Posted on 09/19/2016 5:34:29 AM PDT by drop 50 and fire for effect
China has failed to curb excesses in its credit system and faces mounting risks of a full-blown banking crisis, according to early warning indicators released by the world’s top financial watchdog.
A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late.
The Bank for International Settlements warned in its quarterly report that China’s "credit to GDP gap" has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia's speculative boom on 1997 or in the US subprime bubble before the Lehman crisis.
(Excerpt) Read more at telegraph.co.uk ...
China is the crisis that I fear most. Their adventurism in the South China Sea is driven by a desire to distract their public from potential disasters at home. So one hand, desparation could drive them to do something stupid overseas.
On the other, if they can't manage the debt crisis, then their economy could blow up in their face. China has only been stable because the CCP has imposed it since 1949. Before then, China was plagued by a series of very costly and violent civil wars, which exceeded even the destruction of WWII. We talk about societal collapse and the "s--- hitting the fan". In China it would be a dump truckload of manure into an industrial HVAC system.
How are those new cities with no citizens working for them?
What do you think of this?
Nobody seems to care but they’re at 250 percent debt to GDP.
So is Japan.
That’s dangerous.
Our 100 percent aint so good either.
Don’t know if this is knowable information, but does/has China issued their own debt to buy ours?
If so when we default and/or renegotiate (a more palatable form of default), who really ends up holding the bag (so to speak)?
Otherwise, why so much debt for a country who’s been growing at 5-7 percent for years now?
The loans for those are a big part of the problem. Add in significant quality issues with the construction of anything there. Search “bridge collapse China” for some eye opening articles.
It is a society that is closed in many ways, something is driving them to build fast, and cut corners in quality, while borrowing to do it.
PRC being new to free trade is finding out through a series of speed bumps that there are good days and not so good days. What transpires next is like playing jazz, it isn’t the first note you play that’s important, it’s the next note.
Not to worry, the American Taxpayer has their back.
We are bad, but we have capacity that we are not using due to tax and regulatory issues. We can increase real growth, and solve debt by getting government out of the way. A fixable problem.
Have you ever followed Bill Bonner? Interesting viewpoints.
Also, I just came across a youtube meme that I’m glad I JUST came across. It is September 27, 2016.
Yeah, those types of things pop up all the time, but I always like to follow the ones that are just a week or two away. I did that with a guy that wrote a book called The Harbinger (jonathan Cahn, I believe), that turned out to be WAY off. He really did sound believable, too.
China is still a one-party state where the Communist Party has control over literally any organization that matters - certainly including banks.
Yes, their banks may be totally bankrupt, but banks in china will follow the Party line
When worldwide ignorance and complacency grow exponential and reach new heights.......the world is heading for a cataclysmic event, once again to settle things down. In layman’s terms and plain English, a war. Just about everywhere on this globe governments are re-arming and buying war material as if it is going out of style. What are they expecting or are their intentions? Certainly not just for the sake of having fun
I look at the course of human history being like plate tectonics. Forces and pressures build within the crust, and then the pressure is released in a sudden cataclysmic release along a fault line. Same with humans. Societal forces build up the pressure, until the existing system cannot contain them and the pressures are vented in violent wars.
The problem with human wars though is that the tectonic cycle has been stable for billions of years. In the human version, as technology generally advances, the technology of mass killing also improves, and the “earthquakes” are more devastating. The progression from sword to gun to rifle to machine gun resulted in mass slaughter a century ago. Seventy-five years ago a war that began with biplanes and cavalry charges ended with nuclear weapons.
Today, a war fought with computer guided killing systems may make human life above ground in a battle zone virtually impossible.
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