“Which brings us to today, when we find that China’s credit formation, until now proceeding at a breakneck speed, has suddenly ground to a halt.“
“Which brings us to today, when we find that China’s credit formation, until now proceeding at a breakneck speed, has suddenly ground to a halt.“
A liquidity crunch is nothing that the Federal Reserve can’t fix….or so we’ve been told for many years. The Fed and almost all other central banks have painted themselves into a liquidity corner…they don’t dare raise rates or much of the banking system will implode. Currently, the Fed is talking about tightening, but they’re bound to reverse course at the first sign of bank distress. They cannot continue like this forever without sparking significant inflation somewhere, but when this one-trick pony drops dead I cannot predict.
The Fed has been aided by the fact that pretty much every central bank is doing the same thing as the Fed: print and print. Any guesses as to which central bank will buck the trend first?
I wonder why China dosen’t just call in thier 1.2 Trillion dollar loans to the US?
Hmmmmmm.
Simply put….if China called any of their US loans there would be a default and their investment would collapse.
By practice not principle…a pretend economy. The US pretends they can/will pay and the Chinese pretend they can/will be paid.
If’n ya own the Bank $10,000 and can’t pay yer in trouble….
Now if’n ya owe the Bank $10,000,000 and can’t pay…the Bank is in trouble,
Is this time when we watch the train wreck?
China’s rush to overtake the US (and with the US’ help, too) has caught up with it.
Isn’t that what happened to the USSR?
Past is prologue.
Let us watch.
Popping sounds, like bubbles and popcorn.