An easier to understand recessionary metric, passenger car vehicle sales, fell yet again in December, plunging 3.6% to 2.17 million units, according to the China Passenger Car Association. The injection of $Trillions in capital has seen China distribute these sums across the base of its economy creating a GDP that hit a high of 14.2 % in 2007 then averaged nearly 9% for the next decade before dropping yearly to 6.1% in 2018. I travel around a lot and I see empty real-estate everywhere. But they still need funding and Chinese banks on their own volition may be reluctant to get involved when already having troubles of their own. But we haven’t heard the last of the coronavirus… In Japan, they call it “the collapse of the ‘Chinese collapse’ theory.” The line, which harks back to more than a decade of dire predictions about China, is a joking way to describe the state of the Middle Kingdom’s economy. China is the largest foreign lender not … The three bank failures were only the tip of a huge iceberg. The amount of debt in China is massive and the amount is unknown. China economically continues to play the financial role of Kenneth Lay to its American mentor’s Bernie Madoff. Many of the perennial China bears are retreating into hibernation. Cheers!! This solution has been touted as uniquely beneficial to these banks since, instead of offering higher rates which only accelerate the bank’s insolvency due to requiring higher payouts on deposits, the bank is instead making a one-time payment, and the unusual incentive is enough to garner substantial new deposits.   China pegs the yuan to the dollar. With the metrics of China’s banking system already pause for considerable concern to the tune of $20 Trillion, this huge obligation is as much a mirage as the economy since it fails to add to the account the very large and un-tabulated Shadow Banking loans which would add $Trillions in debt to China’s already highly leveraged systemic banking risk. As noted in a recent article by University of Helsinki economics professor Tuomas Malinen,  China has stimulated its economy aggressively in Q1 and Q3 2019 but interestingly has not continued its past emphasis on infrastructure investments as in 2015/2016. It’s been called a mountain, a horror movie, a bomb and a treadmill to hell. These figures do not include the off-the-books “Shadow Banking loans that some estimates predict would triple that debt percentage to much closer to $16 Trillion. If you wish to use copyrighted material for purposes other than ‘fair use’ you must request permission from the copyright owner. China is mired in a massive amount of debt. Andrew Collier, managing director at Orient Capital Research, says, “The banks [may] remain leery of these projects because they doubt they will be profitable and they will be stuck with bad loan. Worse, exports to the United States were down 23% from the prior year. on their loans and without the many funding options available to China’s much larger banks, these increasingly high-interest rates that China’s smaller banks have to offer in order to attract new cash deposits could further lead to their insolvency. And this is why we have gold and silver – to protect us from the economic collapse coming. We discuss the massive amount of public debt accumulating in the world, and how this has never been seen or dealt with before. The IMF issued a warning for China in June urging the government to counteract the country’s high levels of corporate debt. Risks of large-scale corporate defaults are mounting in China. First, it was Baoshang Bank , then it was Bank of Jinzhou, Now it is Heng Feng Bank. China corporate debt defaults trigger concerns of broader crisis. We are making such material available to our readers under the provisions of ‘fair use’ in an effort to advance a better understanding of political, economic and social issues. While America heaves under this burden of debt, there is another historical measure at play: a rising debt-to-GDP ratio. This effectively means that China is fiscally unable to underwrite massive infrastructure projects and so any new world-economy-saving stimulus from China, as in 2015/2016, will be practically impossible. All these adjustments by China and the PBoC do little to control or pay-off increasing debt and are designed to maintain the Chinese miracle of TVA style infrastructural improvements that has been the employment engine of its economic growth. News this week indicates it will start in China with defaults by several of their State Owned Enterprises (SOEs). This is the third bank failure in China … With China being the world leader in pork consumption these bank’s desperations have created some interesting incentives to attract depositors. Incredibly, banks don’t hold these loans on their balance sheets or set aside capital against their potential defaults. The US is setup for a massive debt collapse, but it will not start here. Home Daily The World Debt Collapse Just Started in China. KONFRONTASI - When will the Economic Collapse of China happen? Worldwide, many countries already burn in political turmoil of their own debt-ridden making as their own  primal forces of nature squeeze their populations with the resultant new mantra of ever increasing austerity while the IMF and World Bank waits in the wings, salivating to gobble-up the carcass. One can see empty retail space, empty residential apartments, empty resorts, empty factories, empty stadiums, empty horse racetracks, empty government buildings, empty towns and villages, empty storage facilities etc. (Special thanks to Tracy Turner for providing additional research for this article. This is the third bank failure in China in only three months! These risky, undisclosed loans entered China’s financial system in 2009 throwing open the doors to debt for a Chinese population hungry for investment in order to pay for all those Chinese and internationally made western goods. But in the last few months China has shown, like so many other so-called first world economies, that it too is now all-in at the casino and using only borrowed money in a desperate effort to stay at the table…or starve. This number is sure to continue to shrink and can be considered a key indicator of Chinese frustration at retaining needed annual GDP growth since the result of this one move lowered the costs of the roughly 152 trillion yuan ($21.7 trillion) in yuan-denominated outstanding loans held by financial institutions (that are actually on the books) in a further hopeful attempt to again boost economic growth. The International Monetary Fund (IMF), which provides- despite its predatory legacy- some excellent yearly analysis of worldwide economic developments has warned China’s problems could lead to “financial distress” in the world’s second-biggest economy. China's economy would suffer along with everyone else's. Using a variety of demographic, economic, financial, social, and political indicators, the book demonstrates that the global system has indeed become an “architecture of collapse” subject to a variety of shocks. But China is printing and building infrastructure that is not going to disappear when the inevitable debt collapse occurs. The metrics of any collective bail-out indicates that  China has upwards of an insurmountable $20 trillion problem rapidly approaching. Debunking the Jeff Christian Interview with Kitco, Massive Shorts on 10 Year Treasury Taking Out the Repo Market, Inflation Fears Rise as Bond Yields Surge. Said Victor Shih, an associate professor of political economy at the University of California in San Diego; “Because it [infrastructure investment] already is a large contributor to growth, the slowing investment will substantially reduce growth rates. Plus, get exclusive access to Robert’s Golden Quarterly covering the economy, mining stocks, and precious metals market research that will keep you right where you need to be. First, it was Baoshang Bank , then it was Bank of Jinzhou, Now it is Heng Feng Bank. Subscribe!function(m,a,i,l,s,t,e,r){m[s]=m[s]||(function(){t=a.createElement(i);r=a.getElementsByTagName(i)[0];t.async=1;t.src=l;r.parentNode.insertBefore(t,r);return !0}())}(window,document,'script','https://goldsilverpros.com/wp-content/plugins/mailster/assets/js/button.min.js','MailsterSubscribe'); What’s the #1 most important thing for you to focus on now?Educate your self on the basics and apply proven techniques to increase your investment success. China's debt has been a key factor to its economic success in riding out the GFC, due to a large government stimulus injected into its economy. This marks the 18th drop in the past 19 months for the country. Save my name, email, and website in this browser for the next time I comment. In order to survive the hard times ahead But as the world economy slows while the metrics show a recession looming China’s economy is already cooling rapidly. “I still think that if growth falls below a certain level, the top leadership will order a stimulus, which involves acceleration in debt growth,” said Victor Shih. One reason WMPs offer higher rates is that they are based on much riskier bank loans, much like the precursor to the late ’80s, early ’90’s American savings and loan meltdown. Perhaps more worrisome, China is now an important creditor, which adds a geopolitical dimension to the concerns over debt. Well, it's already started. The Communist Party has set ambitious targets for itself. Making matter worse, a study conducted by the Center for Global Development estimates that the initiative could increase debt sustainability-related banking problems in eight countries also involved in the BRI. Corporate debt in China stood at 155 per cent of gross domestic product at the end of first quarter of 2019, much higher than other major economies. I have noticed a big decrease in the number of shoppers. This has forced many banks to rely almost entirely on new deposits to fund themselves, forcing them to hike their deposit rates to keep their funding levels stable. With less income from returns. Far from falling in debt-laden heap, the … With America leading the way across the globe with rate cuts aplenty and China still having a base rate of far higher than the US rate of < 1.5%, it was only a matter of time for China to also drop rates. China’s method of stimulus is of course distinguished from today’s American model that merely shovels the injection of its own manufactured $Trillions by using multiple fiscal tricks to by-pass the citizenry and instead shovel the cash straight into the wallets of the already super-wealthy. Which country becomes the first to trigger the almost certainly pending domino effect of global economic collapse, is merely a rhetorical question at this point. Other rural commercial banks in northern China’s Hebei province and western China’s Guizhou province have also launched similar pork rewards programs. The two largest are China and Japan. Watching Rome Burn grants permission to cross-post original Watching Rome Bum articles on community internet sites as long as the text & title are not modified. Great success with this site! This trend could dampen economic growth or trigger a new banking crisis – or both, as debt problems of companies could easily become systemic debt problems of the whole economy. When the time comes to pay the piper, that debt will be paid, no matter…but the Piper will take, in lieu of payment, pork, flesh, blood, or… dreams! At the end of 2018, the budget deficit of the Chinese government was close to five per cent. This dollar collapse would disrupt international markets even more than the 2008 financial crisis. And they're getting bigger in size! Debt warnings. Instead, they typically extend this debt via intermediaries called trust companies—firms that are not allowed to accept deposits or formally loan out money but are allowed to manage it. Sales fell 7.5% in 2019 and 6% in 2018. The new tariffs proposal by U.S president Donald Trump has intensified the trade wars between the two nation, but the chances of China cutting its trade surplus … Subscribe now, and get a 1on1 call with Robert to discuss your goals and strategies. I’m glad he found watchingromeburn.uk website, I really like Canada GDP collapse shows how PM Trudeau’s debt binge went awry Canada's economy shrank 5.4% last year, the sharpest annual decline in the post-World War II era and the third straight year in which it underperformed the US economy. China is just one more working example of the failure of the many globalist economies worldwide that are already similarly suffering in the grip of massive unsustainable- if not orchestrated- debt. Today we provide a list of 11 Reasons China’s economy is on the brink of collapse. China is becoming increasingly unable to continue to pay into the base of the world’s largest pyramid scheme of an economy and the cracks in the bubble are showing. we found 2 very good books, you can download them here: https://bit.ly/2RlAHdb and here: https://bit.ly/3e3Bg59 'I'm an alien': Musk says in response to question from Cred founder Kunal Shah The US is setup for a massive debt collapse, but it will not start here. The failure of just three banks was important enough that Chinese regulators submitted Chinese banks to a stress test and the results were shocking. An expert on China, Peter Zeihan, says that China’s collapse on the world stage will come within the next three years. This compares how much a country owes to how much it produces. The IMF estimates China's overall debt figure to be about 234 percent of gross domestic product (GDP) and predicts it to rise to 300 percent by 2022. The World Debt Collapse Just Started in China Video by GoldSilverPros We discuss the massive amount of public debt accumulating in the world, and how this has never been seen or dealt with before. US deficits rise sharply; China's births collapse; China's debt rises again; Japanese machine tool orders swell; Aussie business confidence up; UST 10yr at 1.15%; oil up and gold unchanged; NZ$1 = 72.3 USc; TWI-5 = 73.8 . 1. Meanwhile, local Chinese manufacturers’ numbers are also down. And they're getting bigger in size! I can’t easily understand what is actually happening here now. Corporate debt in China stood at 155 per cent of gross domestic product at the end of first quarter of 2019, much higher than other major economies. Bank Collapse In China! This is not what the leadership wants.”. Shih’s assertion seemed confirmed when last year, President Xi said Chinese banks would lend 380 billion yuan ($55.09 billion) to support Belt and Road cooperation, and Beijing would also inject 100 billion yuan into a Silk Road Fund. A dozen of these countries now owe debt of at least 20% of their nominal GDP to China. In response to the PBoC reports, Chinese Finance Minister Xiao Jie echoed that the situation “was under control.”. PBoC cuts in its key lending rates in August ’19 designed to stimulate a slowing economy have only exacerbated net interest margin pressures on these banks. And now that immense pile of debt dung is exploding, and it just can’t be easily remedied by yet another stimulus package from Beijing. www.watchingromeburn.com contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. Alas, when it comes to unsustainable national endemic debt one primal truth is now being heard clearly in China, as in other Central bank boardrooms across the globe, and the empty dinner plates of their public…. The market bounced back today after Friday’s 600-point plunge in the Dow. I’m glad you enjoyed the article. Since these sanctioned shadow loans advertise a return of as much as 8% or more, normal banking customers have been throwing their miraculously large paychecks into these funds by the billions. $40 Trillion Dollar Debt Heading To Economic Collapse & China’s Yuan CRASH When will the Economic Collapse of China happen? US deficits rise sharply; China's births collapse; China's debt rises again; Japanese machine tool orders swell; Aussie business confidence up; UST 10yr at 1.15%; oil … China’s central bank admitted that China’s banking sector is “showing signs of strain.” The stress tests had revealed that over 13% of China’s 4,379 lenders were designated “high risk” by the central bank’s report. And they’re getting bigger in size! “And as the central government and banking system keeps producing new loans to absorb the debt, it leads to the continuous debt buildup,” Maximilian Kärnfelt, an analyst with the Berlin-based Mercator Institute for China Studies, told news service DW, adding that infrastructure investment still largely drives China’s economic growth since fixed investment contributed to 45 per cent of China’s GDP in 2016. The US is setup for a massive debt collapse, but it will not start here. In Japan, they call it “the collapse of the ‘Chinese collapse’ theory.” The line, which harks back to more than a decade of dire predictions about China, is a joking way to describe the state of the Middle Kingdom’s economy. The Economic Collapse Of China! As the world economic body politic runs out of any remaining gas to keep a pilot light under the rapidly cooling metrics that show their long forestalled recession is near and certain, China is also contracting. China’s boom has been powered by debt as the Communist Party began chasing superpower status with a credit card and the world knows when you buy something with a credit card, you are spending money that you don’t really have and one day you will have to return it.