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This economist thinks China is headed for a 1929-style depression
Hellenistic Shipping News ^ | 07/04/2016

Posted on 07/05/2016 7:54:53 PM PDT by TigerLikesRooster

This economist thinks China is headed for a 1929-style depression

in World Economy News 04/07/2016

Andy Xie isn’t known for tepid opinions.

The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy.

Xie, now working independently and based in Shanghai, says the coming collapse won’t be like the Asian currency crisis of 1997 or the U.S. financial meltdown of 2008.

In a recent interview with MarketWatch, Xie said China’s trajectory instead resembles the one that led to the Great Depression, when the expansion of credit, loose monetary policy and a widespread belief that asset prices would never fall contributed to rampant speculation that ended with a crippling market crash.

China in 2016 looks much the same, according to Xie, with half of the country’s debt propping up real-estate prices and heavy leverage in the stock market — indicating that conditions are ripe for a correction.

“The government is allowing speculation by providing cheap financing,” Xie told MarketWatch. China “is riding a tiger and is terrified of a crash. So it keeps pumping cash into the economy. It is difficult to see how China can avoid a crisis.”

/snip

There’s no equivalent metric in the U.S., but household debt stood at $14.3 trillion while nonfinancial debt totaled $13 trillion at the end of the first quarter, according to the Federal Reserve. The combined tally of $27.3 trillion is roughly 1.5 times the U.S. GDP.

/snip

(Excerpt) Read more at hellenicshippingnews.com ...


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: andyxie; china; depression; economy
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To: AdmSmith

China Forwarders Freight Index (CFFI) China- North America is down from 2515 to 1425 in a year !

http://en.shippingchina.com/scfi/index/detail/line_id/1/date1/2015-06-01/date2/2016-07-06.html


21 posted on 07/06/2016 2:06:06 AM PDT by AdmSmith (GCTGATATGTCTATGATTACTCAT)
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To: AdmSmith

1425 =>1424


22 posted on 07/06/2016 2:14:27 AM PDT by AdmSmith (GCTGATATGTCTATGATTACTCAT)
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To: TigerLikesRooster

If so, will the communism be pulled tighter and capitalism blamed by their dictators...and, will 0bama blame their free markets?


23 posted on 07/06/2016 2:55:03 AM PDT by CincyRichieRich (Russians, release her emails.)
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To: Jack Hammer
Given China’s huge military and the obviously bellicose and confrontational nature of its leaders, I’m not really sure a vast national depression would be a good thing....

My reaction, as well.

24 posted on 07/06/2016 4:52:16 AM PDT by Pearls Before Swine
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To: TigerLikesRooster

-—The government is allowing speculation-—

or in different words, the government is allowing gambling

why piddle with mah jong when you can piddle big time with stocks


25 posted on 07/06/2016 4:55:51 AM PDT by bert ((K.E.; N.P.; GOPc;+12, 73, ....Opabinia can teach us a lot)
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To: TigerLikesRooster

I think a few hundred targeted executions of “bloodsuckers” and “economic wreckers” will quickly stop or slow the predicted crash.


26 posted on 07/06/2016 6:04:46 AM PDT by Gritty ("Our most effective response to terror is compassion, it's unity and it's love" - A/G Loretta Lynch)
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To: AdmSmith; AnonymousConservative; Berosus; Bockscar; cardinal4; ColdOne; Convert from ECUSA; ...

thanks AdmSmith.

China’s Looming Demographic Crisis: Guns or Canes?
http://www.freerepublic.com/focus/f-news/3446530/posts?page=10#10


27 posted on 07/06/2016 6:06:46 AM PDT by SunkenCiv (I'll tell you what's wrong with society -- no one drinks from the skulls of their enemies anymore.)
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To: Gritty
You may kill them but can't kill the damage already wrought. Unfortunately, the financial market is a game of expectation. When people finally realize that the reality is far short of their expectation, values evaporate: stock price, real-estate price, to name a couple.
28 posted on 07/06/2016 6:13:07 AM PDT by TigerLikesRooster (alt.current-events.clinton.whitewater)
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To: TigerLikesRooster
when the expansion of credit, loose monetary policy and a widespread belief that asset prices would never fall contributed to rampant speculation that ended with a crippling market crash.

Wait I am confused. The economic Free Trader geniuses on Free Republic and their kindred folks on Fox Business News keep telling us Smoot-Hawley tariffs caused the great Depression. /sarc

29 posted on 07/06/2016 6:15:44 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: kabar

Your balless globalist chicken little carping is duly noted.


30 posted on 07/06/2016 6:19:40 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: central_va

Your ignorance of the global economy is duly noted.


31 posted on 07/06/2016 8:09:34 AM PDT by kabar
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To: AdmSmith; AnonymousConservative; Berosus; Bockscar; cardinal4; ColdOne; Convert from ECUSA; ...

The US and Japan — remember Japan? — had a similar dance going on from approximately the OPEC embargo (when US made cars were too large basically overnight; as Red Forman said, “the last time I was that close to a Japanese machine, it was shootin’ at me.”) until the late 1990s. They thought, great, we’ll get rich with this huge export surplus. Instead, they wound up having a nice big crash and have spent the years since struggling.

Like China now, the Japanese couldn’t afford to sell their own products into the home market, so they expanded into most of the countries of the Far East, building plants to sell in areas with lower labor costs. Eventually, it made no sense to sell more expensive Japanese-made goods to the US market, and, well...

The Chinese have spent the past 15-20 years trying to find some place in the world with an even lower labor cost than theirs, in order to sell into the Chinese market. They’ve tried in Latin America and Africa. My guess is, they’ll use 3-D printing and other automation to accomplish this, which will work out well for them as their labor force vanishes as a long-term consequence to their draconian one-child laws.


32 posted on 07/06/2016 9:20:55 AM PDT by SunkenCiv (I'll tell you what's wrong with society -- no one drinks from the skulls of their enemies anymore.)
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To: Pearls Before Swine

Count me in on the “not a happy thought” crowd. Sure Russia was dangerous but they almost always backed down if you refused to be scared by their shoe-pounding rhetoric and didn’t cut your military forces to Carter levels. They were overextended keeping a hundred satellite states/areas enslaved plus their manufacturing capacity sucked eggs and they knew it. The only thing the Soviets were every really good at was bullying.

On the other end of the scale we have China. The only enslaved areas they have to worry about are Tibet and a couple islands, they’ve proven far more capable to reproduce stolen Western technology, they have all the manufacturing that the West USED to have, and they’re facing a demographic crisis with millions of angry men. Not a good combination.


33 posted on 07/07/2016 11:37:54 AM PDT by Laser_Ray (Another nifty idea)
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To: kabar; jobim; TigerLikesRooster; SunkenCiv
China’s foreign exchange reserves rose $13.4bn in June to $3.21-trillion, recovering from a five-year low in May, central bank data showed on Thursday. June’s increase was the biggest in 14 months.

Economists polled by Reuters had predicted reserves would fall $20bn to $3.17-trillion, reckoning on sharp drops in the value of China’s sterling and euro holdings following Britain’s shock vote in June to leave the EU.

Data from Chinese banks also does not appear in the official foreign exchange reserve data.

http://www.bdlive.co.za/world/asia/2016/07/08/surprise-rebound-in-chinas-forex-reserves—but-more-outflows-loom

Cooking the books by delaying foreign payments, next month will be worse.

34 posted on 07/08/2016 5:06:50 AM PDT by AdmSmith (GCTGATATGTCTATGATTACTCAT)
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