Chapter 24 in Hunter Lewis’s new book.
China is the ultimate crony capitalist state. It is a country which is built on lies on top of more lies on top of more lies on top of more lies.
The economic tide has been going out for quite a while, but the pace has just quickened in emerging markets – big time. Things have become quite unsteady and no one knows whether the current instability will trigger something broader in the developed economies. China is slowing. Japan has horns locked with China economically and increasingly politically. Europe is catching its breath before another wave rolls through.
I am not saying this is the capitulation. Who knows? Frankly no one. But it’s time to pay attention if you have money in the market.
Meet the “fang nu” or Chinese housing slaves.
It’s not China, or Russia, or Cuba.
China has been very loose with its monetary policy historically but especially since the Crash in 2008. Its economy is also run (fundamentally) by cronycrats who think they can manipulate the economy to prosperity. (Sound familiar?)
Africa is a continent which doesn’t seem to get a break. Though almost no Americans know it “The Great African War” has raged for the past 15 years in the heart of Congo. It is estimated that 5.4 million people have died because of the war. But yet almost no one in this country knows about it.
They’re in good company. The banking cronies here fear Bitcoin too.
This could be a good thing overall for China as the “alternative sources,” trusts, what is often called the “shadow banking system,” might actually be a stabilizing and limiting force in the economy. The rates of interest on loans through the shadow banking system are much higher than what municipalities can obtain through traditional lenders, and probably more accurately reflect the real risk of loans. (Which are considerable it appears.)