I had to smile that it will happen the first day of the "Year of the Horse." Here come the Revelation comments!!!
Reminds me of the “Who’s Line is it?” game:
“This can’t be good.”
Perhaps Jan. 31 will introduce The Year of the Sucker.
When is the major default in the United States scheduled for?
For almost a decade, coal was the other black gold. Then prices crashed, taking with them the fortunes of over-leveraged coal companies. It’s astonishing that a bond mutual fund was this exposed to a single sector/company. If the current regime wants to stay in power, it had better get regulators working on this right away.
The Fed will simply convert China into a “bank holding company”, and give them a bailout with TARP and Stimulus funds, or buy their bonds every month.
A billion dollar default? The Fed could swoop in and absorb that in a heart beat.
However, a poor country like China can grow out of debt problems. Japan's debt became a problem in the early 90's because it had caught up with the US in terms of per capita GDP. Further growth would be a tough slog, since it was easier to rip off American technology and production methods than to pioneer new ones. China's nominal GDP per capita is 1/7 or 1/8 of the US number. There are decades of growth left.Observers make the logical argument that “to have a market meltdown, you have to have a market” and China does not have one. Instead, Beijing technocrats dictate outcomes.
That’s correct, but that is also why China is now heading to catastrophic failure. Because Chinese leaders have the power to prevent corrections, they do so. Because they do so, the underlying imbalances become larger. Because the underlying imbalances become larger, the inevitable corrections are severe. Downturns, which Beijing hates, are essential, allowing adjustments to be made while they are still relatively minor. The last year-on-year contraction in China’s gross domestic product, according to the official National Bureau of Statistics, occurred in 1976, the year Mao Zedong died.
Why will China’s next correction be historic in its severity? Because Chinese leaders will prevent adjustments until they no longer have the ability to do so. When they no longer have that ability, their system will simply fail. Then, there will be nothing they can do to prevent the freefall.
Revelation? I bought my place where I now live two weeks before Obama was elected in 2008 in the spirit of Revelation 18:4.
I am more sure it was the right thing to do with every passing month. This thing is as clear as seeing the edge of a hurricanes storm front just out to sea and approaching shore. Those that have not prepared are going to be in a world of hurt. Even those of us who have prepared are by no means out of the woods (if I may mix metaphors).
It has started.