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Old 09-19-2016, 11:08 AM   #1
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Default Chinese Meltdown Imminent

I wanted to put this under the Lookout Tower thread because it fits in "Financial Meltdown II". But then it may not be seen.

Then I wanted to put it in the "War Room", because Soros said the Chicoms would go to war when the economy fails - as this states WILL happen. But, there is no "War Room" - YET!!!

So, I will put it here. I hope all of you economics and banking and investment Gurus will interpret the article for me (Can't even balance my electronic checkbook). It looks like China is too "Big to Fail"! But, China is going down a very dark path with no ability to go backward from the precipice it is starring at. It appears they may be several orders of magnitude deep in shit!

I shouldn't laugh - as it means war (according to Soros).

http://www.telegraph.co.uk/business/...isis-in-china/
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Old 09-19-2016, 11:40 AM   #2
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From Andy's Telegraph link:

Quote:
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.
OK, so let's say that this time China really does implode financially.

What are the implications for those of us in the "free world."

Are there any practical things we can do to shield ourselves? Lessen the impact?

I don't know if anything will come of this or not. It's all smoke and mirrors, but what if it does?
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Old 09-19-2016, 01:01 PM   #3
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Quote:
Originally Posted by A.T. Hagan View Post
From Andy's Telegraph link:



OK, so let's say that this time China really does implode financially.

What are the implications for those of us in the "free world."

Are there any practical things we can do to shield ourselves? Lessen the impact?

I don't know if anything will come of this or not. It's all smoke and mirrors, but what if it does?
Nothing like it has ever happened before. Nobody knows. And frankly, I think the greatest fear for the west is political fallout not economic. The greatest risk is China's govt becomes unstable. Which I think unlikely in the short to medium run
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Old 09-19-2016, 07:13 PM   #4
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( cannot say much now , in a rush )

The Chinese are already struggling to prevent a Yuan fall and pulling
a number of tricks to kill short sellers .

IMO it is inevitable that they will fail but I cannot say when .

Probably soon .

IMO there are now many signals that the world financial system is
rushing towards the mother of all crises .

Interestingly the USD$ may rise sharply in the short term ( <---- ATH take note ) .



..
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Old 09-19-2016, 10:16 PM   #5
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Quote:
Originally Posted by A.T. Hagan View Post
From Andy's Telegraph link:



OK, so let's say that this time China really does implode financially.

What are the implications for those of us in the "free world."

Are there any practical things we can do to shield ourselves? Lessen the impact?

I don't know if anything will come of this or not. It's all smoke and mirrors, but what if it does?
There have been some articles the last week about different lending practices used by Canadian banks for Chinese students and housewives buying houses here. Different as in different from lending practices for Canadian citizen residents. Think no way to verify income in China, so 20% down on RE (5% is minimum for citizen residents), and deposits to the banks in Canada.

A Chinese crash could REALLY plunge RE in BC, Canada. Hopefully the banks have enough set aside for that level of loan loss. Maybe some leftovers of the loan loss money put aside from the oil crash.
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Old 09-20-2016, 08:22 AM   #6
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A little off topic but interesting .



..
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Last edited by Ross; 09-20-2016 at 08:47 AM.
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Old 09-20-2016, 06:00 PM   #7
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Considerable volatility in the Yuan over night .

IMO it is inevitable that despite heroic efforts to defy gravity
the Yuan will eventually succumb to market forces .




..
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File Type: jpg 2016 09 21 Yuan volatility ss.jpg (67.2 KB, 261 views)
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Old 09-19-2016, 12:29 PM   #8
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Isn't their leader's last month in October? Who is going to replace him and how will that effect their economy?
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Old 09-19-2016, 07:17 PM   #9
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The even bigger fear is the Chinese people deciding they have had enough, and want their fair share of the pie (the part already offshored in American and English real estate, amongst other places). Once they go to their bankrupt banks, demanding their hard earned money, and finding out its not there anymore, could lead to an uprising that would make Tianemen Square look like a tea party... Chinese Red Army or not, especially if the rank and file soldiers were stolen from as well...

The whole situation bears close monitoring, as the CCP desires order above all, and will present itself as the immovable object against the people. The problem is that govts rule only with the consent of the people... If the Chinese people rise up as one against the CCP, the immovable object will be obliterated...

As for effects world wide, all you have to do is look in Wally World... Imagine not getting cheap Chinese made goods for several months to several years... The dislocations occurring will be quite severe, and we're already tottering on the edge of a recession, even by the most optimistic economists... But in the longer run, it will be better for us, once manufacturing gears back up in the USA...

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Old 09-19-2016, 08:06 PM   #10
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Quote:
once manufacturing gears back up in the USA...
Imagine paying $20 for a "Bic Lighter"
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Old 09-19-2016, 08:10 PM   #11
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I'm surprised they've been able to kick the can this far down the road. China still has all those ghost cities that have never been populated because the rents are too high. Meanwhile, manufacturing is moving on from China to cheaper frontiers like Vietnam.
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Old 09-19-2016, 08:13 PM   #12
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What would be a good "investment"
http://seekingalpha.com/article/4006...in-nine-months
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Old 09-19-2016, 08:54 PM   #13
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Perhaps you were being rhetorical, but, when you see the end is near - buy lots, and lots, and lots of high end sneakers that fit you. You will become rich beyond your dreams!
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Old 09-20-2016, 06:16 PM   #14
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Ross, I used to think that life travels slowly. Then I went to work one morning 15 years ago and watched life change very fast.

Do you think this is a glacial process or do you think this could happen over night?
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Old 09-20-2016, 06:47 PM   #15
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Andy said ..
Quote:
Do you think this is a glacial process or do you think this could happen over night?
I have no way of knowing how long they can last . However I think
they have to do it in one big hit ( if they have any sense ) otherwise
there will be continued capital flight and pressure on the Yuan .

Kyle Bass ( one of my heroes ) suggested many
months ago that they would hit the wall in August/September .

Putting aside the banking and derivative situation ( too opaque ) a Chinese
currency devaluation is likely to cause ...
# Other countries in the region to devalue competitively
# An increase in Global deflationary pressures
# Massive repercussions within China
# Given that Japan is a trade competitor with China I assume they
would also be forced to devalue . IMO the shock from a Japanese
devaluation alone is likely to be cataclysmic for multiple reasons .

Finally if most of your trade competitors devalue to what extent have you really
devalued and does that mean your currency comes under pressure again ?

The one thing global bankers both government and private fear the most
is deflation .


..
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Old 09-20-2016, 06:41 PM   #16
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If the CNY goes, it will influence the US election. Can you imagine the amount of dumping that will go on with a yuan that is 30% cheaper than it is right now? Anti-free trade politicians will have a field day with the TPP, even though China is not part of that.
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Old 09-20-2016, 08:58 PM   #17
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Just asking.....

In the "Big Picture" type of thing, would our debt to China go down, way down, or way, way down? Could we actually be at war right now? I mean a 21st century bloody conflict where the weapons are Dollars and interest payments?

Are we in the opening phases of a World War? Are we all struggling against each other in increasingly violent conflict that is becoming increasingly more deadly by the day?

A year ago, I said that ISIS and the Norks would have to go before we would have the opening salvos. Now I think events might be a Hell of a lot more subtle.

a
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Old 09-21-2016, 12:04 AM   #18
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Volatility now Looking worse .



I am not sure how much this intervention is costing the Chinese Government
but it must be big bucks .

..
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File Type: jpg 2016 09 07 2pm Yuan volatility.jpg (68.6 KB, 247 views)
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Old 09-23-2016, 10:43 AM   #19
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Open source but no MSM corroboration yet.

Source AIG Travel Alerts

China: Mass protests cause disruptions in Beijing


22 Sep 16
Tensions remain elevated in the capital Beijing as of 23 September 2016 following a large protest the previous day.

Thousands of people from different cities across China gathered in Beijing to pressure the government to resolve ongoing financial disputes regarding the default of a fund raising project involving millions of U.S. dollars.

The demonstrators caused disruptions to transportation in multiple locations near government establishments across Beijing.

Additional rallies and associated disruptions should be expected in such cities as Beijing, Shanghai and Kunming, as the issue is unlikely to be settled in the near or medium term.
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Old 09-23-2016, 11:44 AM   #20
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If I did not have to prepare for my Conference Monday - I would be researching the Chinese anti-government sites.
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Old 09-26-2016, 07:28 AM   #21
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The pattern of volatility seems to be changing . Longer periods of
lower value Yuan vs gold ( and USD$ ) .
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File Type: jpg 2016 09 26 Chinese Yuan 24 hr v1.jpg (51.6 KB, 98 views)
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Old 09-26-2016, 01:14 PM   #22
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China's shrinking economy poses the 'biggest threat' to the global economy, former chief IMF economist warns

Economist claims China's economy slowing more than official data shows
'Credit fuelled growth' poses a risk to global economy, Rogaff warns
Growth in China slowed to 25-year low last year, figures reveal


http://www.thisismoney.co.uk/money/m...ist-warns.html


Concerned: Former IMF economist Ken Rogoff
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Old 10-07-2016, 10:44 AM   #23
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Quote:
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China's shrinking economy poses the 'biggest threat' to the global economy, former chief IMF economist warns

Africa is where it is at for agro product and in a few years for manufactured goods.

Even China knows this.

They just finished the train route from Djibouti to Addis Ababa.

One freight and one passenger train a day. Tracks to be extended to many of the countries in central Africa.

Agricultural goods from Africa to the Red Sea then to China. Manufactured goods from China to Africa but they are working on manufacturing locations in Addis Ababa.

It is part of their Belt and Road project.

Why? They need cheaper agricultural goods and eventually cheaper manufacturing labor costs Africa can provide.

http://news.xinhuanet.com/english/20..._135736710.htm

http://allafrica.com/stories/201610070797.html
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Old 10-07-2016, 03:39 PM   #24
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Given all the work and effort China has put into Africa I suspect they expect to make big profits,

Just a thought... current Chinese population is some 1.3 billion. With global population doubling roughly every 40 years, I guess Chinese population in 2056 to EXCEED TOTAL WORLD POPULATION OF 1940 which was about 2 billion.
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Old 10-07-2016, 04:33 PM   #25
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Given all the work and effort China has put into Africa I suspect they expect to make big profits,

Just a thought... current Chinese population is some 1.3 billion. With global population doubling roughly every 40 years, I guess Chinese population in 2056 to EXCEED TOTAL WORLD POPULATION OF 1940 which was about 2 billion.
And people want to do away with GMO crops and agro chemicals...
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