BIS Warns China is Imploding

Monday, September 19, 2016
By Paul Martin
September 19, 2016

Right on cue. Send out the attack dogs on both sides of the Atlantic. The BIS (Bank for International Settlement), one of the Western banking cabals top monetary watchdogs, is announcing to the world that China’s monetary, economic and financial systems are in trouble. This, of course, on the eve of the Chinese yuan/renminbi being added to the SDR basket of currencies on October 1. How convenient. This appears to be a coordinated effort to manipulate the markets and create more questions for the financial markets over the next two weeks.

First up is the Telegraph and Ambrose Evans-Pritchard and right out the gate we find “full-blown banking crisis“. Nothing says “stay away” like full-blown banking crisis in the FIRST SENTENCE of an article.

Later in the piece he discusses how China’s debt climbed by 107% over eight years. How much debt has the U.S. added to the books since Obama has occupied the White House? You say $1+ trillion a year, every year? hmmmm When Obama first entered the White House the U.S. debt, not counting unfunded liabilities like Social Security and Medicaid, was approximately $10.6 trillion, today it stands close to $20 trillion. Meaning, that in fewer than eight years Obama has created the same disaster as China – almost to the dollar. Did I miss something or is this just how our world currently operates at this particular juncture in history? Blame who ever you wish, the whole system has to change and is going to change wether anyone likes it or not. The top two economies in the world running these types of debts can not be sustained. People, the world over, are beginning to understand what is happening and how these criminal enterprises, formerly called “governments”, are not only stealing todays wealth but tomorrows wealth as well.

China facing full-blown banking crisis, world’s top financial watchdog warns
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.

Studies of earlier banking crises around the world over the last sixty years suggest that any score above ten requires careful monitoring. The credit to GDP gap measures deviations from normal patterns within any one country and therefore strips out cultural differences.

It is based on work the US economist Hyman Minsky and has proved to be the best single gauge of banking risk, although the final denouement can often take longer than assumed. Indicators for what would happen to debt service costs if interest rates rose 250 basis points are also well over the safety line.

The Rest…HERE

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