We’re talking about not just Chinese companies, but US sanctions Chinese companies, bad actors of PLA affiliated advanced weapons manufacturers, human rights-abusing companies that enable the concentration camps in Xinjiang holding a million and a half Urghyers. These are known hackers companies charged with espionage, companies building and militarizing the illegal islands of the South China Sea, weapon proliferators that helped Iran in North Korea with their weapon systems.”
Robinson also criticized that the complete determination of that five-person board of unelected bureaucrats called the federal retirement thrift Investment Board allowed that happen. He considered the board as the “wholly-owned subsidiary of Wall Street folks that were looking for fees and good relations with China and was standing by its guns to move that 50 billion as quickly as they could into that index.”
“The SEC is the lead agency for the investor protections of the United States and material risk disclosure is at the very heart of the SEC mandate. Chinese companies can avoid audits of the public company auditing oversight Commission (PCAOB)”, Robinson said ” China’s missing-in-action refuses to comply in the case of even releasing their financials so that people can get a look behind the black box of these companies. Jay Clayton and the SEC are permitting preferential treatment for Chinese companies over their American corporate counterparts. That’s a principle question that I have. And the second you have the issue of the bad actors. We’re not regarding even the U.S. sanctioned companies for national security and human rights abuses to constitute a material risk that needs to be disclosed immediately to prospective investors, who need to know that share value. The corporate reputation of those companies can be adversely affected by their bad actor status, building and militarizing islands in the South China Sea, and being charged with espionage in the past. Those are the companies on the entity list of the Department of Commerce the so-called blacklist for either international security or human rights abuses.
“Now the Secretary of Labor was instructed by the President to contact the chairman of the federal retirement thrift Investment Board telling him that it’s over that this is going to stop. I’m feeling very strongly about the fact that we pivot off of this TSP victory into the broader capital markets issues”, said Robinson in his last statement.
Bannon gave a big applause to Robinson at the end of the show saying “This is a major victory. Roger, it stuns me and I’m almost speechless when you laid the case out like that. How we could even possibly be doing this, but as you know, victory beget victory and Roger Robinson is always on to the next obstacle you have.” the first victory of the capital markets finally having understood that they represent the free people of the world free markets for free men and what they’ve done is helped enslave the Chinese people to finance the Chinese Communist Party.
Source: War Room Youtube channel