Posted on 09/30/2011 4:18:01 AM PDT by blam
A Hard Landing In China Now Seems Inevitable
Also Sprach Analyst
Sep. 30, 2011, 5:08 AM
This is not an easy call to be made, but it does strike me that there is something wrong with the Chinese economy, even though the focus these days are mostly in Europe, as the European debt crisis is moving ever closer to a tipping point.
For China, it seemed as though a hard-landing was avoided as of 2 months ago. As it turns out, even myself was getting a little bit too optimistic. Now, the probability of a hard-landing is getting even higher than before, in my view, the only question is when, not if. Although I have not been writing very often these days about these little stories concerning failure of small and medium sized businesses, or the overhang of the local government debts problems, it does not mean that problems aren’t going away.
That is something pretty worrying, as many of these struggling business owners have been relying on the underground credit market (as I have pointed out months ago here and here), which got the funding from yield-hungry depositors withdrawing deposits from the formal banking system into these shadow banking system, and these private lenders are charging extremely high interest rates to borrowers, which are unsurprisingly unsustainable. So here comes the great escape of business owners.
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(Excerpt) Read more at businessinsider.com ...
I’ve been saying it for several years: China 2000s-2010s is the next Japan 1980s-1990s.
Gold and Silver are headed down. Fed must me worried and dumping metals on the market to treat the symptoms and not the disease.
Commence the trade war.
Bring back American jobs. Bring back American technology.
Bring back American manufacturing.
Social unrest. An attack on Taiwan.
If we don’t stop outsourcing US jobs to China, there will be social unrest in the United States.
I’m looking forward to the ecopolitical theory that states when China falls under 7% GDP, there will be food riots. In Beijing. Live on Fox. Ok I made that last part up.
Be careful what you wish for. Our economies are so intertwined now that if China crashes, many of the rest of the world’s economies (including ours!) could go with it.
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