We are all in the same boat?… “If/when China implodes, they will take the entire global financial system with them.”
By Bill Holter
GoldSeek.com
Wednesday, 2 March 2016
No doubt the financial and economic stresses are building. Without even looking at the various and very weak economic reports, talk of and implementation of “negative interest rates” should tell you all you need to know. We looked at this last G-20 meeting as a possible venue for some type of concerted action or even the announcement of some sort of re set or major change. Instead, they “publicly” agreed on nothing.
Earlier today, Zerohedge put out an article regarding China’s shadow banking system and the gross leverage involved. It has also been reported of China’s real estate market, true bubble conditions exist. “Flippers” are lining up for days or even weeks to queue up and hilariously a 65 square foot “closet” just sold for $585,000! The latest news is a layoff of about 6 million workers, does this maybe sound like a burst to the bubble?
Without getting into the “micro” of the shadow banking numbers and the massive/exponential build ups they are experiencing, let’s look from a macro perspective. $15 trillion is nearly the size of the purported U.S. GDP. It also represents about 10% of China’s GDP …yet only the “shadow” banking side of it and not including official banking. No doubt China is a debt bubble on the verge of or already bursting. The recklessness with credit will probably be looked back upon as insanity …but I am here to tell you it is not!
First and foremost, China looks VERY long term down the road in generations rather than years or quarters. I have said before I believed China was building ghost cities via credit use because they do not care about a financial collapse as they will be left with real and new infrastructure. I still believe this and now even more so. It is my opinion China made a decision a few years back (maybe as far as 2009) that the West, led by the U.S. had an untenable financial system and the over use of debt would not only be a burst bubble but would lead to systemic change. In other words, China joined the party even though knowing it would end very badly!
The Rest…HERE
